Corporate leverage is set to gain more importance aided by Federal Reserve tapering, mutual fund flows, and stretched credit ratings, according to a report from Citi Research.
Jason Shoup and his team at Citi say corporate leverage is in the crosshairs and ultimately it’s going to impact valuations.
Top American corporates’ leverage back to recession levels
Citi analysts point out in just five years, the most credit-worthy American corporates’ leverage have reached the level last seen at the depth of the Great Financial Recession.
Jason Shoup and team point out that in 2009, investment-grade leverage climbed by roughly 0.5 turns to 2.3 times, largely due to a broad-based decline in revenue /EBITDA. However, the analysts feel...
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