Corporate debt is at its highest level relative to U.S. GDP since the financial crisis , and while not now a concern, that mountain of corporate IOUs could quickly turn into a heap of worry under the right circumstances.
Fueled by low interest rates and strong investor appetite, debt of nonfinancial companies has increased at a rapid clip, to $8.7 trillion, and is equal to more than 45 percent of GDP, according to David Ader, chief macro strategist at Informa Financial Intelligence.
According to the Federal Reserve, nonfinancial corporate debt outstanding has grown by $1 trillion in two years.
"Everything is fine until it isn't," Ader said. "We don't need to worry about that until we're in a slowdown and profit declines."
Low rates have encouraged companies to borrow, but instead of using the money to expand, they have used it to boost their share prices, he said.