Corporate Debt Binge
comentada em 24/05/2020 09:54

According to a Forbes investigation, which analyzed 455 companies in the S&P 500 Index—excluding banks and cash-rich tech giants like Apple, Amazon, Google and Microsoft—on average, businesses in the index nearly tripled their net debt over the past decade, adding some $2.5 trillion in leverage to their balance sheets. 

"In the last two months alone no fewer than 392 companies have issued $617 billion in bonds and notes, piling on still more debt that they may not be able to pay back."
"Year after year, as the Federal Reserve pumped liquidity into the economy, some of the biggest firms in the United States—Coca-Cola, McDonald’s, AT&T, IBM, General Motors, Merck, FedEx, 3M and Exxon—have binged on low-interest debt. Most of them borrowed more than they needed, often returning it to shareholders in the form of buybacks and dividends. They also went on acquisition sprees. Their actions drove the S&P 500 index ever higher—by 13.5% on average annually from 2010 through 2019—and with it came increasingly rich pay packages for the CEOs leading the charge. The coup de grâce was President Trump’s 2017 tax cut, which added even more helium to this corporate-debt balloon."
Inside The $2.5 Trillion Debt Binge That Has Taken S&P 500 Titans Including Boeing And AT&T From Blue Chips To Near Junk