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1 1 (March 25, 2020)

handle is hein.crs/govcawx0001 and id is 1 raw text is: Re earh Service COVID-19 and Corporate Debt Market Stress March 25, 2020 U.S. companies are carrying record levels of debt to finance their operations and growth (Figure 1). Corporate debt largely consists of bonds and, to a lesser extent, leveraged loans, bank loans, and other liabilities. The Securities and Exchange Commission (SEC) is the primary regulator overseeing the debt capital markets. In recent years, financial authorities have become increasingly vocal about the buildup of the higher-risk portions of the corporate debt market. This Insight explains the market's composition and risks in the context of the current coronavirus (COVID-1 9)-induced capital markets stress. Figure I. U.S. Nonfinancial Corporate Debt as Share of GDP -~ 5~4. ~ 45% Av5 7r) - - - - - - - - - - - - - - - - - - - - - - - Source: HSBC, BIS total credit statiscics. Notes: Shaded areas indicate U.S. recessions. BIS core debt consists of debt securities (bonds), loans, and currency and deposits. Corporate Bonds A company can issue and sell bonds to investors in exchange for cash. Investors of corporate bonds are functioning as lenders who generally receive the payments of principal plus interest over a period of time. The bonds themselves are financial instruments that can be bought or sold. The bond issuers' borrowing Congressional Research Service https://crsreports.congress.gov IN11275 CFRS NS GHT Prepared for Mernbers and Comninttees o4 Congress ....

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