Strong U.S. Debt Sales Push Maturity Wall to 2017, Moody’s Says

Strong U.S. loan and bond sales pushed out the maturity on the biggest amount of corporate debt for the neediest borrowers to 2017, according to Moody’s Investors Service.

About $645 billion of junk-rated debt will mature during the next five years, excluding financial companies, with a peak $258 billion of bonds and loans coming due in 2017, Moody’s said yesterday in a report. A year ago, the so-called maturity wall was expected to peak at $246 billion in 2016, the credit-rating company said.

Issuers may refinance as much as $243 billion of junk-rated loans in the next three years, according to the report. High- yield, high-risk debt has a ranking of less than Baa3 by Moody’s and below BBB- at Standard & Poor’s.

While Moody’s expects corporate-debt issuance to remain robust, it said that global macroeconomic concerns, including debates over the U.S. debt ceiling and the three-year European debt crisis, could disrupt financing markets.

“A renewed flare-up in Europe’s sovereign debt crisis, along with higher capital requirements, could reduce European banks’ lending capacity,” Moody’s analysts led by New York- based Kevin Cassidy wrote in the report. “It is not certain that U.S. banks would have the capacity or risk appetite at reasonable prices to fill the void.”

To contact the reporter on this story: Christine Idzelis in New York at cidzelis@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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