All articles tagged with #debt burdens
Despite the success of some tech companies, many are struggling with debt, leading to a situation where creditors are turning against each other in a bid to get repaid. Troubled tech firms like Alvaria Inc., GoTo Group Inc., and Rackspace Technology Inc. have agreed to restructuring deals that provide select lenders with better terms on debt swaps than others, leading to what is being called 'creditor-on-creditor violence.'
The World Bank has warned that surging interest rates are causing record levels of debt for the world's poorest countries, hindering investments in public health, education, and infrastructure. Low- and middle-income countries paid $443.5 billion towards principal and interest in 2022, the highest level in history, with projections of a 40% increase in 2023 and 2024. Over half of low-income countries are facing debt distress, prompting calls for debt restructuring to avoid a "lost decade." The variable interest rates and a stronger US dollar have made repayment more challenging, leading to an increase in government defaults. The mounting debt burdens have also made it difficult for developing countries to attract new investment and financing, with new loan commitments declining by 23% in 2021. Efforts for debt relief have been slow, with China criticized for being an obstacle to debt restructuring agreements.