Leveraged Loan Market Sees More Companies Failing as Rates Rise

The US leveraged loan market is getting increasingly jittery about some borrowers, after previously signaling that the majority of the market will breeze through rate hikes, inflation, and weaker economic growth.

About 3.2% of loans are trading at less than 80 cents on the dollar, up from 2.8% at the end of June and 1.5% at the end of last year, according to an analysis by Barclays Plc strategists. On the flip side of that, just 42% of the market is trading between 98 and 100 cents, down from 78% in December.

There’s a wider dispersion of ...