Debt Storm Brewing? Lower-Rated Firms Face USD 222 Billion Repayment Spike by 2028
S&P Global reports a massive jump in corporate debt repayments for lower-rated firms by 2028, raising global refinancing risks.
The global financial landscape is bracing for a significant surge in refinancing risks. According to a recent report by S&P Global, corporate debt repayments for companies with lower credit ratings are projected to skyrocket to USD 222 billion in 2028, a massive leap from the USD 61 billion due in 2027.
The Looming Refinancing Crisis
While many corporate issuers have shown resilience, S&P Global warns of a widening gap between firms with strong credit ratings and those on the weaker side. As older debts mature, companies are forced to refinance them at current, higher interest rates, which significantly drives up debt servicing costs.
The report identifies several critical factors contributing to this uncertainty:
- AI-Related Risks: Concentration risks associated with the rapid adoption and investment in Artificial Intelligence.
- Geopolitical Tensions: Global instability creating unpredictable market conditions.
- High Bond Yields: Sustained high yields that increase the overall cost of borrowing for corporations.
A Strategic Shift in Borrowing
In an attempt to avoid immediate pressure, many companies were proactive during the third quarter of 2026, refinancing their upcoming obligations. This surge in activity was likely driven by fears of further interest rate hikes by major central banks and ongoing geopolitical volatility.
Data shows that between July 1 and October 1, 2026, speculative-grade nonfinancial debt maturities saw a notable decline:
- Maturities for 2027 dropped by 18 per cent.
- Maturities for 2028 decreased by 14 per cent.
This trend was even more aggressive among the most vulnerable firms. For companies rated 'B-' and below, 2027 maturities plummeted by 23 per cent, while 2028 maturities fell by 17 per cent.
The 'B-' Vulnerability and Long-term Outlook
Despite these short-term reductions, S&P Global suggests that borrowers have primarily focused on clearing the path for the next 24 months, effectively pushing the burden further down the road. This has created a "sharp acceleration" of debt due in 2028.
Companies rated 'B-' and below remain the most at-risk, as they are far more susceptible to market volatility and rising borrowing costs, increasing their likelihood of default.
The Road to 2031
The financial pressure does not end in 2028. The report indicates that speculative-grade nonfinancial debt maturities will continue to escalate rapidly after 2027. Between 2027 and 2028 alone, annual maturities are expected to more than double, reaching USD 588 billion.
The peak of this debt cycle is expected to hit in 2031, where S&P Global Ratings projects global speculative-grade nonfinancial maturities to reach a staggering USD 902 billion.