Corporate Refinancing Hurdle Rates Rise Amid Prolonged Benchmark Plateau
Summary: Mid-market corporate borrowers face rising capital costs as short-term debt maturities come due. Debt service coverage ratios are compressing across leveraged balance sheets, requiring disciplined working capital optimization and debt restructuring strategies.
Baseline hurdle rates calibrated prior to rate tightening underestimate borrowing costs by 180 to 240 basis points, directly affecting acquisition yield assumptions and liquidity margins.