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The Long and Winding road

The US bond market has an advantage vs history: in this cycle, maturities have been extended thanks to #zirp and the ability to issue at very low yields. As you can see in the chart below, the typical maturity wall has morphed into maturity hurdles, relatively easy easy to manage. 54% of the current debt of companies in the S&P500 matures over the next 7 years, but no year concentrates more than 8% of the total. That may be a reason why the aggressive #ratehikes in this cycle haven’t had the typical slowdown effect on corporate america; their interest expense, although increasing, is having a softer effect on them at the expense of longer durations, which mostly affect investors such as banks, pension plans, etc. “Higher for longer” will be felt gradually on debt issuers, but it’s hurting investors now, with portfolios much more sensible to interest rates.


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