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2020-03-12

The Bad News Is That the News Is Really Bad

What matters critically, and what was roiling markets Wednesday, is credit. 

Particularly in the U.S., companies are over-leveraged after years of minimal interest rates.

Companies with weak balance sheets have suffered the worst

The earnings slump may last only a matter of months, but that may be longer than a heavily indebted company can survive. 

John Authers Bloomberg 12 mars 2020 05:01 CET

The rating agency’s response shows how a public health crisis is prompting a sudden reassessment of corporate credit risk, raising doubts about borrowers that had long been seen as stable. 

That is changing how markets view sectors from cruise lines to retailers, forcing companies as large as Boeing and United Airlines to review their borrowings, and posing the risk of financial institutions being saddled with problem loans. 

FT 12 March 2020







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