The Rise of Interest Rates in the Market

A lot of companies put in place capital structures with the expectation that rates were not going to increase significantly and then they did. Interest coverage ratios have dropped to dangerously low levels for some borrowers, especially when you calculate that with a forward projection of base rates above 5% for a full 12 months. I think we will expect borrowers to increasingly need these types of concessions from their lenders or ask for additional equity injections from their owners.