Deleverage stance should tighten corporate spreads

Corporate bond spreads are expected to tighten over 2003 as companies deleverage their balance sheet...

Corporate bond spreads are expected to tighten over 2003 as companies deleverage their balance sheets, courting credit upgrades and focusing more on the needs of creditors. That is the view of Foreign & Colonial head of credit strategy Philip Hunt who believes the trend towards increasing leverage is coming to an end in some of the corporate sector. He says: 'Throughout the late 1990s, there was a huge focus on increasing shareholder returns by leveraging up balance sheets. If it wasn't done via acquisition, it was done simply by a process of equity buyback, raising debt to redeem equit...