‘Restricted lists’ on private-equity backed loans irk investors

Privately owned companies are limiting who can buy their debt, hampering liquidity

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Investors are finding it hard to sell the loans issued by some distressed companies because their private equity sponsors restrict who investors can trade with in the secondary market.

Some loans contain so-called ‘restricted lists’ – an approved set of investors who can or cannot buy the loan. Investors have grown increasingly agitated about the use of restricted lists.

“That is something that should not happen,” said Nuno Caetano, director at Invesco. “Loans should be freely traded and

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