Is a ‘Crexit’ Next? Global Company Debt Will Swell to $75 Trillion Through 2020

China’s opaque corporate sector and U.S. leveraged finance are particularly risky, says S&P

by Rachel Koning Beals
Market Watch

As companies drink at the open spigot of cheap borrowing from global central banks, company debt the world over will likely swell to $75 trillion by 2020, up from its current $51 trillion.

That’s a top-heavy accumulation that leaves S&P Global Ratings analysts introducing a new risk with a familiar nickname — a “crexit” could rattle credit markets, they said Wednesday.

Central banks may be trying to reinflate their economies, but they’re doing so to the detriment of credit quality, the S&P Global Ratings team said in a report.

“Central banks remain in thrall to the idea that credit-fueled growth is healthy for the global economy,” S&P analysts said.

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