Rising bond yields raise borrowing costs for weaker companies

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  Rising government bond yields are increasing refinancing costs for companies, with weaker borrowers facing particularly high interest burdens.

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  Companies with strong credit ratings can still obtain financing on affordable terms.

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  In France, bonds issued by companies and worth €215 billion now yield less than French government bonds.

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  That amount is 18 times higher than at the start of the year, according to Bloomberg data.

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  The shift reflects investors’ growing concern about rising government debt.

Who

Companies issuing bonds, especially weaker borrowers; investors are demanding higher yields.

What

Rising bond yields are making company refinancing more expensive, with weaker borrowers facing greater interest costs.

When

The change has become apparent in recent weeks.

Where

In bond markets, with France cited as a prominent example.

Why

Investors’ concern about rising government debt has pushed up government bond yields, affecting company financing.

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