Source: Bloomberg
Author: Jeremy Hill, Lucca de Paoli
Richard Cooper's mobile phones are like early warning bells of the global economy, and this time is always rang.
Cooper is a partner of Cleary Gottlieb, a large -scale law firm engaged in corporate bankruptcy. It has provided services for decades when it has fallen into debt quagmires for global companies.Began to provide this service again.This year's bankruptcy speed has been second only to the beginning of the epidemic since 2008.
"This feeling is different from the previous cycle," Cooper said."There will be a lot of breach of contract."
Bloomberg's compilation data shows that the position where Cooper is located allowed him to have a premonition to land on the world for more than $ 500 billion at a dilemma corporate debt storm.This scale will grow in eighty -nine, and Wall Street is worried that economic growth will be dragged down, allowing the credit market for the largest decline in decades.
On the surface, this storm is no different from other bumps in capitalism. For example, the rise of science and technology development or remote office has affected some companies, and Hong Kong, London and San Francisco office buildings are vacant.
But if you investigate it carefully, the problem may be deeper, and it is also disturbing: the company raises debt when the company is very cheap. Now, as the central bank raises interest rateCome heavier.
According to the S & P data, US high -risk bonds and leverage loans were $ 3 trillion in 2021, more than doubled from 2008.During the same period, China's non -financial corporate debt has increased relative to economic scale.In Europe, the scale of trash bonds in 2021 increased by more than 40%.In the next few years, many of these securities will expire, and the global garbage bond market will usher in a peak of US $ 785 billion.
At present, China's and European economic growth has cool down, the Fed will continue to raise interest rates, and some companies will be difficult to withstand debt repayment.Data show that since 2021, bonds and loans that have been in trouble in the Americas have soared more than 360%. If it continues to spread, it may cause the first large -scale default cycle since the financial crisis.
This phenomenon has begun, and there are more than 120 large bankruptcy cases in the United States this year alone.Even so, the data shows that in the world's adverse levels of debt transactions at nearly 600 billion U.S. dollars in the world, the actual default ratio is less than 15%, which means that more than 500 billion US dollars of debt may not be redeemed, or at least it is difficult to repay.
Moody's said this week that the default rate of global speculative companies will reach 5.1%next year, and as of June, the 12 -month default rate will be 3.8%.In the most tragic context, the default rate may rise to 13.7%, exceeding the level during the credit crisis from 2008-2009.
Of course, there are still many uncertain factors.On the one hand, although interest rates have risen, the US economy has unexpectedly maintained toughness, and inflation continues to slow, and the Fed may guide the economy towards soft landing.Since the closure of Silicon Valley Bank in March, the spread of the US junk bond market has also narrowed.
However, even if the default rate rises slightly, it will challenge the economy.The more defaults, the higher the possibility of investors and banks withdrawing loans. There will be more companies with less financing channels to fall into trouble.Once the increasing bankruptcy of the enterprise will constitute a pressure on the labor market, employees are laid off, and consumer expenditure will respond to dragging.
