Corporate Debt Crises Could Come Faster and Harder in 2019

At first glance, 2019 might look like a quiet year for distressed-debt investors, judging by the small list of troubled bonds coming due. But the light schedule may be obscuring how quickly some issuers will unravel.

As Toys “R” Us demonstrated, weak sales and nervous trade creditors can bring down a company long before the maturity dates for loans and bonds. What’s more, secured debt isn’t as secure as it used to be: Top-heavy capital structures and loose covenants could leave little for junior creditors to recover if an issuer goes bust.

Even first-lien holders may have to lower their ...