Covenants the Issue In Toys Default Claim

Laughlin, Kate
August 2006
Investment Dealers' Digest;8/7/2006, Vol. 72 Issue 31, p11
Trade Publication
The article provides information on how leveraged buyout (LBO) deals can create conflicts in pre-existing debt. A declaration by a group of Toys R Us bondholders claiming the company is in default illustrates well how tricky LBO deals might fall afoul of covenants included in the company's pre-existing debt. The article shows how that dispute may affect subsequent deals, such as the pending buyout of HCA.


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