Reported 4 months ago
According to Bank of America Corp., US companies are benefiting from lower borrowing costs in the investment-grade market due to upgrades in ratings, faster earnings growth, and improved profit margins. The bank's strategists highlighted a more positive fundamental outlook for large corporations compared to leverage metrics, cautioning against focusing solely on backward-looking accounting metrics. Risk premiums have been tightening, approaching levels last seen in 2021, which is attributed to factors beyond leverage affecting spreads in the investment-grade market. Various metrics, such as debt-to-enterprise value and credit ratings, indicate improvement, with net upgrades totaling $129 billion over the past year for high-grade companies.
Source: YAHOO