U.S. high-yield debt investors, after snapping up a record $600 billion in new loans and bonds this year, are starting to push back.
Thomson Learning, the textbook and educational testing unit of Thomson Corp., this week cut its bond offering to $1.6 billion from $2.14 billion, removed the riskiest portion of the deal and agreed to pay more interest on its planned loan, according to KDP Investment Advisors Inc. US Foodservice, a unit of Dutch supermarket company Royal Ahold NV, also raised the interest on its planned loan to attract lenders, Standard & Poor's LCD said.
The concessions made by Thomson and US Foodservice may herald higher costs for U.S. companies seeking to finance a record amount of leveraged buyouts this year, investors said. Companies and their private-equity buyers are preparing to seek additional $300 billion in funding for takeovers including those of credit-card payment processor First Data Corp. and power producer TXU Corp., Bear Stearns Cos. said in a report this week.
