Here's a quiet bit of good news amid rising rates: corporate interest coverage ratios are near historic highs. Translation? Most firms can still service their debt comfortably even as borrowing costs climb.
This cushion matters. When coverage is strong, higher rates bite less. Balance sheets have room to absorb the pressure without immediate distress.
Doesn't mean valuations are justified or that rates won't matter eventually. But it does mean the immediate solvency risk is lower than the rate spike alone might suggest. Context matters.
This cushion matters. When coverage is strong, higher rates bite less. Balance sheets have room to absorb the pressure without immediate distress.
Doesn't mean valuations are justified or that rates won't matter eventually. But it does mean the immediate solvency risk is lower than the rate spike alone might suggest. Context matters.
