The IT Group Inc.’s $225 million tranche of 11.25% subordinated notes dove 70 points in the last seven weeks as investors lost confidence in the company’s ability to renegotiate the debt covenants with its lead lender Citigroup. And at least one high yield source predicted bankruptcy within six months. IT, a diversified engineering and environmental consulting agency, is now, it seems, paying the price for over-active M&A which didn’t yield the anticipated cash flow.
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