Debt Check: Scaling a $9.5 Trillion Debt Wall

The video discusses the significant growth in corporate debt since 2013, driven by Federal Reserve stimulus, and the challenges faced by credit markets. It highlights the differences between investment grade and high yield debt, noting the potential for downgrades and their impact on the market. The video also examines the energy sector's struggles with capital markets and the broader economic implications of companies using cash flow to manage debt.

What is the significance of the year 2020 in the context of corporate debt?

• It marks the beginning of Federal Reserve stimulus.

• It is the year when most companies went bankrupt.

• It is the peak year for debt maturity.

• It marks the lowest borrowing rates in history.

How have high yield bond yields changed in recent years?

• They have fluctuated between 5% and 9%.

• They have remained stable at 5%.

• They have decreased from 9% to 5%.

• They have increased from 5% to almost 9%.

What is a 'fallen angel' in the context of credit ratings?

• A company that has defaulted on its debt.

• A company that has improved its credit rating.

• A company that has been downgraded from investment grade to high yield.

• A company that has maintained a stable credit rating.

What role do ratings agencies play in the credit market?

• They provide loans to companies.

• They set interest rates for bonds.

• They manage investment portfolios.

• They assess and change credit ratings for companies.

What challenge do high yield energy companies in the US face?

• They are receiving increased investment from banks.

• They are benefiting from low interest rates.

• They are experiencing a high number of bankruptcies.

• They have easy access to capital markets.