Should the world worry about America’s corporate-debt mountain?

According to the Bank of England, nearly $800bn of the leveraged loans outstanding around the world have been bundled into s; the instruments soak up more than half of the issuance of leveraged loans in America, according to , the leveraged-loan unit of Global Market Intelligence. For evidence of a deterioration in the quality of credit, the worriers point to the growing proportion of leveraged loans issued without “covenants”—agreements which require firms to keep their overall level of debt under control. In 2013 American regulators issued guidance that banks should avoid making loans that would see companies’ debts exceed six times .

Source: www.economist.com