BW Online | August 13, 2003 | Will Debt Weigh Down the Recovery?

"TROUBLED BORROWERS....many companies are now devoting a bigger chunk of their operating profits just to servicing their debt. A recent study by Merrill Lynch reveals that the 'interest coverage ratio' for the S&P nonfinancial companies has declined steadily since 2000. The ratio, which measures a company's ability to pay its debt service out of operating profits, has seen operating profits slip from 6.3 to 5.3 times debt since 2000, the lowest level since 1995. "