The tower of US corporate borrowing has grown taller and shakier than ever. The credit offer has assumed extremly generous proportions since the financial crisis and that offer has been accepted to an increased extent. The level of new borrowing is 50 per cent higher than in 2007 in nominal terms, and the typical quality of new debt issuance ha fallen appreciably. The massive growth of covenant-light (cov-lite) loans and the increased take-up of credit from issuers with the weakest investment grade ratings has raised the stakes appreciably.
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