Silver Point, Pimco Cook Up Credit Trade That Has Rivals Fuming

It’s the latest creditor-on-creditor clash in the hyper-competitive world of distressed debt investing -- helping cash-strapped borrowers to call the shots even as the cheap-money era ends.

Last week, struggling aerospace supplier Incora secured a financial lifeline from a group of investors including Silver Point Capital and Pacific Investment Management Co. that pushed rival creditors down the repayment line, aided by unusually aggressive moves from its private-equity sponsor Platinum Equity.

The transaction -- known as priming -- is eliciting uproar from the creditors left behind. It’s also sparking fresh fears in the industry that investors are ramping up a ...