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The article specifically mentions commercial bank lenders, which are regulated. While I'm sure there are non-bank lenders in this space, a commercial bank can't delay repayment without a charge to the loan-loss reserve, and taking stock in lieu of payment, unless the stock is good as cash, is also a loan impairment. Unregulated commercial lenders have more freedom, but they are also constrained by GAAP.



So they take a hit on the loan value which their funders might expect give tge returns they aim to produce.

Junk bonds are nothing new.




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