Just a few years ago, the market was as wide open as it had everbeen, allowing borrowers to raise money for anything andeverything. But times have changed. Even before this month's U.S.presidential election, companies had been selling the debt at theslowest pace since 2009, and the surprising outcome hasapparently chilled issuance even more.

Borrowers have raised just $11.4 billion so far this month, theleast for the period since 2008. While it might be easy to dismissthe development simply as a sign that borrowers have enough moneyfor the foreseeable future, under the surface it seems as if somebigger forces are at work. Investors don't seem to want to buyjunk-rated debt anymore unless they're amply compensated for therisk.

Consider, for example, a planned debt sale by Conduent, whichwas spun off from Xerox earlier this year. The new company hadabout $7 billion of revenue last year. It will provide services togovernments and industries, as opposed to selling the photocopiersand scanners that Xerox is known for.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.