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Companies with junk bond ratings are flooding the markets with new issuance.
"I'm getting ready for increased new issuance over the next 12 months".
America's main debt-guarantee scheme will close to new issuance next month (with those guarantees already issued expiring in 2012).
And deal makers are confident that the markets can absorb a surge of new issuance of corporate debt.
But the new borrowing will not add all that much to the new issuance of longer-term notes and bonds.
Mr. Egan speculated that the government might guarantee a new issuance of company debt or preferred stock.
Net new issuance, after redemptions, could be almost zero, the bank's analysts said in a recent report.
"Companies are willing to pay the price, and the market is willing to take on new issuance".
This built-in financing may well facilitate transactions in an otherwise-challenging new issuance leveraged debt market.
In theory, a default should cause the price of Treasuries to plunge and interest rates on new issuance (if and when it resumes) to soar.
"Sooner or later, all this new issuance is going to catch up to the markets," Professor Altman told DealBook before his presentation.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com