Originally Posted by
Excargodog
Ad hominem attacks do not change reality. Reality is that debt financing for junk-rated companies has nearly tripled in cost and if you don’t think that affects airlines - most of which are junk-rated after COVID - you are simply wrong.
Why do rising interest rates have any bearing on junk bonds American already sold? The bonds are secured at relatively low rates, sub 7% last time I checked, which seem like a bargain in this environment. There's really no reason to refinance debt, as they have decent rates locked in. Now, I will be the first to admit that their balance sheet is atrocious, but as long as they continue to cash flow, they will be able to service the debt.