Going public by only selling bonds

Suppose that a private company wants to raise money, but they want to do so only be issuing debt (i.e. bonds). Why isn't this method of raising money more common? I realize how an LBO works by issuing massive amounts of debt to buy out a company. But suppose that there is a new company. This company wants to not dilute the existing shareholder's value, and therefore, it only wants to issue debt. Is this possible or common? If so, why/why not?

Reply to
e^(ix)
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It's possible, but it is still a private company. A bondholder is not an owner in the company.

704set

Reply to
704set

Donald Trump sold bonds to finance one of his Atlantic City properties. Eventually, the bondholders had to settle for a few pennies on the dollar plus stock in a newly (since bankrupted) public company.

Reply to
lubow

It's possible, but you're still a private company (you do have to make some SEC filings on your commercial paper).

One example I can think of off the top of my head is Belk, the department store chain.

Reply to
Charlie Perrin

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