An avalanche is brewing in 2012 and beyond if companies don’t get out in front of this.
– Kevin Cassidy, Senior Credit Officer, Moody’s
The companies have nearly two years to push out the 2012 maturity wall.
– Martin Fridson, veteran high yield expert
Interesting front page NYT article yesterday on the avalanche of debt coming due in 2012 and after: “Corporate Debt Coming Due May Squeeze Credit”, Nelson Schwartz, The New York Times, March 16, A1.
From $21 billion in junk bond maturities in 2010, the number jumps to $155 billion in 2012, $212 billion in 2013 and $338 billion in 2014. That’s because many junk bonds were issued in 2005-2007 at 5 to 7 year maturities.
For example, HCA, which was taken private in an LBO by KKR and Bain in 2006, has $13.3 billion in debt coming due between 2012 and 2014. TXU, also taken private by KKR, has $20.9 billion in debt coming due over the same period.
Over the same time period, many commercial mortgage backed securities will be maturing as well. $59.7 billion in Commercial MBS come due in 2012.