How the European market has evolved

Author: | Published: 23 Nov 2010

When senior secured bonds came over to Europe from the US in the late 1990s they were structurally subordinated.

During the subsequent restructuring phase bondholders’ recovery levels were far lower in Europe than in the US. To compensate they were given credit support and upstream guarantees, so if there was a problem they would at least be pari passu with trade creditors.

Banks still...