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US Corporates Face Severe 2024 Debt Refinancing Cliff - Calcbench

US Corporates Face Severe 2024 Debt Refinancing Cliff - Calcbench

(16 November 2023 – United States) Major US corporates face billions of dollars in extra interest expenses and depressed profitability if they refinance 2024 debt maturities at current rates, Calcbench reports. 

One in three major non-financial listed S&P500 companies with an aggregate US$108 billion in debt maturing in 2024 at an equivalent average interest rate of 2.8 percent lack the requisite cash to repay their upcoming debt obligations according to Calcbench. 

The impact of elevated financing costs is borne markedly differently by different enterprises across various sector verticals with two in three holding enough cash to pay down their 2024 debt. The balance didn’t hold enough cash by the end Q2 2023 to meet debt levels in 2024. 

Costco is considering repaying a US$1 billion bond maturing in 2024 with cash. “Refinancing at the current rates doesn’t make sense” stated Costco CFO Richard Galanti. 

“Depending on the nature of the company and the strength of its balance sheet, this is significant. We found numerous companies where higher interest expense was greater than available cash the companies had on hand, which implies that those companies must refinance or sell off assets to raise more cash. They can’t otherwise pay off the debt” commented Calcbench Founder and CEO, Pranav Ghai. 

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