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March 18, 2021 | $10.5 Trillion in Corporate Debt is Epic Opportunity in the Making

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel (www.venablepark.com) Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog: www.jugglingdynamite.com

It’s not just small businesses that have piled on debt during the pandemic; as explained below, publicly traded companies have issued record ‘IOUs’ to income-desperate buyers over the past year.  Corporate debt prices rise and then fall with equity markets and investor sentiment.  When selling waves hit, corporate bond prices fall as their investment yields (borrowing costs) leap.  The repricing and eventual investment opportunity, on the other side, promises to be larger than average this cycle.  But first, present holders are set up to suffer significant capital losses.

U.S. companies now face the highest levels of debt on record — more than $10.5 trillion, according to the Federal Reserve and the Securities Industry and Financial Markets Association, or SIFMA. The coronavirus pandemic is only part of the story. Here is a direct video link.

 

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March 18th, 2021

Posted In: Juggling Dynamite

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