Corporate defaults set to rise slightly as Federal Reserve tightens

The interest rate hike expected by the Federal Reserve on Wednesday will likely make it more difficult to refinance the debt of troubled companies as a long period of ultra-low rates comes to an end.

Borrowing costs for many publicly traded companies are poised to follow higher rates, which should lead to an uptick in credit defaults, as well as potential opportunities for distressed investors. Business defaults and bankruptcies have hovered near their lowest rates in decades, the result of near-zero interest rates…


Wj

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