Corporate debt is the next subprime?

Discussion in 'Wall St. News' started by a529612, Mar 29, 2007.

  1. Companies have increasingly been leveraging their balance sheets, putting them at risk of default in the next 12 to 18 months, according to the analysts at Standard & Poor's.

    A corporate credit crunch isn't directly linked to the mortgage market, but in the credit cycle the markets tend to move in unison or with one lagging the other. A mortgage-market meltdown would also make it tougher on Main Street and rash of defaults could cause a chain reaction: making it tougher for private equity shops to borrow and buy, slowing mergers and IPOs and shutting down much of Wall Street.{13FFBA8D-EFBF-44F0-BA75-BAF0AFA31CDC}