Companies across the U.S. are barreling toward a refinancing cliff that could cost them billions in the new era of high interest rates, setting up a "slowly unfolding crisis." New research published by Baringa, a London-based consultancy, found that companies that refinance between this year and 2030 will pay an additional $381 billion in interest costs due to elevated borrowing rates.
The consequences of higher rates are "significant," according to Baringa. THE SILVER LINING OF HIGHER INTEREST RATES: SAVINGS ACCOUNT RATES Default rates are already on the rise. High-yield default rates climbed to 3.04% at the end of the first quarter, up from 2.94% at the end of 2023, according to Fitch Ratings. By comparison, in 2022, the default rate was just 1.3%. "We're already seeing default rates rise.