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I used to think if there was reincarnation, I wanted to come back as the President or the Pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everyone.

--James Carville

Last week, I mentioned that KKR had canceled a loan deal for Maxeda, a Dutch department store.

Now comes another story. Expedia (EXPE) had this great idea to buy back a gazillion shares of their stock. Not with money, but with “future money” otherwise known as debt.

The bond market looked at the plan and said, “no dice.” Bloomberg reports:

At least 20 companies have canceled or postponed debt offerings since June 26 as credit markets grow tighter.

The extra yield investors demand to own high-risk, high- yield, or junk-rated corporate bonds has jumped 0.85 percentage points to 3.37 percentage points since the day before Expedia announced its share buyback, according to Merrill Lynch & Co. index data.

EXPE dropped 9% yesterday.

Posted by edelfenbein at July 24, 2007 10:09 AM