Global corporate debt to reach $75 trillion

Global corporate debt is expected reach $75 trillion (€68.1 trillion) by 2020, fuelling fears that a correction to credit markets is unavoidable. S&P Global Ratings, which has made the estimate, said the credit correction began in late 2015 and will likely spread through the next few years as defaults spike. With central banks around the world engaging in expansive monetary policy that has seen interest rates turn negative in Europe and Japan, investors on the hunt for yield are expected to push global corporate borrowing demand to $62 trillion. The firm also warns that if unexpected events such as Brexit continue, there could be a rapid departure of both lenders and lower quality borrowers from the market, which would have a severe impact on high yield bonds as an asset class. Paul Watters, who co-authored the S&P report, said that it may be difficult for monetary authorities to prevent financial market volatility infecting the real economy. This is because the tools that central banks have at their disposal have reached the limit of their effectiveness. In terms of regions, China looks set to have the greatest share of global corporate debt at 43% whereas Europe, including the Eurozone and the UK will see its share ease to 16% from 20% in the next five years. ©2016 funds europe

Sponsored Profiles

SPONSORED FEATURE: Investing for income

May 17, 2017

Portfolio Manager Thomas Kruse examines the findings from Pioneer Investments’ survey on income investing and outlines ways of achieving a target income.

SPONSORED ARTICLE: A radical solution to KYC concerns

May 17, 2017

The 1MDB affair shows that lax know-your-customer and due-diligence procedures are a major risk, says Paolo Brignardello, head of product management and marketing, Fundsquare. New solutions are...

SPONSORED FEATURE: AIFMD - What does Brexit mean?

Apr 18, 2017

An open discussion between funds industry experts and initiated by SGG Luxembourg took place in London to examine  the implications of Brexit for UK fund managers marketing to the EU.

SPONSORED FEATURE: Luxembourg fund reporting – CRS vs FATCA

Apr 18, 2017

Luxembourg funds need clear procedures for CRS compliance, writes Andrew Knight, Partner at M Partners, a member of the Maitland network of law firms.

Executive Interviews

INTERVIEW: Finding managers that can (and do)

Apr 18, 2017

Fabrice Kremer, a fund selector at Banque de Luxembourg Investments, has berated fundamental managers for failing to beat indices, but he remains committed to active funds. He speaks to Nick...

JERSEY INTERVIEW: ‘A steady sort of place’

Mar 21, 2017

The chief executive of Jersey Finance is keen to portray the island as a stable, trustworthy jurisdiction. He talks to George Mitton.



May 17, 2017

With such an intangible product, it can be hard for asset managers to communicate what they do. Having personality and connecting with customer aspirations may be the key, our branding roundtable hears.

ROUNDTABLE: The issue is perception

Mar 21, 2017

Our panel discuss tax transparency, the elegance of private placement and why Jersey could do more to promote itself. Chaired by Tom Cowsill in Saint Helier.