Paying Up to 14% Rates, New Debt Deals Are Distressed From Start
- Carnival, Landry’s paying double-digit rates to weather virus
- Nordstrom borrows at 8.75% after earlier talks of around 10%
Photographer: Tim Rue/Bloomberg
This article is for subscribers only.
Companies that are generating essentially no revenue are borrowing at unprecedented high rates to keep their businesses alive through the pandemic -- even at the risk of adding millions more in interest expense.
So far, investors are proving more than willing to lend at these astronomical rates, brushing aside questions over whether some of the companies will be able to make good on the payments. With Treasury yields so low, the companies are effectively borrowing at distressed levels out of the gates.