Junk Debt Market Freeze Risks $35 Billion Banker Headache (1)

Banks that agreed to help private equity firms and highly leveraged companies fund recent acquisitions may have to come up with billions of dollars of their own cash to finance the deals if the market for risky debt remains shut.

Underwriters across Wall Street have committed to providing more than $30 billion to junk-rated companies by mid-year, according to data compiled by Bloomberg and people with knowledge of the matter who asked not to be identified because not authorized to speak publicly.

But with the markets for leveraged loans and high-yield bonds virtually shut since the Covid-19 pandemic triggered fears ...