The surprising resilience of the US economy would seem, on the face of it, to be good for corporations. But as the expansion plows ahead, pressures are forming beneath the surface to threaten some of the country’s riskiest companies.
Many heavily indebted corporate borrowers have been able to kick their problems down the road, refinancing debt or reworking terms amid buoyant credit markets. With a slew of Federal Reserve interest-rate cuts once widely expected, their thinking was that they wouldn’t have to wait long to gain breathing room to repair their balance sheets.