NEW YORK—Companies across the U.S. are heading toward a “refinancing cliff” that could cost them billions in the new era of high interest rates, setting up a "slowly unfolding crisis," according to one new analysis.
New research published by Baringa, a global consultancy firm, found that companies that refinance between this year and 2030 will pay an additional $381 billion in interest costs due to elevated borrowing rates, Fox Business reported.
“This amounts to the largest single increase in debt-related costs and the highest cumulative interest payment total ever faced by U.S. companies,” Fox Business said.
The largest expense is expected to occur in 2024, with more than $3 trillion in loans and bonds set to mature this year. Companies refinancing that debt will likely pay $76 billion more in interest this year than they did under lower interest rates, the Baringa data show, according to Fox Business.
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