There will be no haircut on senior debt, not to speak of sovereign debt, ” declared Mr Rehn.
On a global scale, the vast syndicated-loan market, including leveraged finance and more senior debt, is also growing more swiftly than public bond and share markets.
Even senior debt, holders of which rank second only to depositors in America and typically alongside them in Europe, is at 85-90 cents.
But the senior debt holders may decide that they will fare better if Chrysler files for bankruptcy and they can make a grab for whatever sellable assets are left.
To go further, however, and "haircut" senior debt or even existing preferred stock similar to that issued via the TARP would create an instability policymakers should not want to risk.
