Corporations Have a Debt Ceiling Too

Josh Kosman at the New York Post reminds us that the US Treasury’s debt ceiling isn’t the only one we’re about to hit our heads on…

Uncle Sam isn’t the only one who has maxed out on debt.

After issuing billions in junk bonds and loans, corporate America is also approaching its borrowing limit and will have trouble rolling over much of its riskier debt when the bill comes due in a couple of years, experts said.

An analysis reveals firms will have to refinance an eye-popping $1.2 trillion in the high-risk debt that allows companies with weak credit to stay afloat in 2012-17, according to MB Global Partners, a firm that specializes in distressed debt.

The analysis suggests that many firms will hit their debt ceiling starting in 2014, when a whopping $247 billion will need to be refinanced. They’ll face similar daunting bills in 2015 ($217 billion), 2016 ($266 billion) and 2017 ($243 billion).

One of the few economic successes from all the quantitative easing and endless-zero interest rates has been the fact that the debt markets were not only unfrozen, they’ve become a thriving engine for capitalization and recapitalization.  The main reason we’ve been able to get on with our lives post-Lehman has been the rejuvenated credit markets, not the rebound in stocks.

The eventual need to roll corporate junk bonds is not even on my top five list of things to be worried about at this point, but it’s probably in my top ten.


Debt’s Dark Angel (NYP)

Tags: $LQD, $HYG

Tags: ,

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. bitcoin loophole review commented on Sep 13

    … [Trackback]

    […] Find More to that Topic: […]

  2. immediate edge review 2020 commented on Sep 22

    … [Trackback]

    […] There you will find 36016 additional Info to that Topic: […]

  3. bitcoin era online commented on Sep 25

    … [Trackback]

    […] Read More Information here to that Topic: […]

  4. is blazing trader a scam? commented on Sep 27

    … [Trackback]

    […] Find More Info here to that Topic: […]

  5. 홀덤사이트 commented on Oct 07

    … [Trackback]

    […] Read More Information here on that Topic: […]

  6. 안전공원 commented on Oct 19

    … [Trackback]

    […] Read More on that Topic: […]

  7. td canada trust login commented on Nov 22

    … [Trackback]

    […] Find More on to that Topic: […]

  8. Quality Equation commented on Nov 24

    … [Trackback]

    […] Find More Information here to that Topic: […]

  9. diamond painting kits commented on Dec 17

    … [Trackback]

    […] Information to that Topic: […]

  10. 메이저토토사이트 commented on Dec 28

    … [Trackback]

    […] Information to that Topic: […]

  11. zegarek diesel replika commented on Jan 14

    … [Trackback]

    […] There you will find 74194 additional Information on that Topic: […]

  12. DevOps Strategies commented on Jan 15

    … [Trackback]

    […] Read More Info here on that Topic: […]