Research Briefing | Jul 15, 2022

Why US corporates can stand the heat from rising rates

Increased borrowing costs are raising corporate default fears in the US, but we believe higher interest rates alone won’t be sufficient to spur a significant jump in defaults. We think businesses are well-positioned to stand the heat due to a high degree of liquid assets and long debt maturity profiles, plus healthier interest coverage and lower leverage ratios than pre-pandemic.

What you will learn:

  • We think a greater risk is that if rates stay high as the economic expansion slows, weaker revenue growth could leave companies with less cash to meet their debt obligations.
  • Lower-quality borrowers face the greatest risks.
  • The median interest coverage ratio across US industries rose to 8.7 in Q1 2022 from 4.8 in Q4 2019, evidencing the bigger cushion businesses have to cover interest expenses.

Back to Resource Hub

Related Services

Current Expected Credit Loss (CECL)


US Forecasting Service

Access to short- and long-term analysis, scenarios and forecasts for the US economy.

Find Out More


Global Macro Service

Monitor macro events and their potential impact.

Find Out More
various country flags


Global Economic Model

Our Global Economic Model provides a rigorous and consistent structure for forecasting and testing scenarios.

Find Out More