The new worry, courtesy of the New York Times, is that we’re going to be killed by a huge junk-bond refinancing wave starting in 2012, when all those awful private-equity deals that topped the market start coming due.
2012 seems like a ways away, though, and the entire refinancing total over the following three years–$700 billion–is less than the TARP (ignoring the additional $2 trillion the US government will need). Martin Fridson, for one, thinks companies have plenty of time to refinance between now and then.
But we suppose if there’s suddenly nothing else to worry about, this is as good an obsession as any.
2012 also is the beginning of a three-year period in which more than $700 billion in risky, high-yield corporate debt begins to come due, an extraordinary surge that some analysts fear could create a glut in the debt markets.
With huge bills about to hit corporations and the federal government around the same time, the worry is that some companies will have trouble getting new loans, spurring defaults and a wave of bankruptcies.
The United States government alone will need to borrow nearly $2 trillion in 2012, to bridge the projected budget deficit for that year and to refinance existing debt.