U.S. Consumer vs. Corporate Debt

U.S. Consumer vs. Corporate Debt This chart puts interest rates on non-prime consumer credit accounts into perspective vs. CCC corporate bonds. Picture source: Goldman Sachs Global Investment Research

Leveraged loans pose risks as corporate debt increases

Leveraged loans pose risks as corporate debt increases A leveraged loan is debt issued by a company that has below investment grade credit ratings and a considerable amount of debt with high interest rates. In this video, Brian Cheung of Yahoo Finance, explains why leveraged loans pose risks as corporate debt increases.

U.S. Debt Ratios to GDP (Household, Corporate, Government)

U.S. Debt Ratios to GDP (Household, Corporate, Government) U.S. households remain far less in debt than during the Great Recession, but U.S. corporate debt continues to rise rapidly and has exceeded record levels . Picture source: Pictet Wealth Management

The U.S. Corporate Bond Debt Rated ‘BBB’ Exceeds $3 trillion

The U.S. Corporate Bond Debt Rated ‘BBB’ Exceeds $3 trillion The U.S. corporate bond debt rated ‘BBB’ exceeds $3 trillion. That’s 53% of investment-grade bonds in the United States. Keep in mind that any drop in the credit ratings could amplify the next recession: many investment grade investors own BBB-rated bonds, but are not allowed…

Total Negative Yielding Corporate Bonds Outstanding

Total Negative Yielding Corporate Bonds Outstanding Negative-yielding corporate debt passed $1 trillion in market value. Investors face significant risk should rates start to rise. Picture source: Bianco Research

Corporate Leverage in the U.S.

Corporate Leverage in the U.S. U.S. corporate debt is high. This chart shows that U.S. corporate leverage is close to its previous peak on a net debt to EBITDA. You may also like “U.S. Leveraged Loan Index Rating Breakdown: 2008 vs. 2019.” Picture source: Credit Suisse Research

Value of U.S. Corporate Bonds by Rating

Value of U.S. Corporate Bonds by Rating Since the Great Recession, the U.S. corporate bond debt rated ‘BBB’ exceeds $3 trillion. If the U.S. economy goes wrong, this is bad news for investors. Picture source: The Wall Street Journal

BBB Debt by Sector in the U.S.

BBB Debt by Sector in the U.S. By sector in the U.S., financial institutions have the largest amount of ‘BBB’ debt: $744 billion. That’s 53% of investment-grade bonds in the United States. You may also like “The U.S. Corporate Bond Debt Rated ‘BBB’ Exceeds $3 trillion.”  Picture source: S&P Global Fixed Income Research

U.S. Debt to Nominal GDP Ratios from 1975 to 2019

U.S. Debt to Nominal GDP Ratios from 1975 to 2019 Government debt: 97.2% of Nominal GDPHousehold debt: 76.4% of Nominal GDPNon-financial corporate debt: 73.9% of Nominal GDP You may also like “Is U.S. Household Debt a Problem?“ Picture source: J.P. Morgan Asset Management “Guide to the Markets” for Q2 2019

U.S. Corporate Stock Buybacks Are Booming Since 2010!

U.S. Corporate Stock Buybacks Are Booming Since 2010! Thanks to tax cuts and low interest rates. What would happen if companies reinvested instead of buying their own shares? Unfortunately, artificially low interest rates are associated with unnecessary debt. See how corporate debt-to-GDP has increased since the Great Recession.