Distressed debt specialist Howard Marks warns on corporate borrowing burden
Investor says even companies that can return to profit may struggle to service their liabilities
✒ As companies went on a borrowing binge in 2020, stockpiling cash to outlast deep declines in turnover caused by the pandemic, Howard Marks warns on possible shift from liquidity to insolvency phase, pointing out that “even borrowers that eventually are profitable may find themselves over-levered after the pandemic and struggle to service their debt.”
I look forward to reading the elaboration of this view in his next Memo.