Improvements to legal systems and bankruptcy procedures would help, by providing more incentives for private and corporate borrowers to repay their debts.
The interest rates are attractive, usually set at 1% or 2% above the prime rate, which is the rate the best corporate borrowers can expect.
Thanks to Dodd-Frank, banks are passing regulatory fees along to corporate borrowers, and the SEC is going to "define" what "venture capital" is.
Easy credit could put corporate borrowers at greater risk of default, but even now, distressed debt investors are recouping far more than they have in previous years.
In April, as the government struggled to keep the commercial banking sector afloat, it forced the merchant banks to give a repayment holiday to troubled corporate borrowers.
"The funding difficulties reported even by blue-chip corporations underscore the extreme conditions facing corporate borrowers, and connote trouble for firms most in need of capital, " Vazza says.
Indeed, some contrarians believe that today's corporate-bond spreads say more about the shaky health of the financial markets than they do about the condition of corporate borrowers.
Average loan interest rates for consumers in Brazil in April were a stellar 46.8% per year, with the average loan rate overall, including for corporate borrowers, reaching 39.8%.
The consequence of this approach is that when interest margins rise for corporate borrowers, as they did in late 2008, the gross value-added of the banking sector appears to go up.
ECONOMIST: The banks' contribution to the economy has been overstated
"It has been an opportune time for corporate borrowers from Eastern Europe to tap the international bond markets, with many Russian, Kazakh and Ukrainian names taking advantage of the stretch for yield to borrow in dollars for the first time since the global crisis, " says Richard Segal, emerging-market strategist at Jefferies International.
Corporate bank borrowers such as Credit Agricole, BNP Paribas and Societe Generale were given more time, after a lifeline was thrown to them by the European Central Bank when it flushed liquidity into the system on Dec. 21.
That caution, in turn, has led to better corporate governance among borrowers.
Since Asia's economic collapse in 1997-98, the corporate-crony borrowers have become history.
Mortgages are bumping along at or near multi-decade lows and a flood of Treasury bond buyers has led to a very appealing yield curve for corporate and government borrowers.
Kookmin Bank in South Korea tries to encourage such efforts by charging a lower rate of interest for borrowers that meet certain corporate-governance criteria, such as having independent board directors.
That expands the list of eligible collateral which banks can post from securitized debt (those asset-backed bonds accepted since Dec. 2007 on top of government gilts), just so long as the loans are residential or commercial real-estate mortgages, consumer loans (but not including credit cards), or corporate loans to non-bank borrowers.
Some bondholders believe China won't let any borrower in the corporate-bond market default, even borrowers that aren't government-owned, because officials want to ensure the market continues to operate smoothly.
While issuance data shows borrowers placing far fewer long-dated corporate bonds (due in 10 years or more) in the first quarter than in recent quarters as absolute borrowing costs trend higher, the refinancing of short-term debt balances remains a common driver of debt issuance this year.
FORBES: Economy: Short-term Business Borrowing Hits Highest Level Since 2001
Since the cut, according to Martin Fridson of Merrill Lynch, the corporate-bond market has reopened for better-quality borrowers, though it is not yet clear whether money is available for those who most need it.
Investors might get a bit of extra oomph from their investment were their borrowers to get upgraded, but the downside for buyers of corporate debt is generally much greater than the upside, compared with equities: you get the money back plus a bit of interest if you're lucky, and if you're unlucky you don't.
He wants to extend the public shaming of corporate crooks to people who take actions that are legal, but damaging to society, such as borrowers who walk away from mortgages merely because their value exceeds the value of the underlying property.
The corporate-bond market has become less active partly because of the government's massive extension of credit to troubled borrowers.
应用推荐