Nasgovitz, which manages about $ 1.3 billion in assets as CEO of Heartland Advisors, has not called for a "full blown financial crisis," but, trillions of corporate debt will come because of the coming years , the industry veteran's not exactly predicting the smooth sailing marketplace, either.
"At low interest rates, the economy is strong, and relatively easy to leverage standards, the thought goes that borrowing on return of shares or fiscal take is a low-risk strategy," explained Nasgovitz in a recent post. "But the next five years may seriously attempt to look at Pollyanna."
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Nasgovitz used this chart to illustrate his stand:
As you can see, about $ 3.3 trillion – or 48% of all current outstanding commercial debt – is due in 2023. The timing is can be a problem.
"for the market to catch the best of the situation, let it alone late in an economic expansion," Nasgovitz wrote. "Adding to our caution is an early warning that lending standards have begun to be tight for commercial and industrial borrowers."
He says that, as banks become more restrictive, borrowers may only pay higher rates to secure funds to retire outstanding obligations
"Although we do not currently see the signs of a financial crisis that exploded on the horizon, "he said," we believe that excessive debt adds unnecessary challenges to companies in general and is likely to be a wind of heavy air borrowers in the intermediate term forward. "
Read: Why investors should not worry about credit tightening banks
Not much market fears on Wednesday, at Dow
DJIA, + 0.23%
and the S & P 500
SPX, + 0.17%
both moves slightly higher.