Loan refinancings and amendments have eliminated the 2013-14 refinancing “cliff” and pushed it back to 2017-18, according to Fitch. However, the slowdown in bond takeouts and the increase in new loans means that the amount of loans coming due in 2017-18 totaled $890 billion at the end of last year, about 20 percent more than the original cliff.
The amount of refinancing activity in the last couple of years has been remarkable. Fitch notes that in 2009 there was $1.4 trillion of debt due through the end of 2015. By the end of last year it was only $346 million. In 2013, total refinancings and repricings totaled $756 billion – 65 percent of total issuance.
Until 2017, Fitch says annual loan maturities have been reduced to levels that can be managed by “traditional market activity.” Fitch published its analysis in a new report: “Bridging the U.S. Refinancing Cliff: Volume VII – Loan Refinancing Morphs Cliff Shape.”
Fitch estimates the “funding gap” – the amount of money that has to be raised minus current resources like cash or equity – was $179 billion at the end of last year. That means there will have to be that amount of money raised in the loan or bond markets.