Distressed Energy Debt Jumped by $11 Billion Amid Oil Collapse
- Energy sector makes up biggest portion of U.S. distressed debt
- Continued oil turmoil may mean more defaults and bankruptcies
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Distressed debt in the U.S. energy sector has jumped to $190 billion, up more than $11 billion in less than a week, as oil prices tumbled below zero.
The collapse of oil makes investors nervous about whether energy companies will be able to repay their debt. Energy sector distressed debt -- bonds that yield at least 10 percentage points over Treasuries and loans that trade for less than 80 cents on the dollar -- totaled $190 billion on Tuesday, according to data compiled by Bloomberg. That’s up from $179 billion on April 15.