- After record bond issuance in 2020 and profits hitting new highs, many companies are debating “What should we do with all this money?”.
- Given the limited impact to interest costs, I would expect high-quality companies to exhibit fewer bondholder-friendly spending habits.
- Instead, dividends will be increased, and stock buybacks will come back in full force.
- From an overall perspective, elevated corporate cash positions do provide some comfort for now, but ultimately what companies end up doing with their cash is what will matter for bondholders.
For further details see:
Sidelined Corporate Cash Enters The Game