A recent study by Jonas Henderson, which included 900 major companies, showed that companies around the world will bear new debt burdens of up to one trillion dollars in 2020, which will cause a 12 percent jump in the total debt of companies globally to reach about 9.3 trillion dollars.
Last year, there was a sharp increase of eight percent, motivated by mergers and acquisitions and corporate borrowing deals to finance share repurchases and dividends.
The Companies knocked the bond markets to raise $384 billion in the January-May period, as estimates indicate that recent weeks have set a new record in debt issuance by companies with low credit ratings.
It should be noted that the rise in corporate debt began long before the outbreak of the Corona crisis, with the size of the net volume of global corporate debt doubling by 625 billion dollars last year, in what is the largest increase in five years. The phenomenon of corporate borrowing has gained wide momentum during the past years, supported by low interest rates and availability of credit through monetary stimulus packages adopted by the major central banks around the world.
Source (CNBC Arabia, Edited)
