US Distressed Loans Hit Pandemic High Led by Tech Sector

JPMorgan Chase & Co. strategists have reported that the value of deeply distressed loans in the US has surged to its highest level since the early days of the pandemic. According to their findings, loans trading below 60 cents on the dollar now total $65 billion, up from $40 billion a year ago.

The technology sector is experiencing the most pressure, contributing significantly to the rise in distressed loans. This trend marks a notable shift, as the last time such high levels were observed was in March 2020, at the onset of the COVID-19 pandemic.

JPMorgan's report, released on Tuesday, highlights the growing challenges within the leveraged loan market. The increase in distressed loans indicates heightened financial stress among borrowers, particularly in the tech industry.