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NEW YORK (AP) - Companies that borrowed money during the boom times to finance takeovers, share buybacks and other adventures are discovering that what they thought was cheap debt is turning out to be very expensive.
Adding massive leverage to corporate balance sheets didn't seem like a bad idea a year ago when the credit markets were awash with liquidity. Don't worry, companies said to stock and bond investors, the extra debt costs won't be a burden.
They didn't anticipate how the economic downturn would hurt business and crimp cash flows. Now, those debt obligations are weighing on some companies so much that they are causing distress.
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