Well-structured balance sheet needed amid red-hot US corporate credit market

The past decade has been good for corporate bonds: interest rates have been kept low by a steady economic recovery , and inflation has been muted.

The environment for corporate bonds remains benign with abundant liquidity, but we are worried we may face a nasty credit squeeze in the US. While we don’t believe that market tops or bottoms can be forecast in advance, we can take the temperature of a market and determine if it is running hot or cold . In our view, there are many signs that the US corporate credit market is running extremely hot.

There has been enormous issuance of lower-rated credit, comprising both US corporate high-yield debt and leveraged loans , both now more than double pre-global financial crisis peaks. As some companies are well suited to leverage, the debt size may be a misleading measure in isolation. Businesses with long-life assets, stable revenues and wide cash operating margins — such as real estate companies — can typically handle gearing.

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

BUSINESS MAVERICK : China and the US: Xi and Trump miss their chance for meaningful trade reformsWhile Chinese President Xi Jinping appears to care only about maintaining political control, US President Donald Trump seems to care only about himself.
Source: dailymaverick - 🏆 3. / 84 Read more »

Global stocks tumble as bond markets sound U.S. recession warning - SABC News - Breaking news, special reports, world, business, sport coverage of all South African current events. Africa's news leader.Investors ditched shares on Monday and fled to the safety of bonds while the Japanese yen hovered near a six-week high as risk assets fell out of favor on growing fears about a U.S. recession, sending global yields plunging. U.S. stocks futures fell, with E-minis for the S&P 500 skidding 0.5 percent. MSCI’s broadest index …
Source: SABC News Online - 🏆 32. / 51 Read more »

Stocks tumble as bond markets sound US recession warningRisk assets fell out of favour on growing fears about a US recession, sending global yields plunging.
Source: eNCA - 🏆 49. / 51 Read more »