Buyout Frenzy Is Loading U.K. Household Names With Junk Debt

Leveraged buyouts are flooding the U.K. with more junk debt than ever -- and that’s bad news for the finances of some of the country’s best-known companies.

Britain’s market for high-yielding, non investment-grade, bonds has ballooned by more than a third in the past 12 months as private equity firms, lured by a benign regulatory environment and the so-called Brexit discount, have snapped up companies from supermarket chain Asda Group Ltd. to roadbuilder John Laing Infrastructure Ltd. But as the buyers typically finance their acquisitions by loading debt onto their targets, it’s a trend that could leave many companies vulnerable in the future.