Issuance volumes started strong in first-quarter 2025, but a chill has set into financing conditions since the announcement on April 2 of new tariffs. Since the announcement, primary markets have cooled, and the availability of corporate debt funding appears to have contracted, particularly for lower-rated borrowers.

The risk is heightened by the amount of debt scheduled to mature. While borrowers in the first quarter continued to make progress refinancing debt and reducing near-term maturities, the availability of funding is looking increasingly uncertain. This uncertainty is stemming from the escalating trade conflicts; the risk of slowing economic growth; and the recent widening of credit spreads, which is contributing to rising funding costs.

The pace of bond and leveraged loan issuance remained resilient in the first quarter, nearing prior-year volumes. In April, issuance rapidly dropped off, with investors and issuers taking stock of the situation in the market. This was the steepest drop-off in issuance since 2020, but compared with 2020, the demands for refinancing appear more pressing now given the schedule for debt coming due.

In January 2020, just before the COVID-19 pandemic disrupted financial markets, we estimated that the amount of rated debt scheduled to mature over the upcoming 48 months included $1.67 trillion in speculative-grade debt (rated 'BB+' or lower). Now the stakes are higher, with more than $2.51 trillion in speculative-grade debt maturing over the next 48 months (see chart 1).

Even though near-term maturities in 2025 and 2026 appear largely manageable, mounting maturities through 2028 may weigh on issuers. Amid uncertainty in the first quarter, speculative-grade bond and leveraged loan issuance surpassed $300 billion. For perspective, issuance in the past three months well exceeded maturities in the next 12 months.

In the past, we've seen many occasions where primary market activity for lower-rated issuers paused in response to acute market volatility. If such a pause turns into a more extended dislocation, then the pressure on borrowers may intensify.

Chart 1

The Rate Of Speculative-Grade Issuance Remained Above Average In The First Quarter

Robust bond and loan issuance supported refinancing efforts during first-quarter 2025, allowing issuers to push back maturities. Both investment- and speculative-grade issuance was only slightly below the elevated levels from first-quarter 2024.

With issuance holding strong, recently issued debt (in the last 12 months) accounts for a growing share of the total outstanding over the past 12 months, particularly for speculative-grade. 26% of currently outstanding speculative-grade nonfinancial debt was issued in the past 12 months, up from 15% a year ago (see chart 2). The increase reflects the relatively fast pace of issuance over the past year. On average (since 2019), the share of speculative-grade debt that had been issued in the prior 12 months has been lower, at 20%.

Meanwhile, 11.5% of outstanding investment-grade nonfinancial debt on April 1, 2025, had been issued in the past 12 months (see chart 3). Although this share is down by a percentage point since January, it remains up slightly from a year ago.

Recently issued debt accounts for a larger portion of speculative-grade debt than investment-grade, and speculative-grade tends to be issued with a shorter tenor. The median maturity length of speculative-grade nonfinancial debt instruments globally is 3.75 years, which is notably shorter than the median of 5.83 years for investment-grade nonfinancial debt.

Chart 2

Chart 3

Near-Term Refinancing Demands Still Appear Manageable, But Higher Maturities Loom Further Out

• In the first quarter of 2025, the amount of rated debt from global financial and nonfinancial corporate issuers maturing in the rest of 2025 (April 1-Dec. 31) declined 5.3%, to $1.42 trillion (see chart 4). This compares with a 6% decline in the first quarter of 2024 for debt maturing over the three subsequent quarters.
• The reduction was more pronounced among the lowest-rated issuers: Nonfinancial corporate speculative-grade debt with maturities in the rest of 2025 declined 14% since the beginning of the year (see chart 5). Debt rated 'B-' and below showed an even more pronounced decline of 19%.
• Further out, annual maturities of speculative-grade debt maturing between 2026 and 2028 also declined during the first quarter, mainly for nonfinancial corporate entities (see chart 6). This points to a slight easing of refinancing pressure as borrowers in the first quarter chipped away at annual maturities of speculative-grade debt through 2028.
• Investment-grade debt showed less of a decline, with maturities for the remainder of 2025 down by 4%. The annual maturities through 2029 rose.
• Financial services debt represents 44% of maturities for this year and next, and then gradually declines to 32% in 2029. The decline comes from an uptick in shorter-dated issuance as well as a tendency to refinance closer to maturity in financial services.
• Speculative-grade debt, which tends to pose higher refinancing risk, accounts for just 12% of outstanding maturities for the remainder of 2025--amounting to $164 billion (including both financial services and nonfinancial corporates). But, it rises quickly to peak at $1.07 trillion in 2028 (37% of annual maturities). In the same year, just more than half (53%) of nonfinancial maturities are speculative-grade.
• Global rated corporate debt maturities peak in 2028 at $2.87 trillion. Over half of the speculative-grade debt maturing in that year is pandemic-era debt that was issued back in 2020 and 2021.
• The peak maturity year has been pushed out since last year. On April 1, 2024, maturities were scheduled to peak in 2026.

Chart 4

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Chart 7

Maturities Of 'B-' And Lower-Rated Debt Are Limited This Year But Rise Rapidly Through 2028

• For the remainder of 2025 (April 1 through Dec. 31) through 2026, global speculative-grade-rated corporate maturities (financial and nonfinancial debt) total $612 billion, and $559.6 billion of this is from nonfinancial corporate issuers.
• Speculative-grade issuers tend to refinance their debt 12-18 months ahead of maturity. Partly because of that, speculative-grade accounts for a small share of near-term maturities. What's more, with the surge of refinancing activity during 2024, borrowers also made strides refinancing debt maturing further out.
• Given the typical schedule, issuers will likely want to address 2028 maturities in 2026 or 2027. But for now, remaining debt due in 2025 and 2026 is the more pressing refinancing demand.
• The 'BB' category accounts for the largest share of speculative-grade nonfinancial maturities through 2026, around 45% (see chart 8).
• The nonfinancial sector with the most debt maturing through 2026 is auto, which has $267.5 billion maturing (12% of which is speculative-grade).
• Media and entertainment is the sector with the most speculative-grade debt maturing through 2026 (with $94.4 billion), and speculative-grade debt is the majority of the sector's maturities through 2026.
• Meanwhile, health care is the sector with the highest amount debt rated 'B-' and below maturing through 2026 ($31.2 billion). Debt rated at such low levels can be more vulnerable to refinancing risk, particularly when investors become more risk averse (see chart 10).

Chart 8

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Chart 10

Median Prices Decline For The Lowest-Rated Bonds Maturing Further Out

The median price for a 'CCC'/'C' category bond maturing in the next 12 months is 96.9 (out of a 100) as of April 14, 2025. While prices for the 'CCC'/'C' category remain lower than the prices on higher-rated debt, the median price for the near-term maturities of 'CCC'/'C' category bonds has risen since the beginning of this year.

However, investors appear more wary of 'CCC'/'C' category bonds maturing further out (see chart 11). 'CCC'/'C' category bonds maturing between April 1, 2026, and March 31, 2027, show a median price near 88. When investors become more risk averse, investor demand for 'CCC'/'C' category bonds tends to be the first casualty, and this can be reflected in declines in pricing and widening of spreads.

Pricing for higher-rated debt, even the next-lowest category of 'B', remains considerably closer to par. Medians by rating category for 'B' and above range from near 98 for bonds maturing in the next 12 months, to near 100 for bonds maturing 12 months after that.

Chart 11

Table 1

Funding Costs Have Been Volatile

Not only has issuance diminished since the beginning of April, but funding costs have also been volatile, and rising for some. In the U.S., while yields on long-term Treasuries briefly spiked to 4.50% in April, speculative-grade borrowers' cost of funding has been more affected than investment-grade. Credit spreads for speculative-grade bonds swiftly widened by over 100 basis points.

Based on the new issues we observed in the first quarter of 2025, we estimate that funding costs are still poised to rise for issuers of 'BBB' and 'BB' bonds as current bonds mature this year and next (if those bonds are refinanced at recent rates).

Fixed-rate European 'BBB' bonds maturing in 2025 and 2026 have a median coupon of about 2.1%, and 'BB' bonds have a median coupon of around 3.1% (see charts 12-13). If refinanced at recent new-issue yields, then we estimate that the funding costs of European 'BBB' bonds maturing in 2025 and 2026 would go up by around 160 basis points (bps), and 'BB' bonds up by 190 bps-260 bps.

In the U.S., the comparable increase would be between 150 bps and 200 bps for 'BBB' bonds, and around 185 bps for 'BB' bonds (see charts 14-15).

However, given the recent uncertainty and the diminished volume of issuance, the path of funding costs is far from certain, and expectations vary widely.

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Chart 15

Surging Issuance Lifts Debt Totals

The par value of rated debt outstanding rose by 3.3% in the 12 months to April 1, 2025--to $24.5 trillion. This growth included a 4.9% increase in speculative-grade and a 2.9% increase in investment-grade (see chart 16). The rise in total debt stemmed from the sustained strong issuance in 2024 and early 2025, even as much of the new issuance was allocated to refinancing existing debt.

Chart 16

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Table 4

Data Approach

S&P Global Ratings believes there is a high degree of unpredictability around policy implementation by the U.S. administration and possible responses--specifically with regard to tariffs--and the potential effect on economies, supply chains, and credit conditions around the world. As a result, our baseline forecasts carry a significant amount of uncertainty. As situations evolve, we will gauge the macro and credit materiality of potential and actual policy shifts and reassess our guidance accordingly (see our research here: spglobal.com/ratings).

In this study, we estimated maturities and potential refunding needs of financial and nonfinancial corporate debt rated by S&P Global Ratings, aggregated by issue credit rating.

For each region, we included the rated debt instruments of all parent companies and their foreign subsidiaries. We counted the debt of all these companies regardless of the currency or market in which the debt was issued. We converted any non-U.S.-dollar-denominated debt to U.S. dollars based on the exchange rates on April 1, 2025.

The issue types covered include loans, revolving credit facilities, bank notes, bonds, debentures, convertible bonds, covered bonds, intermediate notes, medium-term notes, index-linked notes, equipment pass-through certificates, and preferred stock. In the case of revolving credit facilities, the amount usually represents the original facility limit, not necessarily the amount that has been drawn. Debt amounts are tallied as the face value of outstanding rated debt instruments.

We excluded individual issues that are not currently rated at the instrument level, as well as instruments from issuers currently rated 'D' (default) or 'SD' (selective default). We expect the credit market will have already accommodated some of the debt remaining in this year, given normal data-reporting lags.

We also aggregated sector-specific data according to the subsector of the issuer. The financial sector is defined as all banks, brokers, insurance companies, asset managers, mortgage companies, and other financial institutions. We aggregated debt issued by financial arms of nonfinancial companies with the sector of the corporate parent. We excluded government-sponsored agencies such as Fannie Mae and Freddie Mac, project finance, and public finance issuers.

In this study, we've aggregated maturity data into the following regions: U.S., Europe, rest of world, and emerging markets. We define those regions as follows:

U.S.:  U.S., American Somoa (U.S.), Bermuda, Cayman Islands, Guam (U.S.), N. Mariana Islands (U.S.), Puerto Rico, and U.S. Virgin Islands.

Europe:  Andorra, Anguilla (U.K.), Austria, Belgium, British Virgin Islands, British Indian Ocean Territory, Channel Islands, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Falkland Islands (U.K.), Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Greenland, Guernsey, Holy See (Vatican City), Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mayotte (France), Monaco, Montserrat, Netherlands, Netherland Antilles, New Caledonia (France), Norway, Portugal, Reunion (France), San Marino, Sint Maarten (Dutch Part), Slovak Republic, Slovenia, Spain, St. Helena (U.K.), St. Pierre/Miquelon (France), Svalbard/Jan Mayer Islands (Norway), Sweden, Switzerland, U.K., and Wallis/Futuna Islands (France).

Rest of world:  Any country not included in either the U.S. or Europe.

Emerging markets (or EM-18):  Argentina, Brazil, Chile, China, Colombia, Hungary, India, Indonesia, Malaysia, Mexico, Peru, Philippines, Poland, Saudi Arabia, South Africa, Thailand, Vietnam, and Turkiye.