Bond investors rebel against weaker deal terms

Those who traded credit in the frothy days of 2007 will recall that virtually every piece of new paper, including LBO debt, would come to market with the skimpiest of creditor protections, i.e., "covenant lite" which to many was an indication that money was literally being thrown without any discrimination in the last epic chase for yield, just as many were preparing for the imminent market backlash. Which they got shortly thereafter.

Wall Street’s bankers have made a fortune from funneling trillions of dollars of Corporate America’s bonds into investors’ portfolios, a party that continued this week with CVS Health Corp.’s US$40 billion debt sale.

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Following a period of relative quiet in the high grade bond market, today a mini quake will hit when CVS Health is set to test the health and depth of the bond market with a super-jumbo sale of $44.8 billion in IG bonds to help pay for the company's $69 billion acquisition of Aetna.

When the White House announced on Friday that Trump had signed an executive order deepening the sanctions on Venezuela, and confirming the previously rumored trading ban in Venezuelan debt that earlier in the week had sent VENZ/PDVSA bonds tumbling, we made what we thought at the time was a sarcastic comment that in light of the recent scandal involving

FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.  MOODY'S: Corporate Liquidity Is In Good Condition Despite Recent Bond Sell-offs (Barron's)

(Reuters) - J.C.