The article says just the opposite.
> Cheaper leverage? Not likely. High rates of inflation generally cause borrowing to become dearer, not cheaper. Galloping rates of inflation create galloping capital needs; and lenders, as they become increasingly distrustful of long-term contracts, become more demanding. But even if there is no further rise in interest rates, leverage will be getting more expensive because the average cost of the debt now on corporate books is less than would be the cost of replacing it. And replacement will be required as the existing debt matures. Overall, then, future changes in the cost of leverage seem likely to have a mildly depressing effect on the return on equity.
To be honest my intuiton is like yours. I still haven't managed to reconciliate my intuition with the above quote. I guess it would be something like this: It is true that inflation means that the stream of cash you will pay back is worth less, but the costs of keeping your business running (which in turn is what generate those stream of cash) also goes up. When this happened, lenders become more strict.
You can read further down:
> Nevertheless, given inflationary conditions, many corporations seem sure in the future to turn to still more leverage as a means of shoring up equity returns. Their managements will make that move because they will need enormous amounts of capital — often merely to do the same physical volume of business