In Europe, 95% of all leveraged loans are now "cov-lite," meaning that companies have made few or zero promises to investors about how they get their money back. Globally, it's over 80%. "It's deeply concerning to me when you see the covenant erosion taking place here," J.P. Morgan's Michael Cembalest told Business Insider. "The leveraged loan market is one of those markets that is highly liquid when everyone wants them but really illiquid when no one wants them," Cembalest said. "In bad markets liquidity goes down." Read more Business Insider Prime stories here.