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Default Risks Mount for High-Risk Borrowers Amid Economic Uncertainty.

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Source: MarketWatch
Default Risks Mount for High-Risk Borrowers Amid Economic Uncertainty.
Photo: MarketWatch
TL;DR

Leveraged loan defaults have reached $24.5 billion, putting the sector on track for the third-worst year in history, according to Goldman Sachs. The rise in defaults is due to the Federal Reserve's interest rate hikes, which have hit borrowers with floating-rate debt particularly hard. Leveraged loans are high-risk financing for companies with substantial debt and poor credit histories, and have given rise to leveraged corporate buyouts. The sector has also produced collateralized loan obligations and exchange-traded funds.

Topics:businessfinance#corporate-debt#defaults#federal-reserve#finance#interest-rates#leveraged-loans
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  1. Leveraged loan defaults hit $25 billion, head for third worst year in history, says Goldman  MarketWatch
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  4. U.S. junk loan defaults surge as higher interest rates start to bite  The Globe and Mail
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