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Is $1TR Corporate Bonds rolling over next year a problem?

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(Konstantin Fominykh) #1

corporate%20bonds
Some economists and strategists worry that the Corporate Debt market could cripple the economy.

Indeed, in the States alone, we do have about $1TR Corporate Bonds rolling over the year (see the chart).

However, upon closer inspection, there is nothing unusual to be concerned about, because:

  1. Roll-over schedules tend to be front-end loaded.
  2. Roll-over schedule for High Yield tend to be evenly distributed over the few upcoming years )(see the Chart #2). I.e. nothing big on the front end.
  3. Additionally, half of these corporate bonds (by value) are in Financials ($450B) (see chart #3) and banks tend to be on the other side - issuing bonds to match their duration books, when matching their Loans vs. Deposits.

    So, watch Credit thoroughly, not superficially, but so far things are fine. And stocks will keep climbing the proverbial wall of worry.
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