Bond market not convinced by M&A boom
Investment bankers shouldn’t pin their hopes on a surge in mergers and acquisitions activity. That’s the message from the bond market in a recent survey by Bank of America Merrill Lynch.
Acquisitions can hurt bondholders because companies often take on debt when buying rivals, lowering their credit quality.
However, a recent survey by credit analysts at BofA shows bondholders aren’t too fussed. When asked how they were positioning their portfolios to deal with upcoming M&A, nearly 70 percent of respondents said they were doing nothing, and that M&A concerns were overdone for now.