The levels of fixed-rate debt and floating-rate debt should come down, and the coverage ratios should improve in the next year or two, says General Growth Chief Financial Officer Bernard Freibaum Bernard Freibaum in a conference call with investors today.
The levels of fixed-rate debt and floating-rate debt should come down, and the coverage ratios should improve in the next year or two, says General Growth Chief Financial Officer Bernard Freibaum in a conference call with investors today.
Based on that, many companies have refinanced their floating rate debt into fixed rate loans.
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If you look at the data, about 49 percent of homeowners have one measure of vulnerability: high debt payments, high levels of variable interest rate debt, a very high leverage, they own very little of ground homes or they own very little outside of their homes.
As a nation, we have succeeded not only in achieving higher highs in nominal debt but of increasing the rate of debt growth as well.
The key here is realizing that if you just role over debt then the interest rate is the growth rate of the debt.
On floating-rate debt, the yields can adjust and allow investors to get paid more in a rising-rate environment.
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The greater the spread between the high-interest debt and the rate of return on investment, the greater the financial advantage for paying off the debt first.
Within the Latin American forex space, the Mexican peso now looks more attractive from a carry perspective that is where low interest rate countries like Japan buy the local debt of higher interest rate countries.
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Other options might be high-yield bonds, floating-rate debt, cash, commodities, or real-estate income producing properties.
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But it does not justify racking up debt at a rate equal to 10% of gross domestic product.
But still, an all-debt floating-rate purchase does bring back memories of the bad old days of real estate.
While this goes totally against economics 101, there is a reason investors are willing to hold liquid, zero interest rate debt.
The recession has made the job of recovering rate debt more difficult.
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For more than 30 years the SEC has taken upon itself the task of deciding who should rate debt instruments and who shouldn't.
If the cash is not needed in the short term (see "why" above), then the smarter investment move is to pay down or off the higher rate debt.
If revenue growth is not in line with the interest rate, then debt and revenue will diverge at an exponentially increasing rate.
Our analysis compares the twelve month rate of change in real gross total debt growth versus the growth rate of real GDP.
To compute real debt growth, we subtract the annual rate of change of the Consumer Price Index from the rate of change of gross total debt.
Interestingly, Moody's tends to rate the debt of bank holding companies lower than the debt of their operating subsidiaries.
Another issue: more than half of Shurgard's debt is variable-rate, meaning rising interest rates could hurt its profitability, according to Litt.
It will pay only part of the interest, capitalising the rest so that the debt grows at the rate of inflation.
In the upswing, consumers took on mucho debt, the savings rate at one point dwelled in negative ground, normally 6 percent of personal income.
The rankings were based on a number of metrics including unemployment rate, debt per capita, home price change between 2006 and 2009 and median household income.
If debt increases at the rate of 12% of GDP per year, it will accumulate to more than 100% of GDP in less than eight years.
For as people refuse to buy the rolled over debt at current prices, the interest rate that has to be paid to roll over that debt rises and thus Italy becomes insolvent.
One would allow a debt deduction only for a market rate of return, say the first 11% or 12%, on a debt instrument.
We are burdened with trillions of dollars in national debt and a high unemployment rate.
When inflation rises, for instance, bondholders will expect a higher nominal interest rate on new debt.
Monday's 6.29% rate on new debt is the highest Italy has had to pay since 1997.
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