Credit market cracks widen as distressed debt nears $650 billion

Multiple stress points are emerging in credit markets after years of excess, from banks stuck with piles of buyout debt, a pension blow-up in the UK and real-estate troubles in China.

With cheap money becoming a thing of the past, those may just be the start. Distressed debt in the US alone jumped more than 300 per cent in 12 months, high-yield issuance is much more challenging in Europe and leverage ratios have reached a record by some measures.

The strains are linked to aggressive rate increases by the Federal Reserve and central banks around the world, which have dramatically changed the