US Companies Opting to Refinance 2024 Debt Face Profit Hit as Higher Rates Bite
- Kinder Morgan, others, lack cash to repay 2024 debts: analysis
- Higher interest expense set to reduce average EPS by $0.11
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Some of the largest US companies face billions of dollars in additional interest costs and hits to their profit if they refinance their 2024 maturities at current rates, with a third of them lacking the cash to repay upcoming debt.
Non-financial companies in the S&P 500 have a combined $107.7 billion in debt coming due next year, with an average interest rate of 2.8%, according to a Calcbench analysis seen first by Bloomberg News. Refinancing at 5.44% – the rate of the one-year Treasury bill in early November – would add another $3.09 billion in collective interest expense, the financial research firm said in its analysis. Calcbench focuses on debt disclosures and analysis of financial statements.