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Corporates seek to cover their embarrassment

These are not happy times in corporate credit. Accounting and trading scandals, miserable results and defaults have produced dire results for investment-grade issuance. Now finance directors are doing their utmost to avoid suffering humiliation in the markets.

As one debt capital markets banker remarks about the world's corporate bond issuers: "Nobody wants to be caught on the stage with their pants down." It's too true - when the market and media are obsessed with the latest accountancy scam, earnings restatement, ratings downgrade or liquidity scare, avoiding a simultaneous bout of pant-dropping and limelight-hogging in the corporate credit markets has been a major concern for all finance directors since the beginning of the year.

But that was before the week beginning June 24, when a volatile six months came to a head. First there was the news that France Telecom had been downgraded two notches by Moody's to the brink of junk status. Then on the Tuesday WorldCom topped this with the news that it had overstated profits by $3.8

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