Barbarians at the Gate question...

Recently finished reading Barbarians at the Gate and wondered why the debt issued to complete the LBO needed to be / was considered junk?

Forstmann Little is described to have been highly opposed to using it, and I don’t understand why you couldn’t issue non-junk debt given the characteristics (size & cash flows) of RJR Nabisco.

(Completely unfamiliar with LBOs before reading the book)

Cheers!

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