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S&P Analysis: US Nonfinancial Corporations Continue Deleveraging Trend Through End Of 2021

By Anna Peel. Originally published at ValueWalk.

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Investment-grade-rated U.S. nonfinancial corporations deleveraged further in the fourth quarter of 2021.

The median debt-to-equity ratio for investment-grade U.S. nonfinancial companies was 90.3% in the fourth quarter of 2021, down from 90.7% in the third quarter, according to the latest data from S&P Global Market Intelligence.


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US Companies

US Nonfinancial Corporations Continue Deleveraging Trend

Key highlights from the analysis include:

  • The decline in leverage came even as total debt continued to rise. The total liabilities of the nonfinancial corporate sector reached a record $11.650 trillion in the last quarter of 2021 from the pre-pandemic level of $10.147 trillion. Yet the median debt-to-equity ratio for investment-grade-rated companies is lower than it was before COVID-19 appeared.
  • The highly cash-generative information technology sector has the lowest leverage of the 10 nonfinancial sectors tracked by Market Intelligence. The median debt-to-equity ratio for investment-grade tech companies was just 59% in the fourth quarter, down from a pre-pandemic level of 64.3%.
  • By contrast, consumer discretionary, energy and investment-grade utility companies still have higher debt-to-equity ratios compared to the fourth quarter of 2019.

A link to the full analysis can be found here: US companies continue deleveraging trend through end of 2021 | S&P Global Market Intelligence (spglobal.com)

US Companies

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