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Distressed Debt in U.S. Doubles to $500 Billion in Two Weeks

  • U.S. energy sector has largest share of troubled borrowers
  • Could be ‘worse than 2008’ as pandemic spreads, analyst says
Pedestrians walk along on Wall Street near the New York Stock Exchange on March 13. 

Pedestrians walk along on Wall Street near the New York Stock Exchange on March 13. 

Photographer: Mark Kauzlarich/Bloomberg
Updated on

In less than two weeks, the amount of distressed debt in the U.S. alone has doubled to a half-trillion dollars as the collapse of oil prices and the fallout from the coronavirus shutters entire industries.

In all, U.S. corporate bonds that yield at least 10 percentage points above Treasuries, as well as loans that trade for less than 80 cents on the dollar, have swelled to $533 billion, data compiled by Bloomberg show. On March 6, the total was $214 billion. If you count all company debt globally, including loans to small- and mid-sized companies that rarely if ever trade, the distressed pile could top $1 trillion, estimates from UBS Group show.