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Companies' mad dash for debt hitting record levels

How the Fed rate hike affects the stock market

U.S. companies not only are issuing more debt than ever. They're also extending it to durations never seen before.

The end result could be a good deal for the issuers but not as great for investors.

Average corporate debt maturity surged to 21.3 years in September, according to the latest data from the Securities Industry and Financial Markets Association. That's by far the longest duration since SIFMA began keeping such records in 1996. In relative terms, it was a one-month jump of 39 percent, a 45 percent gain from the full-year 2014 average and 147 percent higher than 10 years ago.

For corporations, the extension makes sense.

Most market participants expect the Federal Reserve to start raising its key interest rate in the coming months. That move will ripple through markets and ultimately push the cost of borrowing higher, though to what degree only time will tell.

Companies, then, are using these final days of a near-zero fed funds rate to lock in lots of debt, and for the longest payment period possible. Duration has been rising generally since 2005, but the ascent became more significant since the Fed cut rates to near zero amid the financial crisis in 2008.