Corporate Debt Is Not Too High

10 JUN 2019

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

Corporate Debt Is Not Too High

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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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