Leverage Beckons as Punishment for Junk Status Loses Bite
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The way DigitalGlobe Inc. Chief Financial Officer Yancey Spruill sees it, credit investors are giving his company little reason to rush paying down debt that more than doubled after the satellite-imaging firm bought a competitor last year.
With the financial repression by central banks continuing for a sixth year, funding costs for speculative-grade borrowers such as DigitalGlobe are converging with those of higher-ranked issuers. That has left companies with the highest junk grade paying only 1.5 percentage points more, on average, than firms deemed investment-grade, about the slimmest margin since 2009 and down from a gap of 3 percentage points two years ago.