To worry or not to worry

Question: How should investors view the looming Maturity Wall?

Karen Manna: Investors should think constructively about the maturity wall. The maturity wall is a concept in fixed income where we break down the amount of maturing debt for a company, or an asset class, over time. So as maturities come in, or in our vernacular as they roll in, it seems that there is a wall building. The corporate bond market has been growing at over 8% per annum for more than the past decade. So as companies look to approach maturities, they sometimes, back when rates were flatter and lower, would renegotiate 12 to 18 months in advance. With rates moving upwards, they began to slow that process because a corporate treasurer isn't going to take on more interest expense than they need to if they think that there might be a better opportunity to refinance six to 12 or 18 months down the road. So it very much becomes a question of analysis on behalf of the corporate treasurer. Our approach always rests on fundamental corporate analysis. So it's not that we're not concerned with a maturity wall, but we look at individual companies and their ability to access markets, and also their desire and willingness to repay debt. So we look at this on an individual company basis rather than being concerned about maturity walls because good companies will always be able to access the market when they need to.