Cover Story: Debt crunch unlikely - News Summed Up

Cover Story: Debt crunch unlikely


A rising interest rate environment is always perceived as bad news for everyone (except for interest-earning banks, of course) amid concerns about higher borrowing costs. Contrary to perception, an analysis by The Edge found that they are perhaps not as susceptible to the impact of interest rate hikes as perceived despite their high leverage. If [the rate hike is] done gradually, most can adjust to the normalisation of interest rates,” he tells The Edge. Fixed-rate loans typically cover corporate bonds, although some bank loans have fixed interest rate charges too. Be it bonds or fixed-rate bank loans, the new bond issuance or bank loan will come at a higher cost to match the market.


Source: The Edge Markets August 04, 2022 18:01 UTC



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