There's been a lot of talk about how much the credit default swaps of top banks, like Goldman Sachs and JPMorgan Chase have really soared as people fret about their  exposure to the on-going credit crisis. The Financial Times estimates that the top banks have eaten about $40 million in high-yield loans that they couldn't syndicate out. So all the fears about bridge loans seem to be coming true. Yikes. The biggest lenders remain the commercially oriented banks. But investment banks have also boosted their activity in this regard. The best outcome would be if banks let the turmoil settle and then place the debt somehow. That might require sweetened terms, which most sponsors would (should) agree to. The bad news scenario would be if the loans cannot be placed, tying up capital. That would slow the deal machinery even more.  

For more:
- here's the FT item