Strong U.S. loan and bond sales pushed out the maturity on the biggest amount of corporate debt for the neediest borrowers to 2017, according to Moody’s Investors Service.
About $645 billion of junk-rated debt will mature during the next five years, excluding financial companies, with a peak $258 billion of bonds and loans coming due in 2017, Moody’s said yesterday in a report. A year ago, the so-called maturity wall was expected to peak at $246 billion in 2016, the credit-rating company said.
Issuers may refinance as much as $243 billion of junk-rated loans in the next three years, according to the report. High-yield, high-risk debt has a ranking of less than Baa3 by Moody’s and below BBB- at Standard & Poor’s.
While Moody’s expects corporate-debt issuance to remain robust, it said that global macroeconomic concerns, including debates over the U.S. debt ceiling and the three-year European debt crisis, could disrupt financing markets.
“A renewed flare-up in Europe’s sovereign debt crisis, along with higher capital requirements, could reduce European banks’ lending capacity,” Moody’s analysts led by New York- based Kevin Cassidy wrote in the report. “It is not certain that U.S. banks would have the capacity or risk appetite at reasonable prices to fill the void.”