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How scary is corporate debt right now?

Started by 30yrs_RE_20_in_REO
over 6 years ago
Posts: 9876
Member since: Mar 2009
Discussion about
https://www.barrons.com/articles/debt-be-not-proud-danger-in-the-complacency-about-corporate-credit-51550248974?mod=hp_INTERESTS_options&refsec=options The Corporate Debt Bubble Is Getting Bigger $1.3 trillion in leveraged loans $1.2 trillion in junk bonds $3 trillion of investment grade corporate debt just one notch above junk of which $780 billion coming due this year. The total amount of corporate debt has surpassed $9 trillion and equals more than 45% of annual U.S. GDP.
Response by 300_mercer
over 6 years ago
Posts: 10539
Member since: Feb 2007

Do not have access to the article but I can guess the content.

And the spreads are very narrow and covenants light if they exist. So definitely a bubble before you look at low absolute level of rates which makes it easier for corporations to make payments and roll. When the economy turns, there will be a lot of pain despite low rates.

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Response by Anton
over 6 years ago
Posts: 507
Member since: May 2019

corporate debt is not scary at all, but the next QE would be

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Response by 30yrs_RE_20_in_REO
over 6 years ago
Posts: 9876
Member since: Mar 2009

https://www.bloomberg.com/news/articles/2019-05-21/qe-may-be-over-but-the-fed-s-u-s-debt-hoard-is-set-to-double

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Response by urbandigs
over 6 years ago
Posts: 3629
Member since: Jan 2006

Spreads to treasuries? Are they widening?

these crazy bubbles can go on for a loooong time when markets are as engineered as they are.

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