When Alan Greenspan signed a death warrant for cheap credit, he also set up our economy for a $300 billion junk-bond meltdown that will wreck hundreds of companies. Market pros say the Federal Reserve chairman's moves this summer to hike interest rates from their half-century lows - possibly quadrupling it by late next year - is certain to help the overall economy in time. But his strategy also is expected to topple as much as a third of the $900 billion in junk-bond and high-yield debt in the U.S., leaving a trail of collapsed enterprises, starved without their intravenous feedings of cheap credit to stay alive.

"A number of companies are going to get squeezed badly - and many of them are just barely treading water right now, living on cheap credit," said Robert Miller, an investment banker and partner at restructuring firm Miller Mathis. "Any benefits of the economic recovery aren't necessarily going to trickle down to them."

With higher interest rates, bank credit will grow more costly, siphoning off profits. The drain on cash flows will also likely make long-term debt maturing in the next two years more difficult to satisfy, Miller said.

"Many companies are barely eking out enough cash to pay interest today, and, if their business doesn't pick up it's not a pretty picture ahead," Miller said.

Among giant companies that may not endure the coming meltdown intact are high-profile debt-strugglers including Delta Airlines, US Airways, Charter Communications and Trump Hotels & Casino Resorts.

Even more smaller companies also face a debt-sentence, including Tabletop, the maker of sugar substitute Equal, and popular foam - cushion maker Foamex International.

"Lenders are going to be pulling the trigger in ways they haven't for years," said economist Edward Altman, a leading authority on credit markets. "Even the most questionable firms were able to refinance. Not only was there plenty of cheap credit, it was surprising that they were able to get it so easily at all," said Altman, who's also research director for a think-tank at NYU's Stern School of Business, the Salomon Center. "A lot of smart money bailed out companies and got the stock prices up, and, in so doing, protected their own stakes in the questionable companies," Altman said. Profits were also gargantuan for lenders in the high-yield bailout heyday of the past three years, Altman said.

"Anything with even a scent of risk did well. The returns were truly remarkable - so there was a great tolerance for bailing out companies," he said.

Bailout money, however, was seldom used for investing in plants, products and people and instead went to rollover previous debt and higher-yielding interest.

"Fully 60 percent of the money raised in 2004 was used solely for refinancing," Altman said.

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