Incremental lending has grown so much in part because investors agreed to allow it in the first place. For much of the year, money managers were so eager to make loans that they would consent to just about any terms, including allowing companies to add on more loans. The growth of incremental debt underscores how permissive lending markets have become, and why so many money managers and rulemakers are watching corporate borrowings warily now……..“A lot of the extra debt is paid out to private equity owners as dividends, so at some point you should be investing in those firms and not the loans.”
