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Rising interest rates threaten companies taken over in the LBO boom

Low-rated US companies borrowed record amounts in the credit market last year, benefiting from low interest rates and generous credit. Now all this debt is getting more and more expensive.

So-called leveraged loans typically have fluctuating borrowing costs, and the Federal Reserve’s suddenly faster pace of interest rate hikes will push them higher. Investors are paid better when interest rates rise, which made the loans attractive. Borrowers were interested, too, because interest rates were low and the Fed was on a gradual path to raising them. But inflation has derailed that.

https://www.wsj.com/articles/rising-rates-threaten-companies-acquired-in-lbo-boom-11650406105?mod=rss_markets_main Rising interest rates threaten companies taken over in the LBO boom

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