Anheuser Busch Inbev SA NV (NYSE:BUD)
Historical Stock Chart
1 Month : From Aug 2019 to Sep 2019
By WSJ City
Corporate America has had an unusual priority in recent months: debt reduction. That's been much appreciated by Wall Street, where assessing the economic fundamentals of a handful of giant, heavily indebted companies has consumed investors and analysts for months.
--- Corporate leverage remains a topic of concern for several triple-B rated borrowers.
--- Those are firms whose credit ratings are the lowest rung of investment-grade.
--- Such firms, though, are raising cash, and looking to reduce debt and risk.
--- AT&T has reduced its net debt by roughly $9bn since the start of the year.
--- AB InBev has cut its dividend and sold its Australian unit as part of a bid to reduce its $100bn debt load.
Why This Matters
Newfound restraint among these firms has prompted surprising market moves. BBB-rated corporate debt has outpaced other grades. That's despite fears that a wave of mergers and buybacks had made debt vulnerable to downgrades.
Both safer than speculative-grade debt and higher-yielding than other investment-grade bonds, triple-Bs have been a sweet spot for investors facing slowing economic growth and a sharp decline in US Treasury yields. But some investors worry ballooning BBB debt could spell trouble in a downturn. If that credit is downgraded to speculative-grade status, firms' borrowing costs could rise, causing further economic disruption.
A fuller story is available on WSJ.com
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(END) Dow Jones Newswires
August 19, 2019 05:38 ET (09:38 GMT)
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