Why Are Companies Borrowing So Much?

Why Are Companies Borrowing So Much?

Assessment

Interactive Video

Business

University

Hard

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The video discusses the current favorable borrowing conditions, highlighting low interest rates for euros and dollars. Companies are taking advantage by issuing longer maturity debt. Easy monetary policies, especially in Europe, are driving these conditions, with central banks like the ECB buying corporate bonds. Investors, facing negative yields, are turning to riskier assets like corporate debt, increasing demand. The video also predicts a seasonal decline in market activity but expects companies to continue issuing opportunistically.

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2 questions

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1.

OPEN ENDED QUESTION

3 mins • 1 pt

Why are investors willing to accept low yields on corporate debt?

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2.

OPEN ENDED QUESTION

3 mins • 1 pt

What is the expectation for corporate debt issuance in June according to the text?

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