Debts racked up by companies across the world reached a record $8.3trn in January this year and are expected to surge by a further $1trn in the wake of the Covid-19 pandemic, analysis suggests.
Borrowing from banks has also increased sharply, though precise figures are not yet available. Janus Henderson estimates net borrowings overall will jump by up to $1trn this year, an increase of 12%.
The report said more than half of the companies in the index took on more borrowing in 2019, but a "very large impact was made by relatively few of them". Just 25 companies between them borrowed an additional $410bn last year, equivalent to one-third of the increase in borrowings of all those companies that added to their debts.
Volkswagen was listed as the world's most indebted company with $192bn in net borrowing, which is just shy of the sovereign debt of South Africa or Hungary. However, the report pointed out this was inflated by its large car finance business.
A quarter of the companies in Janus Henderson's index have no debt at all, and some have vast cash reserves. Google's parent company Alphabet has $104bn, for example.
Janus Henderson corporate credit portfolio manager Tom Ross said: "As the economic cycle came to an abrupt end this year, companies faced the downturn with record borrowings. They have now scrambled to issue new bonds and borrow from banks to ensure they have enough ready cash to weather lockdowns of varying severity around the world.
"Some companies have taken emergency government support during the worst of the crisis when funding themselves commercially became very expensive for a time. With market conditions calmer, thanks to central-bank support and a gradual reopening of economies, companies will want to reduce their reliance on state hand-outs, so we expect bond issuance to rise further."
He added: "As the global recession takes hold, profits and cash flow will be sharply lower. Borrowing needs will be very large this year, even though companies in our index are set to cut their dividends by $140bn to $300bn this year, are slashing share buybacks, putting acquisitions on hold and reducing capital expenditure.
"Much will depend upon the extent to which new borrowing is spent or held as cash reserves, and on how much companies issue in new shares to bolster their balance sheets. It's clear, however, that 2020 will see net corporate debts soar to another new record, as much as $1trn higher than 2019."
Ross added that borrowing was not a bad thing as long as it was appropriate as it could increase shareholder returns.