Bond market not convinced by M&A boom

September 29, 2009

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.

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