Growing Pile of Distressed Debt Signals Coming US Default Wave

A heap of distressed debt is expanding in the US corporate bond market and investors worry that a burst of defaults will follow.

The amount of dollar-denominated bonds and loans trading at levels indicating distress is the largest since September 2020, reaching $271.3 billion last week after five straight weeks of growth, according to data compiled by Bloomberg.

Companies that binged on low-cost borrowing in recent years are facing the prospect of refinancing at exorbitant yields -- if they can find any investors -- as the Federal Reserve raises rates to battle persistent inflation, threatening to push the economy ...