Corporate Debt
Developments
| Date | Total Corporate Debt[1] | ||||
|---|---|---|---|---|---|
| Billions | Q/Q Level Change | Q/Q % | Q/Q Ann % | Y/Y % | |
| 2024-01-01 | 13,751.3 | 164.5 | 1.21 | 4.93 | 1.85 |
| 2023-10-01 | 13,586.8 | -6.1 | -0.04 | -0.18 | 1.85 |
| 2023-07-01 | 13,592.9 | 39.5 | 0.29 | 1.17 | 1.78 |
| 2023-04-01 | 13,553.3 | 52.1 | 0.39 | 1.55 | 2.45 |
| 2023-01-01 | 13,501.2 | 161.7 | 1.21 | 4.94 | 4.00 |
| 2022-10-01 | 13,339.5 | -15.4 | -0.12 | -0.46 | 5.58 |
| 2022-07-01 | 13,355.0 | 125.4 | 0.95 | 3.85 | 7.25 |
| 2022-04-01 | 13,229.6 | 247.2 | 1.90 | 7.84 | 7.67 |
| 2022-01-01 | 12,982.4 | 348.2 | 2.76 | 11.49 | 7.90 |
| 2021-10-01 | 12,634.1 | 181.7 | 1.46 | 5.97 | 6.14 |
| 2021-07-01 | 12,452.4 | 165.1 | 1.34 | 5.48 | 4.02 |
| 2021-04-01 | 12,287.3 | 255.7 | 2.13 | 8.78 | 1.70 |
| 2021-01-01 | 12,031.6 | 128.6 | 1.08 | 4.39 | 3.60 |
| 2020-10-01 | 11,903.1 | -68.0 | -0.57 | -2.25 | 9.53 |
| 2020-07-01 | 11,971.1 | -110.8 | -0.92 | -3.62 | 10.66 |
| 2020-04-01 | 12,081.9 | 468.1 | 4.03 | 17.12 | 13.77 |
| 2020-01-01 | 11,613.8 | 746.6 | 6.87 | 30.45 | 10.62 |
| 2019-10-01 | 10,867.2 | 49.2 | 0.45 | 1.83 | 5.68 |
| 2019-07-01 | 10,818.0 | 198.6 | 1.87 | 7.69 | 6.29 |
Credit Spreads
| Date[2] | High Yield Credit Spread | |||
|---|---|---|---|---|
| Percent | Q/Q % | Q/Q Ann % | Y/Y % | |
| 2024-04-01 | 3.21 | 1.90 | 7.84 | -20.74 |
| 2024-01-01 | 3.15 | -7.08 | -25.45 | -31.22 |
| 2023-10-01 | 3.39 | -15.88 | -49.93 | -29.52 |
| 2023-07-01 | 4.03 | -0.49 | -1.96 | -25.78 |
| 2023-04-01 | 4.05 | -11.57 | -38.86 | -31.01 |
| 2023-01-01 | 4.58 | -4.78 | -17.80 | 33.53 |
| 2022-10-01 | 4.81 | -11.42 | -38.43 | 55.16 |
| 2022-07-01 | 5.43 | -7.50 | -26.78 | 72.38 |
| 2022-04-01 | 5.87 | 71.14 | 757.78 | 93.09 |
| 2022-01-01 | 3.43 | 10.65 | 49.88 | 2.08 |
| 2021-10-01 | 3.10 | -1.59 | -6.20 | -19.69 |
| 2021-07-01 | 3.15 | 3.62 | 15.28 | -41.77 |
| 2021-04-01 | 3.04 | -9.52 | -32.99 | -52.80 |
| 2021-01-01 | 3.36 | -12.95 | -42.59 | -61.69 |
| 2020-10-01 | 3.86 | -28.65 | -74.08 | 7.22 |
| 2020-07-01 | 5.41 | -15.99 | -50.20 | 34.58 |
| 2020-04-01 | 6.44 | -26.57 | -70.92 | 58.23 |
| 2020-01-01 | 8.77 | 143.61 | 3421.99 | 116.54 |
| 2019-10-01 | 3.60 | -10.45 | -35.69 | -32.46 |
Maturities
Deutsche Bank AG, illustrates the average length of high-yield bonds in circulation in the US and Europe going back to 2002.
While imminent maturities in high yield markets are not as large as investment grade counterparts, the gap between the current coupon and index yield is wider, suggesting a bigger jump in interest costs when corporates have to issue debt at higher rates.
Health Profile
Fathom Consulting is a London research firm, that classifies all quoted US companies by their Altman Z-scores — a measure promulgated by the New York University professor Edward Altman to estimate how close they were to bankruptcy. It combines concepts such as account profitability, leverage, liquidity, solvency, and activity ratios.
In the last century, more than half of all public companies looked strong and healthy on Altman’s metric. That number has now dropped below 10% for the first time on record
This chart defines zombies loosely as companies whose earnings before interest and tax did not cover their interest costs for one year, and also on a stricter basis where this situation needs to have persisted for at least three consecutive years. By this standard, slightly more than a fifth of US companies are zombies:
In this chart from Bank of America, which gauges balance street strength with the simple measure of the cover they have to pay interest charges, we discover that the biggest 150 companies have barely ever been stronger on this metric. Smaller companies are dramatically weaker, and have seen a significant weakening over the last two years
