Strome Business Minute With Dr. Jeff Tanner

I’m Jeff Tanner, Dean of the Strome College of Business at Old Dominion University and this is a Strome Business Minute. Alarm bells are sounding over corporate debt. As I’ve pointed out before, companies such as AT&T, GM, and other well-known names have taken on significant debt but the current increases in corporate debt are primarily being taken on by weaker companies with higher risk. The debt comes in the form of bonds, many of which are considered junk or near junk. That shift in debt to weaker companies has been prompted, in part, by a lack of investment options with decent returns, so investors have been willing to take on the added risk. The fear, of course, is that if interest rates rise, we’ll see a bubble that bursts much the way consume credit did in two thousand eight, leading to our last recession. To learn more, visit odu.edu/business. This has been a Strome Business Minute, presented by the Strome College of Business at Old Dominion University.