At rates that high, you will see loan-to-own businesses develop out of MIC's. As noted above, values will be crushed and equity washed out. Result will be a change of wealth for highly leveraged equity-side investors to debt-side investors.
Countries won't be bankrupt if they mark the debt to market, higher interest rates means lower present value of the loan.... so extend the balloon payment, change the mix of interest / principal, or pull a Venezuela. I'm not sure if anyone has noticed this but bankers rarely lose and aren't held responsible for bad social outcomes.