DID YOU KNOW?
US corporate debt has swelled to nearly $10 trillion, according to data recently cited by The Washington Post. That comes out to roughly 47% of the overall economy, which is a record. Experts from the International Monetary Fund to the trillion-dollar asset manager BlackRock have warned of the risk posed by ballooning investment-grade debt. Since the 2008 financial crisis, companies have issued record levels of bonds to investors amid historically low-interest rates. The lowest bracket of the investment-grade debt, accounted for more than 50% of the market, compared with 17% in 2001. In an economic downturn, widespread downgrades of bonds to speculative-grade ratings could lead investors to sell the downgraded bonds rapidly, increasing market illiquidity and downward price pressures in a segment of the corporate bond market known already to exhibit relatively low liquidity. (Markets Insider)