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Junk Bond Fees Hammered By Competition From Commercial Banks

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These are not exactly tough times for folks in the high yield bond business. Total bond sales are near record levels, as a surge in leveraged buy-outs push the demand for debt ever higher. But fees are declining, down all the way to about 1.5%, according to Bloomberg. This means more work for bankers arranging the bond deals but smaller fees for each deal. You can just imagine how this dynamic feeds into an even more aggressive market for high yield debt—the smaller the fees, the more deals you have to do, and to do more deals requires being even more aggressive on terms and pricing.

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