Rise in debt led by refinancing activity among higher-rated companies.

Total U.S. corporate borrowing hit a new record in the third quarter, according to new data from S&P Global Market Intelligence.

The rating agency reported that the total debt load for rated non-financial U.S. companies rose by 0.5% in the quarter to US$8.45 trillion. The previous record was US$8.43 trillion, registered in the first quarter.

S&P said that the increase in debt this year, “could be partially attributed to proactive refinancing activity as companies look to restructure large amounts of debt issued at low interest rates in 2020 and 2021 ahead of maturities in 2025 and 2026.”

Indeed, the increase was driven by investment-grade companies, it said, as their combined debt load rose 2.1% in the third quarter to US$6.63 trillion. Speculative-grade firms trimmed their debt in the third quarter, with total borrowing declining by 4.7% to US$1.83 trillion.

Among U.S. investment-grade companies, total debt has increased across all sectors, except for information technology and consumer staples, S&P reported.

Consumer discretionary companies led the way among investment-grade firms, with debt rising 24.5% in the third quarter.

At the same time, among speculative-grade companies, the consumer discretionary sector saw debt decline most sharply, down 30.5% in the quarter.

“Though total debt for investment-grade and non-investment-grade companies moved in opposite directions, median debt-to-EBITDA ratios rose for both groups of companies in the third quarter,” S&P said.

For investment-grade companies, the median debt-to-EBITDA ratio rose to 2.69 in the third quarter, up from 2.58 in the second quarter. The median for speculative-grade companies ticked up to 3.59 in Q3 from 3.56 in Q2.