U.S. companies have been scaling back borrowing while posting improved earnings, marking some tentative signs of progress amid continuing concerns about their elevated debt levels. As a result, U.S. corporate debt amounted to 3.4 times Ebitda on June 30. Debt investors generally aren’t interested in this sort of deleveraging because it doesn’t affect net debt, or total debt minus their cash holdings. Many investors remain concerned about corporate leverage. Still, while corporate leverage has increased in the postcrisis period, residential-mortgage debt and municipal-bond debt have both been declining as a percentage of the economy.

Source: Wall Street Journal August 27, 2018 10:32 UTC