Leveraged loans, covenant lite agreements and historically low interest rates and defaults gave us a frothy corporate debt market. An economic downturn could be crushing on weak banks/FI’s and investors, as well as companies on the edge.

The article by Fortune discusses the issues in more detail. Long story short, we are operating at the marginal edge, and any blip is likely to cause a corporate debt crisis similar to the housing crisis of 2008. Forewarned is forearmed.

https://fortune.com/2019/12/29/financial-crisis-corporate-debt-lev-loans-covenants/?fbclid=IwAR3bqWYUEM0ZerD9T-hI-_xA4aHGAFGzAq9Ejjkq_VNmn5zmdj42sG7HAnU

Leave a Reply

Your email address will not be published. Required fields are marked *