Great yield, less covenants: They're "covenant-lite" loans, and institutional investors are lining up for more.

Named for their lack of standard financial covenants-requirements and restrictions placed on a borrower in a loan agreement-these loan-bond hybrids are fast becoming a regular feature of the leveraged-lending landscape. Just this week Donaldson, Lufkin & Jenrette brought a $75 million loan to market for chemical producer Pioneer Americas that uses the covenant-lite structure.

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