Corporations holding low-yield debt issued during the previous decade are encountering significantly higher borrowing costs as maturities approach. Capital structure adjustments are becoming mandatory across capital-intensive sectors.
Maturity Wall Pressures
Over $1.5 trillion in global corporate debt is scheduled to mature over the next 24 months. Refinancing at prevailing yields increases interest expenses by an average of 250 to 400 basis points, dampening net earnings expectations.
Shift Toward Private Credit
To avoid public market volatility, middle-market enterprises are increasingly turning to private debt funds. While private credit offers customized covenants, effective borrowing rates remain elevated, forcing companies to delay non-essential capital expenditures.