## Figure 1.9. Tracking the Corporate Credit Cycle: United States versus Europe

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**Canonical URL:** [Figure 1.9. Tracking the Corporate Credit Cycle: United States versus Europe](https://www.imf.org/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-9.pdf)

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### Overview / Key Findings
- US economic indicators have climbed to postcrisis highs, but "the credit cycle has advanced even faster."
- European economic indicators have started to decelerate, while "the credit cycle has been more muted given ongoing bank balance sheet repair."
- Summary statement: "A plethora of indicators of risk-taking point to a late stage of the credit cycle in the United States. In Europe, financials and firms are more cautious after the sovereign debt crisis."

### United States — Business Cycle and Corporate Credit Cycle (panels and indicators)
- Data extend from 1980 for the United States.
- Shaded areas indicate recessions.
- Business Cycle indicators and Corporate Credit Cycle indicators are presented as percentile ranks (rescaled) and individual latest levels and percentiles.
- Selected Business Cycle and Corporate Fundamentals latest levels (as shown):
  - Industrial Production (YoY percent): 1.2
  - Unemployment Rate (percent): 8.1
  - Output Gap (percent of potential GDP): –0.2
  - Capacity Utilization (percent of total capacity): 83.6
  - Consumer Confidence (percent balance/diffusion index): –6.2
- Selected Corporate Credit Cycle and Financial Risk‑Taking latest levels (as shown):
  - MFI Loans to Nonfinancial Firms (YoY percent): 2.9
  - IG Net Leverage (times): 2.0
  - HY Net Leverage (times): 2.9
  - IG Interest Coverage (times): 7.0
  - HY Interest Coverage (times): 2.3
  - IG Capex to Sales: 5.9
  - HY Capex to Sales: 5.0
  - IG Cash to Debt: 26.6
  - HY Cash to Debt: 19.9
- Additional corporate metrics and percentiles explicitly shown (Latest Level / Percentile / Signal; selected examples):
  - Percentile values shown include: 42%, 88%, 75%, 80%, 68%, 61%, 62%, 21%, 3%, 21%, 30%, 63%, 8%, 11%, 94%, 2%, 64%, 53%, 28%, 47%, 99%, 69%, 82%, 71%, 99%, 88%, 41%, 70%, 98%, 33%, 99%, 80%, 58%, 8%, 26%, 66%, 99%, 45%, 27%, 98%, 97%, 61%, 93%, 90%, 95%, 95%.

### Europe — Business Cycle and Corporate Credit Cycle (panels and indicators)
- Data extend from 2000 for Europe. Europe mostly includes the euro area.
- Shaded areas indicate recessions.
- Selected Business Cycle latest levels (as shown):
  - Industrial Production (YoY percent): 4.0
  - Unemployment Rate (percent): 3.9
  - Consumer Confidence Index (1985 = 100): 126.6
  - Capacity Utilization (percent of total capacity): 78.5
  - Output Gap (percent of potential GDP): 0.2
- Selected Corporate Credit Cycle and Financial Risk‑Taking latest levels (as shown):
  - Debt/GDP - Nonfinancial Firms: 74.4
  - C&I Loan Growth (YoY percent, 6MMA): 4.0
  - IG Gross Leverage (times): 6.4
  - HY Gross Leverage (times): 4.4
  - IG Interest Coverage Ratio (times): 9.8
  - HY Interest Coverage Ratio (times): 4.6
  - IG Capex/Sales: 4.4
  - IG Cash/Debt: 13.6
  - BBB (percent of total IG): 49.3
  - CCC or Below (percent of HY new issuance): 8.4
  - HY/Loan Issuance (percent of outstanding): 9.3
  - Ex-Fin Net Stock Buyback Volumes S&P 500 ($ billions): 427.6
  - M&A Loan Volumes ($ billions): 157.1
  - M&A/LBO Issuance (percent of HY/loans supply): 46.4
  - LBO Loan Volume ($ billions): 108.6
  - LBO Transactions > 6 times leverage: 47.6
  - Global CLO Volume ($ billions): 136.5
  - New Issue Leverage on all First-Lien Loans (times): 4.2

### Methodology and Notes
- In panels 1 and 2, indicators are equally weighted based on rescaled percentile ranks.
- Icons and percentile ranks are reversed for unemployment rate, interest coverage, cash/debt, and share of investment-grade (IG) debt.
- Abbreviations used in the figure (as listed): BBB = BBB-rated bonds; Capex = capital expenditure; CCC = CCC-rated bonds; C&I = commercial and industrial; CLO = collateralized loan obligations; Cov-lite = relaxed covenants; EUR = euro; Fin = financial; HY = high yield; Int = interest; LBO = leveraged buyouts; L12M = last 12 months; M&A = mergers and acquisitions; MFI = monetary financial institutions; 1L = first lien; 6MMA = six-month moving average; YoY = year over year.
- Time axis examples shown: Jan. 1999, Jul. 2001, Jan. 04, Jul. 06, Jan. 09, Jul. 11, Jan. 14, Jul. 16.

*Sources: Bank for International Settlements; Bloomberg Finance L.P.; Bond Radar; Dealogic; European Central Bank; European Commission; Eurostat; Federal Reserve; Markit; Moody’s; Morgan Stanley; S&P Leveraged Commentary & Data; and IMF staff estimates.*

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-9.pdf_