Corporate Debt Is Not Too High

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"Corporate Debt Is Not Too High"

"Nonfinancial corporate debt has risen to an all-time high as a share of US GDP. How much of a threat does this pose to creditors and the sustainability of the expansion? Goldman Sachs Research sees several reasons to not be too concerned. \r\nCorporate debt remains below the 2001 peak as a share of corporate cash flows and has declined since the mid-90s as a share of corporate assets. Lower interest rates and more stable corporate cash flows have reduced the cost of debt, and the structure of corporate debt has shifted toward longer maturities. Refinancing risk has declined as corporate bond yields have become less volatile. And the corporate sector runs a financial surplus, an unusually healthy position this deep into a business cycle expansion. \r\n"

Nonfinancial corporate debt has risen to an all-time high as a share of US GDP. How much of a threat does this pose to creditors and the sustainability of the expansion? Goldman Sachs Research sees several reasons to not be too concerned. 
Corporate debt remains below the 2001 peak as a share of corporate cash flows and has declined since the mid-90s as a share of corporate assets. Lower interest rates and more stable corporate cash flows have reduced the cost of debt, and the structure of corporate debt has shifted toward longer maturities. Refinancing risk has declined as corporate bond yields have become less volatile. And the corporate sector runs a financial surplus, an unusually healthy position this deep into a business cycle expansion.

"US Economics Analyst"

US Economics Analyst

"Jan Hatzius  \r\n Chief Economist, Global Investment Research, Goldman Sachs\r\nAlec Phillips \r\n Chief US Political Economist, Global Investment Research, Goldman Sachs\r\nDavid Mericle \r\nSenior US Economist, Global Investment Research, Goldman Sachs\r\nSpencer Hill \r\nVice President, Global Investment Research, Goldman Sachs\r\nDaan Struyven \r\nVice President, Global Investment Research, Goldman Sachs\r\nDavid Choi \r\nAssociate, Global Investment Research, Goldman Sachs\r\nBlake Taylor \r\nAnalyst, Global Investment Research, Goldman Sachs\r\nRonnie Walker \r\nAnalyst, Global Investment Research, Goldman Sachs\r\n"

Jan Hatzius  
 Chief Economist, Global Investment Research, Goldman Sachs
Alec Phillips 
 Chief US Political Economist, Global Investment Research, Goldman Sachs
David Mericle 
Senior US Economist, Global Investment Research, Goldman Sachs
Spencer Hill 
Vice President, Global Investment Research, Goldman Sachs
Daan Struyven 
Vice President, Global Investment Research, Goldman Sachs
David Choi 
Associate, Global Investment Research, Goldman Sachs
Blake Taylor 
Analyst, Global Investment Research, Goldman Sachs
Ronnie Walker 
Analyst, Global Investment Research, Goldman Sachs

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