S&P: Beware the $46trn 'perfect storm' in corporate credit

Standard & Poor's has said a ‘perfect storm' may be brewing in corporate credit markets if a global economic downturn combines with credit rationing to thwart corporations' $46trn refinancing needs.

A report from the ratings agency estimates the funding needs of non-financial corporates to be between $43trn and $46trn over the next five years, of which $30trn is existing debt and $13trn-16trn is new money required to spur growth. But the eurozone crisis and a limited US recovery, coupled with the prospect of a slowdown in China, may add to problems caused by a limited supply of credit from traditional institutions, S&P said. "This global wall of nonfinancial corporate debt will potentially compound the credit rationing that may occur as banks seek to restructure their balance she...