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The volume of corporate debt hit an all-time high of $13.5 trillion at the end of 2019, but the overall quality of bonds fell below levels seen before the global financial crisis, according to a new OECD report.

Corporate bond issuance has been broadly driven by structural reforms and more expansionary monetary policy worldwide, emerging as a viable source of long-term funding for non-financial companies since the crisis. As a result, non-financial companies globally borrowed around $2.1 trillion in the form of corporate bonds in 2019.

However, the report from the 36-member Organisation for Economic Co-operation and Development (OECD) highlighted that compared to previous credit cycles, today’s trove of outstanding corporate bonds is of lower overall credit quality, with higher payback requirements, longer maturities and weaker investor protection.

This may render the non-financial corporate sector and broader economy more vulnerable to the negative effects of an economic downturn.