However, investors are now fretting about higher interest rates, since
rising debt costs could spell trouble — not least because utilities have borrowed so much money.
Meanwhile the project also had to contend with
rising debt costs.
Not exact matches
As rates begin to
rise again, the
cost of that
debt will too
Debt servicing
costs will
rise, too.
«I think a lot of that negative news is priced in — you have competition, you have high
debt levels and you have
rising costs.
Staring down tens of thousands of dollars in
debt,
rising mortgage
costs and no foreseeable way to substantially boost their incomes, the couple decided to sell their house and rent.
Debt servicing
costs would
rise for the government, too, sparking a budget problem.
Thanks to
rising health
costs, stagnant wages and growing levels of
debt — especially the $ 1.4 trillion of student loans borrowers owe — you may need to generate more income just to get by.
Without the presence of U.S. banks, the market for sovereign
debt could become less liquid, and borrowing
costs for governments could
rise.
Within the first two years of starting FedEx, founder Frederick Smith found his company so many millions of dollars in
debt, because of sharply
rising fuel
costs, that he was nearly ready to declare bankruptcy.
The record high levels of consumer
debt among Canadians has also raised a red flag from Bank of Canada governor Mark Carney and others who have warned that interest rates will
rise at some point — raising the
cost of borrowing.
Plenty of ink has been spilled on the root causes behind this troubling phenomenon, from high student
debt to the
rising costs of healthcare.
The report noted that one area that has worsened in the last 30 years has been the
rising cost of housing, which has been attributed to bigger mortgages and more
debt.
With credit card
debt rising steadily, the quarter - percentage - point increase in the federal funds rate will
cost consumers roughly $ 1.6 billion in extra finance charges in 2017, according to a WalletHub analysis.
She says that, between student
debt and a
rising cost of living, millennials are under a tremendous amount of financial pressure.
The Bank for International Settlements singled out Canada for its accelerated growth in credit relative to GDP and for its susceptibility to a sharp
rise in
debt - service
costs.
Meanwhile,
debt servicing
costs already consume an additional 10 % and are likely to
rise.
This is because the province has accumulated a large public
debt that given the prospects for an economic slowdown and / or
rising interest rates will potentially increase fiscal pressure via
debt service
costs which in 2016 - 17 totaled $ 11.7 billion or just over 8 percent of total government spending.
When it comes to credit card
debt, some people think it's the result of overspending, while others blame it on the
rising cost of living for necessities.
Debt service
costs have
risen to 15 percent of GDP — just short of record highs — according to CLSA.
Unhedged foreign currency
debt, as was prominent in 1997, means that a fall in the currency pushes up
debt servicing
costs for the government, local corporates and banks, but a
rise in interest rates to assist the exchange rate has the same adverse effect.
But with provincial deficits swelling from coast to coast this year, and
rising health care
costs expected to ravage provincial coffers in the coming decades, federal figures are starting to paint an increasingly misleading portrait of Canada's government
debt situation.
This would sharply enhance growth rates during the expansion phase, much like margin borrowing enhances returns when market prices are
rising faster than the
debt servicing
costs, but at the expense of sub-par performance once conditions reverse.
As the gap widens, it creates
rising uncertainty about how excess
debt servicing
costs will ultimately be allocated, and at the point at which this uncertainty is high enough to alter materially the behavior of economic agents, and so lower the net asset value of the economic entity, the borrowing country has «excessive»
debt.
To some extent, these concerns are allayed by the existence of natural hedges, such as foreign currency export income, although
rising US dollar - denominated
debt servicing
costs at a time of falling US dollar - denominated commodity revenues would obviously be problematic.
In addition, the mortgage market looks set for a particularly heavy year of renewals in an environment where
debt - servicing
costs are already
rising at the fastest pace in a decade.
As the rouble falls, the
cost of servicing its mortgage
debt will
rise.
Rising rates also will increase
debt costs to the federal government, which continues to rack up deficits and borrowing with reckless abandon.
The vast majority of spending growth over the next decade is the result of
rising costs for health care, Social Security, and interest on the
debt.
«The
cost of
debt is still very low for most issuers, animal spirits have been
rising, and tax cuts may drive confidence even higher.
Unless China is able, very improbably as I have argued, to reform the financial sector deeply enough and quickly enough, the
cost of a more competitive (i.e. more highly subsidized) export sector is ultimately a
rise in the
debt burden, unless of course Beijing is willing to tolerate higher unemployment or to implement greater wealth transfers from the state to the household sector.
China's public - sector investment, in other words, is value destroying, and because it is funded by
debt, additional investment causes China's real
debt servicing
costs to
rise faster than its real
debt servicing capacity.
When China was underinvested, investments were nearly always productive, and so the ability to ignore budget constraints and hide the
costs of nonproductive investment in the form of
rising debt had little effect on the GDP data — or, to put it differently,
rising debt did not reflect a
rising debt burden.
Since U.S. government
debt is not long - term in nature, higher refinancing
costs are extremely vulnerable to
rising interest rates.
The
cost of insuring senior financial
debt in Europe
rose for a fifth day.
The
cost of financing those
debts is
rising fast, with the recent sell - off in Portuguese sovereign bonds pushing yields to levels not seen since October 2014.
In addition to a weaker euro, which helps fuel its export - oriented economy, the
cost of financing its sovereign
debt relative to its existing
debt continues to fall while the smaller countries struggle with
rising financing
costs.
Fixing our
debt will now require reversing the harm that has already been done with tax cuts and spending increases, in addition to confronting the
rising costs of Social Security and Medicare with spending changes and / or additional revenue.
In the 1980s, when the sharp
rises in foreign
debt and its servicing
costs were occurring, the Australian economic debate was, not surprisingly, pre-occupied with these issues.
For many of them, thanks to the
rising cost of tuition, there will be an extra weight around their necks in the form of student
debt.
The
cost of protecting the company's subordinated
debt from default for five years using credit - default swaps has more than doubled since the end of 2015,
rising to 438 basis points, a four - year high, from 187.
Retirement these days seems nearly impossible for anyone before the age of 50: high
debt volumes, a devaluing currency, a
rising cost of living and a lack of valuable, genuine assets.
The stagnation of wages among low - and middle - income families and
rising costs, of housing in particular, has led to record levels of consumer
debt.
Ratings agencies are downgrading the
debt of the Spanish banking sector, causing borrowing
costs to
rise, which may trigger further negative perceptions.
While falling world interest rates have reduced the servicing
cost of foreign
debt over the past two years, this has been offset by
rising dividend payments on foreign holdings of Australian equity, reflecting the strong profit growth of Australian companies throughout this period.
This likely doesn't bode well for future S&P 500 returns, especially when interest rates
rise - increasing the
cost of
debt repayment and adjusting expected returns and valuations.
In addition,
rising equity values for Utilities offsets the advantages that cheap
debt has for their
cost of capital.
With the
cost of college on the
rise, it's little surprise that student loan
debt is on the
rise, too.
The
rising cost of college has added an additional financial burden for many parents who don't want to see their children suffer under a mountain of student loan
debt.
The economy shrank by 2.3 % last year, the
cost of two - year government
debt tripled in a week, and 10 - year yields
rose above 6 %.