The Great Deleveraging Is Over

Total corporate-bond debt has grown to nearly $6 trillion—up 59% since 2007. But the new wave of borrowing is coming while we’re still stuck in the slow lane on the road to recovery. As a result, corporate leverage has returned to precrisis levels. Leverage by companies rated investment grade has risen 20% since 2010 and is now 1.51 times earnings, about 6% higher than in 2008. And while U.S. companies have built up big cash reserves since 2009, the trouble is that they’re taking on debt at an even faster pace, said Eric Beinstein, a credit strategist at J.P. Morgan.

The Morning Ledger: The ‘Great Deleveraging’ May Be Over