ThinkSet | The Debt Maturity Wall: Myths, Realities, and Solutions

In today’s corporate world, the so-called “debt maturity wall” can feel a lot like the horizon: always looming, never quite reached. It refers to the growing amount of corporate debt coming due—and fears that refinancing debt might become more costly. Since Moody’s coined the phrase in 2010, it has appeared regularly in headlines and boardrooms, flaring up every few years even as its timeline is consistently pushed out.

Are 2024’s alarm bells any different? Yes and no. According to S&P Global, debt maturities are expected to jump from nearly $2 trillion in 2024 to nearly $3 trillion in 2026. And though there has been some headway in cutting these maturities down, high interest rates make this increasingly difficult, especially for high-risk borrowers.

Our research reveals that 2028 may be the year leveraged loan maturities hit their peak, given the amount of 2021 issuances fueled by private credit and favorable rates. One perspective may be that this is simply a function of how the leveraged loan market works: there will always be a wall, and organizations will persistently have to find creative ways to avoid it.

Whatever the case—and each industry and company has its own set of challenges—the impending wall is worth paying attention to earlier rather than later. “The earlier executives address their debt, the more options they’ll have at their disposal,” says Mark Renzi, a BRG managing director and leader of the firm’s Financial Services Industry practice. “It might even provide an opportunity: a reason to better manage liabilities, improve productivity, and find new levers for growth.”

Our latest issue of ThinkSet takes stock of these opportunities, as well as emerging risks and how to mitigate them.

In this issue’s infographic, Renzi and Brett Witherell illustrate key statistics related to the debt maturity wall—analyzing its historical cyclicality, impending maturity peaks, and debt issuances.

Commercial real estate (CRE) debt is on everyone’s radar—and we approach it from various angles. Will Russo, Andrew Manley, and Ian Mackie assess the gravity of the situation and offer guidance for borrowers. Meanwhile, John DelPonti examines the crisis from the banking perspective.

The economic landscape has also seen a resurgence of once-uncommon mechanisms to address problems with corporate balance sheets. Rob Shapiro turns the spotlight onto liability management transactions (LMTs), which draw on flexibilities in credit documents to help restructure liabilities. He provides insights into the three main types of LMTs and how to leverage them.

Cost takeouts and improved cash management processes are two other ways companies can free up liquidity while under financial strain. Murali Gokki, Joe Schmitt, Shawn Ashworth, and Chap Kistler deliver best practices for retailers looking to reduce costs and develop stronger free cash-flow models.

Finally, we sat down with Dr. Albert Metz for an economist’s view on the wall and what’s to come in the year ahead.

The overarching message: now is the time for companies to start thinking more about their debt.

We hope this issue of ThinkSet can help business leaders get started.