But this time around, there’s a wild card in the mix: Donald Trump’s tax overhaul.
The new legislation could impact firms’ financing decisions by leaving them with more cash, according to Erin Lyons, a senior credit strategist at CreditSights. The market may see slightly fewer companies issuing debt as a result, she said.
Additionally, so many firms have already borrowed at such low rates for so long, some won’t need to in the future as conditions change.
“At the margin, they’re probably not going to be as inclined to borrow as they have been in the past, with M&A being the exception,” Lyons said.
It’s also possible chief executives will return the tax savings to shareholders via dividends or stock buybacks, leaving them just as dependent on debt for financing operations.
“When that debt comes due, companies have to decide what to do,” Bory said.
This article was provided by Bloomberg News.