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Growing Pile of Distressed Debt Signals Coming US Default Wave

  • Troubled bonds and loans total most since September 2020
  • Borrowers deterred from refinancing by rising rates, outlook

A heap of distressed debt is expanding in the US corporate bond market and investors worry that a burst of defaults will follow.

The amount of dollar-denominated bonds and loans trading at levels indicating distress is the largest since September 2020, reaching $271.3 billion last week after five straight weeks of growth, according to data compiled by Bloomberg.