Treasury Yields Above 5% Raise S&P 500 Refinancing Risk
Piper Sandler strategists estimate roughly 40% of debt held by most S&P 500 companies comes due within five years, increasing exposure to current borrowing costs.
U.S. Treasury yields above 5% across several maturities can increase refinancing risk for S&P 500 companies, with roughly 40% of their debt potentially coming due within five years.
The Treasury’s Sept. 24 par-yield curve showed the five-year yield at 5.03%, the 10-year yield at 5.18%, the 20-year yield at 5.53% and the 30-year yield at 5.47%. The figures were based on market quotations collected at about 3:30 p.m. ET (19:30 UTC).
Shorter-term yields remained below 5%. The one-year yield was 4.51%, the two-year yield was 4.87% and the three-year yield was 4.99%.
Piper Sandler strategists Michael Kantrowitz and Emily Needell estimate that roughly 40% of debt held by most S&P 500 companies comes due within five years. When lower-rate corporate debt matures, companies generally face current market borrowing costs, which can increase refinancing expenses.
Kantrowitz and Needell view persistently elevated interest rates as a significant risk to equity markets in 2026 and 2027. They said the longer rates remain high, the greater the potential effect of refinancing costs on corporate earnings and growth.
The risk will depend on the timing of each company’s maturities and the borrowing conditions available when debt comes due. The Treasury curve showed that medium- and long-term government borrowing costs had already moved above 5% as of Sept. 24.
