US junk-rated firms refinanced US$270 billion debt in 2024, JPMorgan says

US HIGH-YIELD rated corporate debt borrowers have refinanced almost US$270 billion in bonds and loans this year and are on pace to beat 2023’s US$334 billion, according to a new report from JPMorgan.

Refinancing volumes are already ahead of a 15-year low of US$132 billion in 2022, but behind the record US$512 billion refinanced in 2021.

Leveraged loans have made up the majority of refinancings so far this year at US$167 billion, while US$102 billion in high-yield bonds have been refinanced, according to the report.

High-yield primary activity in the US has been strong in 2024, as borrowers seize on tight spreads and investors seek attractive yields in the asset class.

US high-yield bond spreads were at 338 basis points on Wednesday, which are 40 bps lower year-to-date and only two bps above their low after the 2008 financial crisis, JPMorgan noted.

Effective yields on high-yield bonds were last at 7.7 per cent on Wednesday, according to the ICE BofA US High Yield Index. REUTERS