Companies that went on a borrowing binge may default on their debt as interest rates increase and the prospect of a recession grows, according to Scott Minerd, chief investment officer of Guggenheim Partners.

After skirting defaults and bankruptcies during the last recession, corporations may not be as lucky this time around, Minerd said in an interview on Bloomberg TV on Wednesday.

“There are a lot of companies that are zombie companies that survived the last cycle,” he said. “With rates going up, it will be harder and harder (for them) to stay alive.”

Since the last recession, low interest rates have spurred U.S. companies to lever up, using cheap debt to buy back stock and boost equity prices. Within three months, as Libor rates tick up, many are going to struggle with debt service and free cash flow, Minerd said. Highly-levered firms will also get hit with a new tax reform policy that limits their ability to deduct interest costs.

Minerd said as far as debt risk media and utilities sectors are “disturbing places.” Guggenheim is “moving away” from high-yield debt and bank loans, he said.

Minerd also predicted the yield curve would be “relatively flat” by this time next year, and, if the Federal Reserve continues raising rates, the curve will be inverted by the end of 2019. Following historic trends, the U.S. economy would be looking at a recession within six to 12 months of a yield inversion, or as soon as late next year or the first half of 2020, he said.