America’s $1.4tn risky corporate loan market has been hit by the biggest slew of downgrades since the depths of the Covid crisis in 2020, as rising borrowing costs strain businesses piled high with floating-rate debt.
US junk loan downgrades numbered 120 in the quarter to June, according to an analysis by JPMorgan, amounting to $136bn — the highest total in three years.
Leveraged loans are issued by heavily-indebted companies with non-investment-grade credit ratings, and typically have floating coupons that move with prevailing interest rates. Some of the US companies that have been downgraded in recent weeks include Aspen Dental Management, MedData and investment software company Confluence Technologies.
Read the full story on the Financial Times here.