Leveraged-Loan Surge Led by Junk Borrowers Repricing Debt, Again

The huge demand for leveraged loans is leading many junk-rated companies to reprice their borrowings multiple times, cutting into interest income for investors.

Of the 53 loans for risky borrowers that hit the market this week through Thursday morning — together worth more than $80 billion — all but 13 of them are being put toward cutting borrowing costs on existing debt.

Many of the companies that refinanced existing debt late last year or early this year were restricted from repricing that debt again for six months. That six-month “call protection” is now rolling off, allowing the borrowers to ...