US Corporates: Covid Bonds—Deleverage or Delay?
Winnie Cisar - Global Head of Strategy, CreditSights
Zachary Griffiths, CFA - Head of IG & Macro Strategy, CreditSights
23 October 2025
Insights into US Corporates: Covid Bonds—Deleverage or Delay?report including:
Refinancing over deleveraging expected: Broad-based debt repayment from COVID-era bond maturities unlikely as issuers favor rolling maturities given strong market access and ongoing capital deployment needs.
Cash balances reflect operational requirements: Corporate cash levels have grown faster than inflation and GDP since pandemic but appear aligned with current investment plans rather than indicating excess liquidity for debt retirement.
Investment grade maturities front-loaded: Significant COVID-vintage debt scheduled to mature early with issuer-level analysis suggesting most companies will refinance rather than repay despite concentration in near-term periods.
High yield coupons remain attractive: COVID-era bonds carry notably lower interest rates compared to non-pandemic issuance creating strong incentive to refinance rather than retire debt amid favorable market conditions.
Net leverage trends indicate deployment: Debt-to-EBITDA ratios increased during pandemic period suggesting borrowed funds were utilized for operations and growth rather than sitting idle on balance sheets awaiting repayment.
Executive Summary
Broad-based debt repayment from pandemic-era bond maturities appears unlikely as corporate issuers favor refinancing strategies. Strong market access and ongoing capital deployment needs support maturity extension over debt retirement across both investment grade and high yield markets.
Corporate cash positions have increased faster than inflation and economic growth since the pandemic period. These elevated balances appear aligned with current investment requirements and transaction activity rather than indicating preparation for large-scale debt paydown.
Investment grade maturities from pandemic-era issuance show significant concentration in early periods with most issuers planning refinancing activity. Individual company strategies vary based on specific funding requirements, leverage objectives, and interest rate considerations across different sectors.
High yield pandemic-vintage maturities scheduled for the near term carry notably lower interest rates and show modestly weaker credit quality. Favorable conditions in bond and loan markets support refinancing over repayment for most issuers despite some company-specific debt reduction plans.
Maturing pandemic-era bonds will face substantially higher replacement borrowing costs affecting capital structures differently across issuers. Deleveraging activity will likely emerge from tightening financing conditions or strategic business objectives rather than representing a market-wide trend.
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