European bondholders suffer weak covenants

European investment-grade bonds have weaker covenants than their North American counterparts, a Moody’s study has shown. The study, Moody’s first investigation into covenant strengths, also shows the opposite is true for high-yield bonds: European high-yield bond indentures are tighter than North American versions.

The transatlantic divide manifests itself in wide-ranging and idiosyncratic ways, says Moody’s. Investment-grade bonds issued in the US and Canada typically include covenant protectio

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