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Companies Rush to Refinance Debt Amid Rate Uncertainty
22 Jan
Summary
- Corporate debt refinancings reached $425 billion in 2025, highest since 2020.
- Companies like Savers Value Village saved $17 million annually by refinancing.
- Market volatility and geopolitical strife prompt proactive refinancing.
In response to lower interest rates and favorable market conditions, numerous companies are proactively refinancing their debts ahead of maturity. This strategic move aims to secure advantageous terms and mitigate risks associated with economic uncertainty and potential rate hikes.
Corporate debt refinancings totaled approximately $425 billion in 2025, marking a 5% increase from the previous year and the highest volume recorded since 2020. Companies are capitalizing on narrowed credit spreads, which are at their lowest percentage since the 1990s, to lower their borrowing costs.
Savers Value Village, for instance, refinanced in September, extending its debt maturity by four years and achieving annual savings of around $17 million on approximately $750 million in debt. Similarly, Elanco Animal Health refinanced a $2.1 billion term loan to push out its maturity, and Hovnanian Enterprises refinanced $900 million in senior notes, saving $12 million annually.
