- About 40% of government, corporate bonds mature in three years
- Debt grows at time when central banks reduce holdings
Global bond markets are facing significant challenges as governments and companies have to refinance about 40% of maturing debt in the coming three years, potentially at higher costs, according to the Organization for Economic Cooperation and Development.
In a report published Thursday, the Paris-based organization estimated that total government debt issued by its 38 member countries will rise by $2 trillion to a record of $56 trillion this year.
The OECD said that favorable funding conditions between 2008 and 2022 allowed governments and companies to borrow at low costs. But around 40% of sovereign bonds and 37% of corporate bonds globally will mature by 2026.
By then, issuers will likely roll over most of their debt at higher borrowing costs, even if central banks succeed in cooling inflation, it said.