Riskiest Borrowers Left in Lurch by Bank Mayhem: Credit Weekly

It’s getting harder for the riskiest corporate borrowers to raise cash.

As the banking crisis this past week largely brought corporate bond and loan offerings to a halt, borrowing costs for junk-rated issuers surged, tipping the market value of debt for some of the most vulnerable companies into distressed levels.

The average yield spread — extra money investors demand for holding weaker debt — on US bonds with the worst credit ratings vaulted past 1,000 basis points. Leveraged loans — the other main financing option for risky companies — plunged to a 10-week low, and companies pulled ...