Lev fin interview question
Received this question in a leveraged finance interview - why would chemicals companies typically opt for bonds instead of TLBs/ loans?
The interviewer indicated that this might have something to do with the docs. Had no idea what to say for this, can anyone help?
Just an intern thought, maybe chemical industries are considered cyclical, so companies would prefer bond, which allows the company to lock in a fixed cost of debt, as opposed to floating rate loan. Therefore, the company can reduce its exposure to economic cycles and have better visibility for long term plannings
As a LevFin intern, I concur
but they can fix their rate exposure synthetically with a swap?
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