Bankruptcy Forecaster Sees Junk-Debt Bubble Bursting Next Year
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A bubble in the leveraged-finance market is growing and may burst in 12 to 18 months, said Edward Altman, a specialist in credit markets who developed a model for predicting corporate bankruptcies.
“We think it’s building,” Altman told a gathering of corporate restructuring experts Wednesday in New York. He said the current “benign credit cycle” encouraged by low interest rates has been going on for five years and led to a “frothy” market. “You’ll be busier at this time next year.”