Companies around the world will take on as much as 1 trillion U.S. dollars of new debt in 2020, as they try to shore up their finances against the coronavirus, a new study of 900 top firms has estimated, Report says, citing TASS.
The unprecedented increase will see total global corporate debt jump by 12 percent to around 9.3 trillion U.S. dollars, adding to years of accumulation that has left the world's most indebted firms owing as much as many medium-sized countries.
Last year also saw a sharp 8 percent rise, driven by mergers and acquisitions and by firms borrowing to fund share buybacks and dividends. But this year's jump will be for an entirely different reason – preservation as the virus saps profits.
“COVID has changed everything,” said Seth Meyer, a portfolio manager at Janus Henderson, the firm that compiled the analysis for a new corporate debt index. “Now it is about conserving capital and building a fortified balance sheet”.
Companies tapped bond markets for $384 billion between January and May, and Meyer estimates that recent weeks have set a new record for debt issuance from riskier “high yield” firms with lower credit ratings.
Lending markets had slammed shut for all but the most trusted firms in March, but have been opened up wide again by emergency corporate debt buying programs from central banks like the US Federal Reserve, the European Central Bank and Bank of Japan.
Pandemic to bring $1 trillion of new global corporate debt
Business
July 13, 2020
15:20
https://static.report.az/photo/9a996cec-f267-4474-a707-3855e8219244.jpg
Azerbaijani version
Dünyanın aparıcı şirkətlərinin borcları pandemiya səbəbindən 1 trilyon dollar artacaq
Latest news
00:08
President Ilham Aliyev: Activities of Baku Initiative Group are expanding year by yearForeign policy00:04
President: It is difficult to say how our relations with the European Commission will developForeign policy23:55
President of Azerbaijan: Armenia’s close friends are being shamefully removed from the political sceneForeign policy23:52
President Ilham Aliyev: We can elevate US-Azerbaijan relations to a strategic levelForeign policy23:28
President of Azerbaijan: Disgusting practice of colonialism must be brought to an endForeign policy23:26
President Ilham Aliyev: Azerbaijan's steps in recent years are being analyzed very seriouslyForeign policy22:58
President of Azerbaijan shares his views on developments in the Middle East during his interview with TV channelsForeign policy22:33
President: The act of terror act committed against our embassy was an organized terrorist actForeign policy22:26
President Ilham Aliyev touches on future relations with Iran in his interview with TV channelsForeign policy22:24
President: If there is a consensus in French political circles, it is a consensus only on AzerbaijanophobiaForeign policy