While the proliferation of SPAC in 2020 and this year has raised valid considerations about the dangers to equitable investors, Cohen found that SPAC’s target corporations generally emerged after the merger into a more powerful monetary position, an improvement that reflected the credit quality of its debt.
“The debt value of target companies has experienced a value appreciation of up to 4% after a SPAC announced a target company,” Mr. cohen. “In addition to value increases, credit investors gain advantages from significant deleveraging (i. e. increased solvency) and a new liquidity injection into the target company (i. e. increased liquidity). rates. -control promoting securities or loans traded below the pair that can gain advantages from a SPAC transaction.