Heavily indebted companies owned by private equity firms, including Harrah’s Entertainment and Realogy, are asking their bondholders to accept a big cut in the value of their investments or risk falling behind other creditors in getting repaid.
Such offers are allowed under a provision of the relevant debt issues called an “accordion feature” – which says the company can issue additional senior debt and relegate existing bondholders to a more junior position in the capital structure.



