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Rising rates threaten companies acquired in LBO boom


Poorly rated U.S. corporations borrowed record amounts in the loan market last year, underscoring soaring floating-rate debt as interest rates are set to rise dramatically.

An economy-wide crisis is hitting everything from mortgages to commodity prices as the Federal Reserve tightens monetary policy in an effort to control inflation. Interest charges on floating rate loans rise with interest rates, making them attractive to bond investors as an alternative to bonds, which pay a fixed coupon regardless of how benchmarks rise .


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