Tuesday, January 2, 2024

Happy New Year, dedicated Calcbench users. We begin 2024 with another look at what might be the most perilous financial issue of the year to come: refinancing of corporate debt at higher interest rates. 

The latest analysis comes from Barron’s, which last week reviewed debt levels among the S&P 500 and speculated on whether higher interest rate costs will lead to widespread layoffs in the corporate world. (Spoiler: no, for various economic reasons.) Barron’s cited previous Calcbench research looking at 55 non-financial firms in the S&P 500, who collectively have $105 billion coming due this year with an average interest rate of 2.75 percent. 

The odds that those 55 firms will be able to refinance their debt at those sub-3 percent levels are slim. They’ll need to either repay that debt, which would be a hit to cash holdings; or refinance the debt at today’s higher rates, which will drive up operating costs and potentially squeeze net income. 

How companies avoid the refinance trap will be a dominant question in financial analysis for at least the first half of 2024 — but it is not a new question. Indeed, Calcbench first explored the refinancing trap one year ago, with a five-part series on who owed how much to whom, and at what rates.

We won’t recap that whole series here, but we did want to call out one specific post about where to find debt disclosures in the Calcbench data archives. 

If you want data from a group of companies, one place to start is our Multi-Company page. First, select the group of companies you want to research. (We have an entire post dedicated to creating a peer group if you need a refresher.) Once that group is set, you can choose from any number of debt-related disclosures we include in our Standardized Metrics field on the left-hand side. Those disclosures include:

  • Total debt
  • Short-, long-, and medium-term debt
  • Floating-rate debt
  • Debt-to-equity ratio
  • Interest payable
  • Interest expense

For one specific company, you can use the Company-in-Detail page, you can research what the company reports on the income statement and the balance sheet. This approach is somewhat hit or miss, because not all companies report interest expenses on the income statement — although all companies do report debt on the balance sheet. You can then trace the disclosures for the company you follow and see what it reports in the footnotes.

You can also get a global sense of a company’s debt disclosures using our Segments, Rollfowards & Breakouts page. Start by selecting the specific company you want to research. Then select “Debt Instruments” from the pull-down menu of dataset options  on the left side of the screen. Be warned, you’re likely to get lots of data in the results!

Calcbench will, of course, keep studying debt disclosures throughout 2024. Drop us a line at info@calcbench.com and let us know what else we should be studying for you!

FREE Calcbench Premium
Two Week Trial

Research financial & accounting data like never before. Get features designed for better insights. Try our enhanced Excel Add-in. Sign up now to try the Premium Suite.