St. Aubin Talks Risky Borrowers & Rising Loan Costs on the Wall Street Journal
"Rising Loan Costs Are Hurting Riskier Companies"
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Excluding a 2020 spike, the default rate for the past 12 months is the highest since 2014.
The strains come at a time when leveraged-loan funds have put up outsize performances. Investors had feared that rising rates would hurt risky borrowers, particularly if they spark a recession. Instead, a strong economy has helped issuers withstand rising interest costs while bonds with low fixed rates have tumbled, amplifying the advantage of floating-rate debt.
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