The indebtedness of the world’s biggest companies is increasing and has reached a new record, but the rise in interest rates will make them more reluctant to borrow, according to Janus Henderson’s annual report published on Wednesday. The indebtedness of the panel of 933 companies at the global level, (all sectors excluding financial and real estate), amounted to 7802 billion dollars as of June 1, 2023, specified the asset manager, i.e. the highest level since the first edition in 2014. This is an increase of 6.2% at constant exchange rates compared to a year ago.
Companies in the telecommunications sector remain the most indebted, including Verizon (1st, 172 billion dollars), At
Conversely, the colossal profits of the oil companies have enabled them to reduce their debt to the lowest level in nearly 10 years. The asset manager expects this stock of debt to decrease in the coming months. “Rising borrowing costs and slowing economic activity should encourage companies to seek to pay down some of their debt,” said Janus Henderson.
But so far the rise in rates, prompted by central banks to reduce inflation, has had only a limited impact on large companies, with interest cost increases limited to 5.3% at constant exchange rate: companies in fact borrow on the bond market at fixed rates, which protects them until they have to refinance their debt.
