“Taxation of High-Yield Debt – Beware the End of the Reprieve,” Tax Notes, Vol. 124, No. 11, Sept. 14, 2009 TNT 2009-9-14 AHYDO reprinted in The Corporate Tax Practice Series, Practicing Law Institute (Louis Freeman ed. 2013);
I. INTRODUCTION
A. Prelude
At the end of the 1980s, the United States faced a collapsing investment bubble involving exotic debt securities, looming corporate bankruptcies, and failing financial institutions. The bubble was fueled by leveraged buyouts (LBOs), the exotic securities were the junk bonds that funded them, and savings and loan associations were collapsing under the weight of investment portfolios overwhelmed with junk bonds.