Kia Motors Corp. canceled a $500-million bond sale Thursday as skittish investors continued to back away from the market for riskier assets.
In recent days at least seven companies have canceled or postponed at least $2.2 billion in bond and note sales amid concern that corporate debt could suffer the same kind of losses incurred by bonds backed by sub-prime mortgages.
"This may mark a tipping point in the credit cycle," said Robert Appleby, who helps manage $2 billion at ADM Capital in Hong Kong. "If we see a shakeout, it will be a healthy one because it will prevent deals from being priced incorrectly."
Retailer Dollar General Corp., which is being acquired by Kohlberg Kravis Roberts & Co., sold $1.9 billion of notes Thursday after restoring to the deal $725 million of riskier securities it had cut earlier in the day.
In the sub-prime sector, London-based Caliber Global Investment Ltd., a $908-million, publicly traded hedge fund invested in mortgage-backed securities, said Thursday that it would close after losses. Buyout firm Carlyle Group in Washington cut the size of its initial public offering for a mortgage-bond fund by 25% to $300 million.