US Debt Bubble

Corporate Tax Rate Changes Might Result In Company Deleveraging

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.

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