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Bond Downgrades Escalate With Leverage Highest Since 2007

Credit quality for U.S. companies is showing signs of weakening as issuers from Verizon Communications Inc. to Apple Inc. borrow unprecedented amounts of money to expand and reward shareholders.

A total of 223 companies had their bond ratings cut by Moody’s Investors Service in the six months ended November, compared with 172 increases, the highest proportion of downgrades since April. Issuers took advantage of borrowing costs that averaged a record-low 3.83 percent this year to sell an unprecedented amount of bonds, with 15 percent of offerings funding shareholder payouts, the most in five years.