US leveraged loans trading at 80 cents hit $140B, nearing peak

JPMorgan Chase & Co.: JPMorgan Chase & Co. is a global financial-services company whose investment-bank research teams analyze credit markets and corporate debt. Its strategists were cited in the news as the source of the assessment that distressed U.S. leveraged loans have approached pandemic-era levels. U.S. leveraged loan market: The U.S. leveraged loan market provides debt financing to companies with relatively high leverage, including private-equity-backed borrowers. The news highlights a sharp expansion in loans trading at distressed prices, indicating increased concern about borrower credit quality and refinancing risk. Credit stress: JPMorgan strategists reported that leveraged loans trading below 60 cents on the dollar have reached the highest level since the early pandemic period. Market concern: Fitch Ratings reported that loans classified as being of market concern had reached a record level, signaling broader pressure beyond the most deeply distressed credits. Refinancing risk: Recent credit-market analysis has identified rising rates, slower growth, tighter financing conditions, and upcoming refinancing needs as key pressures on highly indebted borrowers.