One of the most comforting signs for buyers of the debt has been the prudent policies maintained by companies during much of the past six years. Treasurers hoarded cash and tightened spending, cutting the net debt to earnings ratio for companies in the Standard & Poor’s 500 index to the lowest in 24 years.

Some in the market are beginning to sound the alarm that companies have been letting their conservative policies slip as activist stock investors push them to boost share prices. The allure of record-low borrowing costs for even the lowest-rated issuers is encouraging them to pay for it by leveraging their balance sheets.

“There’s no reason for treasurers not to do buybacks or pay dividends at these rates,” Citigroup Inc. credit strategist Stephen Antczak said in a telephone interview.

Rising Activism

After the net debt of S&P 500 companies fell to 1.63 percent of an earnings measure in the three months ending Sept. 30, the lowest since at least 1991, it has climbed for two straight quarters to 1.68 percent, data compiled by Bloomberg show. It’s still about half of the 3.4 percent ratio at the end of 2008.

Much of the debt has gone to fund the more than $2.2 trillion of shares that Citigroup says companies globally have bought back since 2011. And Moody’s Investors Service said in a report last month that investment-grade companies are spending more of their cash on shareholder rewards than at any time since 2007.

One factor fueling this trend is the rise in shareholder activism. There have been 54 cases of activists targeting companies across 14 non-financial industries so far this year, up from 43 a year ago, according to a report this week from analysts at Moody’s. That’s “rarely good news for bond investors,” the analysts wrote.

The credit ratings of Monsanto Co., the world’s largest seed company, were cut two levels by Moody’s last year after it announced plans for $10 billion of share buybacks, which it planned to help fund by raising its leverage to 1.5 times its earnings. The plan would “significantly weaken” the company’s credit metrics, Moody’s said.

Monsanto Bonds

Monsanto has since sold $3.4 billion of bonds, including $800 million this week, at least in part to funds the buybacks.