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Buyout-backed bonds will 'lower credit quality'

Rising number of buyout firms issuing high-yield bonds is contributing to riskier credit profiles, according to Fitch

The growing use of high yield bonds to finance buyouts and refinance private-equity portfolio companies will end up reducing overall credit quality in Europe, ratings agency Fitch has warned.

According to Fitch's European high yield issuance and default review and outlook, the growing number of high-yield bond issues from private equity-owned companies is likely to "shift the balance of outstanding credit quality towards lower 'B' rated issuer default rating category over time."

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