U.S. | Corporate debt in the twilight of the credit cycle
Published on Tuesday, November 13, 2018 | Updated on Tuesday, November 13, 2018
U.S. | Corporate debt in the twilight of the credit cycle
Nonfinancial corporate debt-to-GDP is high, but debt-to-assets and debt-to-earnings remain moderate. Solid earnings, tax cuts and low real interest rates allow corporations to service their debt without problems. However, tighter financial conditions, a slowdown in profit growth and higher risk aversion will lead to higher debt distress and deterioration in credit quality.