Corporate Tax Rate Changes Might Result In Company DeleveragingRupert Hargreaves
Since the financial crisis, the total value of debt owed and issued by US corporations has ballooned. Bingeing on low-interest rates, companies have borrowed heavily to finance acquisitions, buybacks, and dividends with few, if any repercussions.
US corporate debt issuance surpassed $1 trillion for the third year running in 2017. Gross issuance of investment grade debt rose from $792 billion in 2016 to just under $850 billion for 2018. Meanwhile, gross issuance of high yield debt lept 17% from $227 billion to $266 billion.