Bond Turmoil in Corporate Debt Market

Corporations with debt financing needs are delaying bond offerings in the hopes that the Chinese stock market and Greece will stabilize. But if they wait too long, the Federal Reserve might increase interest rates and make their issuance more expensive. This is the latest from Bloomberg in an article about the M&A debt needs piling up as a result of financial uncertainty.

Bond issues, which had been on a historic pace for the year, fell 40% in June. In light of all the corporate takeovers and the impending interest rate increase, Bank of America analysts have predicted July and August will be the busiest months for corporate securities sales ever.

Charter Communications has taken the plunge today. It apparently doesn’t think the market is going to get any better as it announced a benchmark bond offering of between $12 and $15 billion priced later today. Bloomberg thinks it might “be the biggest junk-bond sale of the year.” The bond will help fund its acquisition of Time Warner Cable for $56 billion.

Why do we keep talking about bonds? Because this could very well be the next major area of corporate misconduct. If the bond market collapses, there will definitely be a need for whistleblowers to point out corporate misconduct related to accounting and market manipulation issues.

Meanwhile, the New York Stock Exchange took a historic pause in trading yesterday as the exchange reportedly had difficulties with implementation of a new software update and had to cancel all open orders by hand. This caused floor trading to shut down for a few hours before re-opening in the final hour of trading. While it’s incredibly news worthy, it will be interesting to see if the SEC will actually pursue an enforcement action because of the problem. Chair Mary Jo White issued a statement yesterday that the SEC was monitoring the situation and in contact with the NYSE.

If you have evidence of corporate wrongdoing in the bond market, contact one of our SEC whistleblower attorneys to learn about the rewards for bond whistleblowers. An attorney can be reached by our contact form or calling 1-800-590-4116.

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