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?
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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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