SVB Collapse Complicates Banks’ Efforts to Unload Over $25 Billion of Junk Debt

Current turmoil in the banking industry has made the already-difficult process of promoting off tens of billions of dangerous buyout debt even tougher for Wall Road corporations.

Financial institution of America Corp., Barclays PLC, Morgan Stanley and others collectively at present maintain $25 billion to $30 billion of “hung debt” on their stability sheets, in accordance with leveraged-finance analytics agency 9fin. The unsold debt is tied to leveraged buyouts that banks agreed to finance earlier than worsening credit score situations final yr sapped investor urge for food for the paper.