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In This List

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The 2020 Maturity Wall: $4.1T of Debt to Mature. And 1/3 of that is High Yield

bond debt wall

It might be a steep climb to 2020 for some U.S. corporate debt issuers.

There is more than $4.1 trillion of U.S. corporate debt slated to mature between now and then, according to S&P. In 2020 alone $1.05 trillion comes due.

Of note, speculative grade issues comprise 32% of the maturing debt. High yield issuers, of course, have commanded the spotlight lately, often by deciding to skip interest payments on notes (three U.S. oil and gas companies defaulted in the past week, all of them high yield issuers: Paragon Offshore, Energy XXI, and Venoco).

Companies that have issued in the high yield market could face challenges going forward, according to S&P.

“We expect investment-grade debt maturities (rated ‘BBB-‘ and higher) to be manageable, given the strong demand for high quality credit, but continued market volatility and investor risk aversion could lead to refinancing challenges for speculative-grade credit (‘BB+’ and lower),” says S&P. 

Issuers with low speculative-grade ratings of ‘B-‘ or lower could find current market conditions difficult. By sector, we believe the commodity-exposed sectors of oil and gas and metals, mining, and steel likely will face continued challenges as volatile commodity prices contribute to elevated negative biases …” – Tim Cross

The full report is available here ($).

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