Troubled Borrowers Seen Fighting for Runway Without Fed Cuts
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Many heavily indebted corporate borrowers are facing challenges as the expected timing of Federal Reserve interest-rate cuts is pushed back and even called into question. Struggling companies now face an extended period of elevated borrowing costs, pinched cash flows, and rising defaults. While default rates are not yet at alarming levels, cracks are starting to form as the expense of managing heavy debt burdens puts a squeeze on finances. Private equity-owned companies, in particular, are hurting after failing to hedge their floating-rate borrowing costs during the easy-money era. The situation is not yet near a crisis point, but the risks are rising.

#CorporateDebt #FederalReserve #InterestRates #StrugglingCompanies

https://www.bloomberg.com/news/articles/2024-04-19/troubled-borrowers-seen-fighting-for-runway-without-fed-cuts