SVB Collapse Complicates Banks’ Efforts to Unload More Than $25 Billion of Junk Debt

Recent turmoil in the banking industry has made the already-difficult task of selling off tens of billions of risky buyout debt even harder for Wall Street firms.

Bank of America Corp., Barclays PLC, Morgan Stanley and others together currently hold $25 billion to $30 billion of “hung debt” on their balance sheets, according to leveraged-finance analytics firm 9fin. The unsold debt is tied to leveraged buyouts that banks agreed to finance before worsening credit conditions last year sapped investor appetite for the paper.