Wednesday , March 20 2019
Home / Constantin Gurdgiev: True Economics / 29/10/18: Corporate Credit and the Debt Powder Keg

29/10/18: Corporate Credit and the Debt Powder Keg

Summary:
As it says on the tin: despite growth in earnings, the numbers of U.S. companies that are struggling with interest payments on the gargantuan mountain of corporate debt they carry remains high. The chart does not show those companies with EBIT/interest cover ratio below 1 that are at risk (e.g. with the ratio closer to 0.9) for the short term impact of rising interest rates. That said, the overall percent of firms classified as risky is at the third highest since the peak of the GFC. And that is some doing, given a decade of extremely low cost of debt financing.Talking of a powder keg getting primed and fused…

Topics:
[email protected] (Constantin Gurdgiev) considers the following as important: , , , , , , ,

This could be interesting, too:

Lance Roberts writes Technically Speaking: A Different Way To Look At Market Cycles

Lance Roberts writes After Two Of The Greatest Bull Markets In U.S. History, Why Are Boomers So Broke?

Gregor Samsa writes Ten Plus Plus Great Weekend Reads – March 15

David Robertson writes Artificial Intelligence Or Real Stupidity?


As it says on the tin: despite growth in earnings, the numbers of U.S. companies that are struggling with interest payments on the gargantuan mountain of corporate debt they carry remains high. The chart does not show those companies with EBIT/interest cover ratio below 1 that are at risk (e.g. with the ratio closer to 0.9) for the short term impact of rising interest rates. That said, the overall percent of firms classified as risky is at the third highest since the peak of the GFC. And that is some doing, given a decade of extremely low cost of debt financing.

Talking of a powder keg getting primed and fused…

29/10/18: Corporate Credit and the Debt Powder Keg

Leave a Reply

Your email address will not be published. Required fields are marked *