KBRA Releases Webinar Transcript – Is Corporate America Over-Levered? A Mid-Crisis Perspective

Kroll Bond Rating Agency (KBRA) recently presented a webinar on the topic of rising corporate debt in the United States, and the threat it represents to economic growth. The event was hosted by KBRA’s Senior Managing Director and Chief Strategist, Van Hesser, and featured contributions and discussion from Dr. Edward Altman, Max L. Heine Professor of Finance Emeritus at New York University, Stern School of Business and Director of the Credit and Fixed Income Research Program at the NYU Salomon Center, and Dr. Harry Mamaysky, Professor of Professional Practice at Columbia Business School and Director of the School’s Program for Financial Studies.

Corporate leverage as measured by debt to GDP has risen in the U.S. to an all-time high, driven by ultra-low interest rates resulting from global quantitative easing post-global financial crisis and continuing through the pandemic. The discussion revealed that the issue is far more complex than a simple ratio, when you factor in firms’ ability to service the debt, financialization of the economy, and byproducts of the policy, most notably the creation of so-called “zombie” companies. Is the rise in debt to GDP a bubble that will hamper the recovery or is this more manageable than the headlines suggest? We invite you to decide.

To view the transcript, click here.

About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe is located at 6-8 College Green, Dublin 2, Ireland.

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