Investors have a change of heart on debt

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It increasingly looks like the best of times for corporate borrowers but the worst of times for private equity firms.

A Dickensian tale is playing out in bond markets, where investment-grade corporate bond issuance took off in February but high-yield issuances remain low and are regarded as practically toxic in 2016.

"So far in 2016, global junk bond volume and activity is the lowest since 2009," a report from finance industry data tracking firm Dealogic said.

It's part of a creeping trend that hasn't gone unnoticed in the private equity business. Debt financing for private equity deals slowed in the second half of last year, as credit spreads increased, a Bain & Co. report said. After four consecutive years of increasing global debt volume for leveraged buyouts, the cash available to private equity firms fell 13 percent last year, from $153 billion to $133 billion, the report shows.

At the same time, private equity firms invested more cash, in part incentivized to increased spending with the expectation of rising interest rates. The $282 billion in private equity investments were more than at any point since the financial crisis, Bain reported.