A leveraged company employs a significant amount of debt in its capital structure through any combination of:

  • Borrowing money from banks and other lendersBorrowing from banks and other lenders
  • Issuing fixed-income convertible or preferred equity securities

Many of these companies lack the operating history or balance-sheet strength to merit an investment-grade bond rating from the major rating agencies.

Leveraged Companies

Why would a company become leveraged? »