Susan Lund, partner at McKinsey Global Institute, and Nathan Sheets, chief economist at PGIM Fixed Income, joined Bloomberg to examine the latest McKinsey report on how global corporate debt is growing at an alarming rate.
Related: Euro-Zone Bond Yields Likely to Rise
Points discussed:
- Government debt still represents the largest portion of debt, but corporate debt is growing
- All countries across the globe have contributed to the overall debt, but China stands out the most
- China’s corporate bonk market went from almost nothing 10 years ago to $2 trillion — up 163 percent relative to GDP
- Domestic indebtedness is the top issue to address for China in terms of public policymaking and having huge implications for sustainable growth
- Part of the growth in the debt market is due to banks restructuring and adapting to new regulations in the last 10 years
- Non-financial corporate issuance is strong in BBB credit quality–more companies with weaker credit ratings are borrowing more money
To watch the full interview, click below:
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