Credit Markets Face $46 Trln Storm

S&P sees ‘global wall’ of refinancing, new issuance over next five years.

Funding needs of non-financial companies in the euro region, U.K., U.S., China and Japan will be $43 trillion to $46 trillion over the next five years, Standard & Poor’s said in a report.

This includes $30 trillion of debt that will need refinancing and $13 trillion to $16 trillion of new money needed to spur growth, the ratings company said.

“This global wall of non-financial corporate debt will potentially compound the credit rationing that may occur as banks seek to restructure their balance sheets, and bond and equity investors reassess their risk-return thresholds,” Jayan Dhru, senior managing director of global corporate ratings at S&P in New York, said in the report.

“Combined with the euro-zone crisis, the slow U.S. economic recovery and the prospect of a slowing economy in China, this raises the downside risk of a perfect storm in global corporate credit markets,” Dhru said.



Bloomberg News


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