Junk Bond Investors Vexed as Ebitda Figures Sweetened for Covid

High-yield investors are rallying against borrowers adjusting their financial results to include earnings lost to the coronavirus pandemic.

The new measure is referred to as Ebitdac - earnings before interest, taxes, depreciation, amortization and coronavirus. A group of leveraged finance investors in Europe said Monday that the measure is “inappropriate” and could lead to “fictitious figures”.

“It sets a dangerous precedent if companies start adding back revenues that don’t exist and may never come back,” said Sabrina Fox, executive adviser at the European Leveraged Finance Association which published the report on Ebitdac. “This figure should not be used to ...