, Columnist
Everyone’s a Rising Star When Debt Is Cheap
Rock-bottom financing has led to a wave of credit upgrades, but how will those ratings hold up when borrowing costs increase?
Leverage has ticked higher relative to where it was before the pandemic.
Photographer: Ron Antonelli/Bloomberg
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It has never been easy to accurately assess credit risk. But it’s becoming even more difficult in an era of unprecedented government intervention and cheap money.
Credit risk and interest-rate risk are increasingly intertwined. Companies look better and more capable of repaying their debts simply because overall borrowing costs are so low.