36-page PDF at https://www.mckinsey.com/~/media/mckins ... final.ashx
Key points:In the latest installment of a series of reports on global debt, Rising corporate debt: Peril or promise? (PDF–456KB), the McKinsey Global Institute looks at the growth in one corner of the global debt market: corporate debt. The total debt of nonfinancial corporations, including bonds and loans, has more than doubled over the past decade, growing by $37 trillion to reach $66 trillion in mid-2017, or 92 percent of global GDP. This growth is nearly equal to the increase in government debt, which has received far more attention. In a departure from the past, a large share of the growth in corporate debt has come from developing countries, and in particular China, which now has one of the highest ratios of corporate debt relative to GDP in the world.
- Global corporate bond markets have expanded, but risks are rising in the bull market
- Record refinancing over the next five years comes at a time when some companies and sectors may be vulnerable
- There is significant scope for further growth in corporate bond markets, but banks, investors, and policy makers need to be prepared to react to bumps in the road ahead
How do people feel about the "safety" of bonds?
Does this influence your perspective on global bonds? What about Emerging Market debt?
With decreasing returns and increasing risks, are bonds in any form even a good investment choice?
Are bonds and stocks both headed for a fall? Will we have that perfect storm of major market losses?
What, if anything, should we change in our asset allocations, return projections, inflation expectations, etc.?