london april 4 reuters  a distressed debt cycle in which the number of companies with too high a debt load or refinancing problems rises is here and likely to stay in place for some time the founder of strategic value partners svp told reuters victor khosla also chief investment officer of the investment firm focused on opportunistic credit and private equity said a steep rise in interest rates had fundamentally changed the economic and financial environment for the first time in 30 years you see a cycle where the central banks are not your friend and with higher rates for longer  the distressed cycle is not just around the corner its already partly here said the founder of svp which manages roughly 17 billion of assets a common indicator of corporate distress is the discounted price at which bonds trade khosla noted that about 23 of junkrated bonds globally are trading below 80 cents on the dollar close to the 2530 rate seen in previous distressed cycles such as during the 2020 covid crisis recent turmoil stemming from the us and european banking sectors has tightened financing conditions and raised recession risks and although major central banks have sounded more cautious further rate hikes remain likely given sticky inflation the mindset we have as we approach this cycle is its a couple of years down and a couple of years up no one month down and one up like covid khosla said referring to increases in distressed debt opportunities he added that recent market turmoil had exposed fragilities in the banking sector accelerating the distressed debt trend corporate distress levels in britain have accelerated to their highest since june 2020 an index compiled by law firm weil gotshal  manges showed last month tighter credit conditions imposed by banks mean companies with heavy debt piles and falling earnings will likely struggle to refinance their debt in particular firms in the industrial sector struggling to pass on higher costs from raw materials and labour and interestrate sensitive businesses such as real estate will be under pressure khosla said in some ways weve been on a little bit of a sugar high with what the central banks did in regard to monetary policy khosla added referring to the easycash era now theres a period of indigestion as we return more to the norm reporting by chiara elisei editing by dhara ranasinghe and mark potter