Now Comes the Great Corporate Deleveraging (BusinessWeek)

June 1, 2009

On June 1, BusinessWeek published a "Viewpoint" column authored by Frank Aquila, titled "Now Comes the Great Corporate Deleveraging". The article suggested that despite some optimism on Wall Street and the high scale of government aid to financial institutions, the road to a full economic recovery will be long and difficult. Mr. Aquila noted the $800 billion in U.S. corporate debt and the more than $1 trillion of corporate high-yield debt that will need to be repaid in the coming years. Now that financial institutions have less lending capacity, they will be unable to lend to companies with immense debt. "The strongest companies will survive and emerge stronger, but many will disappear, at least in their present form," Mr. Aquila said.