Given the greater liquidity in the high yield market, some arrangers are a lot more comfortable underwriting senior secured bridge loans to high yield and then flexing and structuring the capitalstructure based on market demand.
Encourage instead the issuance of securities that automatically adjust capitalstructure when financial distress becomes relevant, such as cocobonds with a market trigger.
Distressed debt investors will have to adapt to a surging equity market and a bubble in high-yield loan markets, finding themselves pushed down the capitalstructure in search for yield.