Tighter Lending Conditions Push Debt Financing Out of Unsecured Bonds

According to the Wall Street Journal (WSJ), corporate debt financing in below BBB-grade is moving away from unsecured bonds and into secured bonds, which accounted for 62% of recent issuance. These bonds also show shorter maturities—6.1 years on average where 7.4 was the average for the last 10 years. Many companies took advantage of refinancing in 2020-2021 so that, in the aggregate, few speculative-grade bonds face maturities before 2025. The demand for these bonds has fallen as issuance in collateralized loan obligations (CLOs) has declined. Read More