Companies have a 10 trillion dollar bill that is coming due

Companies have a 10 trillion dollar bill that is coming due: "The amount of investment-grade debt rated BBB has climbed to 44 percent of issuance, according to David Rosenberg, chief economist and strategist at Gluskin Sheff. That classification is the second-lowest rating for investment-grade debt; that level compares to 10 percent about 40 years ago, Rosenberg said.

"Credit quality is becoming an issue after the last few years of debt issuance used to fund share buybacks, dividend payouts and M&A activity," Rosenberg said in a note earlier this week.

"The question is whether the 50-plus companies that Moody's downgraded to 'junk' status in the first quarter was just the thin edge of the wedge," he added. "The remainder that are a mere notch away have a combined debt load of $294 billion — which would just flood the high-yield marketplace."
Of the total $10.3 trillion coming due, 26 percent is speculative grade, or junk.

One of the problems from the corporate debt perspective is that most of the $1.9 trillion or so of corporate cash floating around is held by only the biggest companies. Overall, U.S. companies are holding the lowest level of cash to debt in a decade.

In an earlier report, S&P projected that corporate debt issuance would balloon to $75 trillion by 2020. The agency warned of a possible "Crexit" should conditions tighten and bond market liquidity evaporate"



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