WITH FIXED-INCOME investors frantic for every basis point of yield, who has time to read the fine print? No one, junk-bond issuers and their lawyers increasingly conclude. Paperwork for investment-grade bonds is minimal, reflecting the market's trust in the borrower. But high-yield covenants have typically comewith restrictions toensure issuerskeepenoughcashonhandto repay, as well as limittheir access tootherdebt.
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