Record amounts of corporate debt due by 2025: Moody’s

This represents an increase of 34% ($31 billion) compared to January (data covering the period 2020-2024).

Speculative bond issuance has risen nearly 30% since January, Moody’s reported.

“Canadian speculative-grade debt maturities have reached $81 billion and now represent approximately two-thirds of total Canadian debt maturing in 2021-25,” said Paresh Chari, vice president and principal analyst at Moody’s. .

Investment-grade issuance has grown faster this year, Moody’s said, as companies refinance or “seek to bolster liquidity” due to the effects of the Covid-19 pandemic. As a result, investment-grade issuance increased by around 120% in the first seven months of 2020, compared to the same period in 2019.

At this point, the peak year for corporate maturities is 2025, when $47 billion comes due, Moody’s said.

In speculative-grade debt, only about $4 billion is due in 2021, followed by $8 billion in 2022. This rises to $18 billion in 2023, drops in 2024, and then peaks at about $36 billion in 2025.

Conversely, investment-grade bond maturities are spread fairly evenly over the next five years, with “a modest peak” in 2025, Moody’s said.

In terms of rollover risk, Moody’s noted that approximately 85% of Canada’s speculative-grade debt is expected to mature in 2023 and beyond “significantly [alleviates] short-term repayment risk.

The report also says that about a third of expiries are in commodity-based sectors (such as energy and mining), and a quarter in sectors with a negative outlook, including retail, airlines, energy and consumer services.

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