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Published on Gold Anti-Trust Action Committee (http://www.gata.org)

Distressed debt hits almost $1 trillion, nears 2008 peak

By cpowell
Created 2020-03-26 04:26

By Katherine Doherty
Bloomberg News
Wednesday, March 25, 2020

The amount of distressed debt in the United States has quadrupled in less than a week to nearly $1 trillion, reaching levels not seen since 2008 as the collapse of oil prices and fallout from the coronavirus shutters entire industries across the globe.

In total, the tally has ballooned to $934 billion of U.S. corporate bonds that yield at least 10 percentage points above Treasuries and loans that trade for less than 80 cents on the dollar, according to data compiled by Bloomberg. That's nearly double the amount from less than a week ago.

... Dispatch continues below ...



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The total is probably even higher, because the calculation excludes debt of small-to-medium sized companies whose loans trade rarely, if at all.

The coronavirus pandemic has caused the worst selloff since the global financial crisis and deepened stress in credit markets. Driven by some of the lowest oil prices since the early 2000s, the amount of distressed bonds has surged to the highest level since April 2009.

"What we are seeing now is fast and violent," unlike the gradual selloff in the 2007 and 2008 crisis, said Phil Brendel, a senior distressed credit analyst at Bloomberg Intelligence. If the virus isn't suppressed, even more distress is possible, according to Brendel. "The worst is yet to come," he said. ...

... For the remainder of the report:

https://www.bloomberg.com/news/articles/2020-03-25/distressed-debt-ballo... [4]

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Source URL:
http://www.gata.org/node/19997