There's been a steady drumbeat of warnings about a surge in risky corporate borrowing-but not much clarity about how serious the threat is. At issue is the more than $1 trillion market in leveraged loans. That's Wall Street jargon for high-interest loans to business with less than rock-solid finances. Federal Reserve and European Central Bank officials have drawn attention to the rise in corporate debt and the deterioration of lending standards. The loans are often bundled into securities knownas collateralized loan obligations (CLOs).
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