Corporate Debt Concern: Congress may be asked...

Corporate Debt Concern: Congress may be asked to bail out numerous corporations that will be forced into bankruptcy in the next recession because of excessive debt, the chairman of the Senate Finance Committee said. Lloyd Bentsen, D-Texas, said a study that shows a spectacular increase in the amount of high-risk “junk bond” debt since 1980 makes him worry about the possibility of a taxpayer bailout similar to the multibillion-dollar rescue of the nation’s troubled savings and loans. In 1980, one out of 25 bonds was below investment grade; today it is one out of five, Bentsen said. Corporate debt has tripled since 1980. The study said more than $30 billion in junk bonds was issued in the last three years, accounting for more than 20% of outstanding corporate debt.