Is the easy credit party over? From euphoria and record deal levels just a few months ago, the corporate loan and bond markets are suffering something like a whopping hangover. The days of 'covenant-lite' have ended as investors are shunning riskier loans and demanding tougher terms.

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Is the easy credit party over? From euphoria and record deal levels just a few months ago, the corporate loan and bond markets are suffering something like a whopping hangover. The days of 'covenant-lite' have ended as investors are shunning riskier loans and demanding tougher terms.

Call it "back to the future" for the corporate debt market. After a year in which borrowers were typically accorded the red-carpet treatment when they came to market, the investment community--which includes hedge funds, mutual funds and bank syndicates--has turned downright surly.

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These investors, who had formerly acquiesced to an array of debt-financing schemes and structures that "all go in the bucket of borrower-friendly terms," says Bob Filek, transaction services partner at Price water house Coopers, are now playing hard to get. They are insisting on higher interest rates and coupons for both investment-grade notes and junk bonds, shunning bond structures known as "covenant-lite" for their easy terms and turning up their...

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