The Moral Hazard of Corporate Borrowing
https://youtu.be/Fcof1kf0cyA Two years ago we cautioned about the ballooning corporate debt. Now with the virus, corporations are going on a debt issuance binge. Debt issuance is up 92% year over year. The Federal Reserve is only adding juice to the “juice bowl” by buying corporate debt for the first time ever. Excessive debt levels can […]
Corporate Debt Looms Large
Corporations have had the wind at their backs with low interest rates. This lead to record levels of corporate debt issuance, which has surpassed 45% of GDP. There are now over $4trillion in corp. bonds due over the next 5 years. Companies will be forced to refinance at high rates or sell stock, which could […]
Ballooning Corporate Debt
Corporations have increased debt loads over the past few years because of the Federal Reserve’s ultra easy monetary policy. Now with rates going up, stress is starting to show up in the corporate bond market. With over $4.4 trillion in corporate bonds coming due by the end of 2022, higher interest rates means higher costs. […]