Financing conditions were highly supportive for new issuance in 2024. Borrowers both made strides addressing near-term maturities and chipped away at those further out. In the leveraged finance market, refinancings and amend-to-extend transactions in 2024 helped reduce speculative-grade maturities for each year through 2028.

But issuers are facing maturities of considerable amounts of debt that they issued during COVID-19. While issuers have already largely addressed the obligations due in 2025, annual maturities of bonds, notes, loans, and revolvers rated by S&P Global Ratings rise sharply to $2.78 trillion in 2028. Speculative-grade debt (rated 'BB+' or lower) constitutes a growing share of the annual maturities, from just 12% of 2025 maturities to 40% in 2028.

Funding costs started to decline last year following interest rate cuts by several central banks. But for borrowers with fixed-rate debt, the yields on upcoming maturing bonds remain lower, on average, than recent new-issue yields, which means their funding costs stand to rise if refinanced at current rates. Meanwhile, borrowers with floating-rate debt (which accounts for just over half of speculative-grade debt) have just started to see funding costs ease. Given the uncertain trajectory of inflation and interest rates, future cuts could fall short of recent expectations.

2024 Provided Borrowers With An Opportunity To Refinance

From Jan. 1, 2024, to Jan. 1, 2025, global corporate maturities (both investment- and speculative-grade) declined for the debt maturing in 2025 by 18% and in 2026 by 5.6% as borrowers have paid down or refinanced the debt (see chart 1). These refinancings have added incrementally to the obligations due in 2027 and 2028. But in the fourth quarter of 2024, borrowers also made progress reducing the debt maturing in 2027 and 2028.

The reduction in speculative-grade maturities was more pronounced than for investment-grade (in percentage terms) in the 12 months to Jan. 1, 2025, as speculative-grade borrowers refinanced debt to get ahead of upcoming maturities. Nonfinancial corporate speculative-grade maturities for 2025 came down by 51%, followed by reductions in the obligations for 2026-2028 (see chart 3).

Financial services borrowers, meanwhile, showed a more modest 14% reduction in 2025 maturities, followed by increases in the amount of debt coming due in subsequent years (see chart 4). These borrowers often have a greater portion of their debt in obligations such as medium-term notes that tend to get refinanced closer to maturity.

Over the three months to Jan. 1, 2025, companies (both financial and nonfinancial) further pushed back maturities to 2029 and beyond.

Speculative-grade-rated maturities as a percent of 2025 annual maturities declined to 12%. That ratio will reach 40% in 2028 as speculative-grade maturities increase rapidly to $1.11 trillion in 2028--4.4x higher than in 2025 ($251.9 billion).

Chart 1

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Chart 4

Supply Of Credit Was Ample In 2024, Even For Speculative-Grade Borrowers

Credit markets for leveraged finance, including speculative-grade bond, leveraged loan, and private credit, were wide open in 2024 for a variety of borrowers.

More highly leveraged borrowers, such as those rated speculative-grade, are sensitive to the financing conditions in the credit markets. For these borrowers, the supply of credit is not always available or affordable. In 2024, issuance volumes showed the ample supply of credit, even for lower-rated issuance.

Leveraged loan issuance more than doubled to $770 billion globally in 2024, and speculative-grade bond issuance rose by almost 75% to $488 billion. Together, this marked the highest leveraged finance issuance since 2021 and the second-highest volume in seven years. Not only did this volume exceed the upcoming year's maturities, but it also surpassed the amount of speculative-grade debt maturing in the peak year of 2028 (see chart 5).

Investment-grade bond issuance in 2024 reached its second-highest level in more than 10 years, surpassing $2.5 trillion globally. This volume of investment-grade issuance is well in excess of upcoming investment-grade bond maturities, which peak in 2026 at just under $2 trillion (see chart 6). This holds true for financial services well, with 2024 issuance that was higher than upcoming maturities (see chart 7).

In light of the recent strong issuance volumes in 2024, credit markets showed more than sufficient capacity to meet upcoming refinancing demands, supporting our view that near-term and medium-term maturities now appear more manageable. However, if financing conditions turn less favorable, then borrowers may feel the weight of upcoming obligations, particularly given the mounting annual debt obligations through 2028.

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Not only was the supply of credit up in 2024, but the cost of funding for many borrowers also started to come down with central bank rate cuts. However, taking into account the rapid increase in benchmark rates in 2022 and 2023, we expect most borrowers will face a notable increase in funding costs when refinancing fixed-rate debt (see charts 8-11).

For example, even though the median coupon at issuance for European corporate bonds declined in 2024, European issuers still are likely to face increases in their cost of funding for 'BBB' and 'BB' bonds that mature in the next few years. Fixed-rate European 'BBB' and 'BB' bonds maturing in 2025 and 2026 have median coupons of about 21.9% and 3.2%, respectively. If refinanced at recent new-issue yields, then we estimate that the funding costs of European 'BBB' bonds would go up by 175 basis points (bps), and 'BB' bonds up 194 bps. In the U.S., the comparable increase would be 171 bps for 'BBB' bonds and 186 bps for 'BB' bonds.

Furthermore, the easing in financing conditions for U.S. borrowers may have stalled. New-issue yields in the U.S. edged up in the fourth quarter, indicating the uncertain direction for funding costs in 2025 as investors face questions about inflation and monetary policy.

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Lower-Rated Borrowers Likely Face More Refinancing Risk Than Higher-Rated Borrowers

In light of easing financing conditions in 2024 and lower 2025 maturities, near-term refinancing risks seem manageable. We expect that investment-grade borrowers would be less likely to face refinancing pressure than speculative-grade borrowers, given the larger market and investor pool for investment-grade debt. Globally, about $5.3 trillion in rated debt is speculative-grade, and this is concentrated among nonfinancial corporates.

Within speculative-grade, the lower-rated borrowers (such as those rated 'B-' and below) tend to be more vulnerable to refinancing pressure. Demand for lower-rated debt can quickly dry up during periods of volatility or tightening financing conditions.

Less than $65 billion in 'B-' and below debt maturities remains in 2025 (see chart 12).

However, maturities of 'B-' and lower rated bonds and loans from nonfinancial corporates rise swiftly, reaching a peak of $360.4 billion in 2028. Loans and revolvers show the steepest increase. By sector, health care, telecommunications, and media and entertainment have the most 'B-' and below debt maturing this year. Together, these sectors account for almost 45% of 'B-' and below maturities through 2028. Nearly two-thirds of the 'B-' and below debt maturing through 2028 is from U.S. issuers, followed by 26% from European issuers.

The median price for a 'CCC'/'C' category bond maturing in 2025 is 94.4 (as of Jan. 1, 2025), up nearly a full point from July 1, 2024 (see chart 13). The recent price increase likely reflects investors' current constructive view on global credit. Although, idiosyncratic risk is more prominent at the lowest rating categories, and investor sentiment can change quickly.

For 'CCC' category bonds maturing further out than a year, prices tend to be much lower, given the uncertainty and credit risk of the instrument. 'CCC'/'C' category bonds maturing in 2026 show a median price of 88.1 on Jan. 1, 2025, and this price is also up nearly three points over the prior six months.

Despite the generally manageable outlook for near-term refinancing, 2025 is starting off with increased uncertainty marked by volatile long-term yields, reflecting investors' uncertainties about inflation and U.S. monetary policy. While interest rates are expected to fall further, neutral rates could be higher than before the previous hiking cycle.

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Chart 13

Surging Issuance Lifts Debt Totals

The par value of rated debt outstanding rose by 1.8% in full-year 2024--to $23.9 trillion as of Jan. 1, 2025 (see chart 14). This growth included a 4% increase in speculative-grade, which exceeded the 1% growth of investment-grade. The growth of total debt stemmed from the surge in issuance in 2024. Although, much of the new issuance was allocated to refinancing existing debt, and a strengthening U.S. dollar reduced the currency-converted value of debt denominated in other currencies.

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Table 1

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Table 2

Table 3

Regional Takeaways

U.S.: Even after substantial refinancing activity over the past year, U.S. speculative-grade maturities mount through 2028

• Total U.S. corporate debt rated by S&P Global Ratings stood at $12.37 trillion as of Jan. 1, 2025, about 48% ($5.9 trillion) of which will mature through 2029.
• U.S. nonfinancial corporate maturities peak in 2028 at $1.13 trillion (see chart 17), roughly in line with our findings from a year ago.
• Near-term maturities, however, have eased significantly: 2025 nonfinancial corporate maturities total $581.7 billion as of Jan. 1, 2025, 26.8% lower than a year earlier.
• In particular, speculative-grade debt due in 2025 decreased by more than 60% over the 12 months to Jan. 1, 2025.
• Media and entertainment is the nonfinancial sector with the highest maturities outstanding through 2029 (see table 4), and it has the highest share of speculative-grade-rated debt (at 72% through 2029). This indicates a particular vulnerability in this sector, notably amid less favorable economic and financing conditions.

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Table 4

Europe: Financial services and investment-grade represent a higher portion of upcoming maturities

• Total European corporate debt as of Jan. 1, 2025, amounts to $8.15 trillion, down slightly from three months ago, partly because of changing foreign exchange rates.
• Financial services account for around 48% of total European debt--higher than the 27% share in the U.S.
• European nonfinancial corporates have $2.3 trillion in debt set to come due through 2029.
• Over the past 12 months, the amount of speculative-grade debt coming due in 2025 has declined by 40%.
• Speculative-grade maturities dropped to 18% of the 2025 total and remains below one-third of nonfinancial maturities through 2027.
• Nonfinancial maturities peak in 2028 at $569.0 billion, half of which is speculative-grade (see chart 18).
• In Europe, the telecommunications sector is the nonfinancial sector with the largest amount of speculative-grade debt maturing through 2029, at $155.6 billion (see table 5).

Chart 18

Table 5

Emerging markets: Maturities peak in 2025 following modest refinancing activity

• Emerging markets' corporate annual maturities as of Jan. 1, 2025, will peak in 2025 at $79.3 billion (see chart 19). Financial services debt accounts for close to $35 billion of this (see table 5).
• Although this is only 6% below the 2025 maturities as of Jan. 1, 2024, speculative-grade emerging market corporate debt maturing in 2025 declined by 17%.
• Less than 20% of 2025 maturities are rated speculative-grade, but this share increases to 38% in 2028.
• By currency, about 83% of this emerging market debt maturing through 2028 is U.S. dollar denominated. However, this represents debt with a global currency rating, which may have a higher concentration of foreign-currency issuance.

Chart 19

Table 6

Data Approach

We estimated maturities and potential refunding needs of financial and nonfinancial corporate debt rated by S&P Global Ratings, aggregated by issue credit rating.

For each region, we included the rated debt instruments of all parent companies and their foreign subsidiaries. We counted the debt of all these companies regardless of the currency or market in which the debt was issued. We converted any non-U.S.-dollar-denominated debt to U.S. dollars based on the exchange rates on Jan. 1, 2025.

The issue types covered include loans, revolving credit facilities, bank notes, bonds, debentures, convertible bonds, covered bonds, intermediate notes, medium-term notes, index-linked notes, equipment pass-through certificates, and preferred stock. In the case of revolving credit facilities, the amount usually represents the original facility limit, not necessarily the amount that has been drawn. Debt amounts are tallied as the face value of outstanding rated debt instruments.

We excluded individual issues that are not currently rated at the instrument level, as well as instruments from issuers currently rated 'D' (default) or 'SD' (selective default). We expect the credit market will have already accommodated some of the debt remaining in this year, given normal data-reporting lags.

We also aggregated sector-specific data according to the subsector of the issuer. The financial sector is defined as all banks, brokers, insurance companies, asset managers, mortgage companies, and other financial institutions. We aggregated debt issued by financial arms of nonfinancial companies with the sector of the corporate parent. We excluded government-sponsored agencies such as Fannie Mae and Freddie Mac, project finance, and public finance issuers.

In this study, we've aggregated maturity data into the following regions: U.S., Europe, rest of world, and emerging markets. We define those regions as follows:

U.S.:  U.S., American Samoa (U.S.), Bermuda, Cayman Islands, Guam (U.S.), N. Mariana Islands (U.S.), Puerto Rico, and U.S. Virgin Islands.

Europe:  Andorra, Anguilla (U.K.), Austria, Belgium, British Virgin Islands, British Indian Ocean Territory, Channel Islands, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Falkland Islands (U.K.), Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Greenland, Guernsey, Holy See (Vatican City), Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mayotte (France), Monaco, Montserrat, Netherlands, Netherland Antilles, New Caledonia (France), Norway, Portugal, Reunion (France), San Marino, Sint Maarten (Dutch Part), Slovak Republic, Slovenia, Spain, St. Helena (U.K.), St. Pierre/Miquelon (France), Svalbard/Jan Mayer Islands (Norway), Sweden, Switzerland, U.K., and Wallis/Futuna Islands (France).

Rest of world:  Any country not included in either the U.S. or Europe.

Emerging markets (or EM-18):  Argentina, Brazil, Chile, China, Colombia, Hungary, India, Indonesia, Malaysia, Mexico, Peru, Philippines, Poland, Saudi Arabia, South Africa, Thailand, Vietnam, and Turkiye.