Bankers Go Behind Closed Doors to Sell Junk Debt in Big Shake-Up

Struggling to launch high-yield deals as recession fears swirl, investment bankers in Europe are conducting more business behind closed doors in order to sell big chunks of corporate debt in a market that’s increasingly closed.

With borrowing costs soaring, underwriters on recent deals have tapped deep-pocketed fund managers early on in the marketing process -- before opening up new issues to the wider investing public. The tactic has powered borrowers that needed to finance acquisitions this year, including 888 Holdings, Manuchar NV and Miller Homes Ltd.

The pre-marketing drive -- in which investors get ‘wall-crossed,’ meaning they are ...