Company debt loads in the United States are approaching the highest level since the aftermath of the financial crisis as borrowing to finance mergers and shareholder payouts exceeds earnings growth. Debt levels have increased faster than cash flow for six quarters, boosting the obligations of investment-grade companies in the second quarter to 2.09 times earnings before interest, taxes, depreciation and amortisation (ebitda), according to JPMorgan Chase. That is up from 2.07 times in the first three months of the year and compares with 2.13 in the third quarter of 2009, when it peaked after the deepest recession since the Depression. Businesses from Apple to Comcast have tapped credit markets this year to take advantage of the lowest borrowing costs on record before the Federal Reserve decides to pull back on measures intended to boost an economy that is forecast to expand this year at the slowest pace since 2009. The leverage trend cannot be sustained, JPMorgan analysts led by Eric Beinstein wrote last week in a report, and a combination of rising rates and high cash balances may curtail issuance. "They are stretching their metrics and leaving themselves exposed to the risk that there isn't a full-scale recovery," said Rajeev Sharma, a fund manager at First Investors Management in New York. "Once rates start to spike up, you should see less new issuance and some kind of normalisation" in leverage, he said. Investment-grade companies have issued US$739 billion of bonds in the US this year. That is a faster pace than in the same period of 2012, when a record US$1.12 trillion of securities were issued by borrowers ranked Baa3 or higher by Moody's Investors Service or at least BBB-minus by Standard & Poor's. While earnings growth has remained limited, "there has been no moderation in the pace of debt", the JPMorgan analysts wrote in an August 23 analysis of 190 non-financial companies. Borrowings increased by 9.1 per cent in the quarter to June 30 from a year earlier, rising to a decade-high of US$2.9 trillion even as ebitda dropped 2.3 per cent, led by declines in the metals and mining industry. "A lot of debt issued in the last year has been to finance mergers and acquisitions and rewarding shareholders," said the analysts. Those trends "seem to be declining" and "we expect that companies will reduce the rate of debt issuance due to rising yields and high cash balances", they wrote. Elsewhere in credit markets, the cost to protect against losses on US corporate bonds jumped the most in more than two months as tension increased over possible military action in Syria. The World Bank's International Finance Corp sold US$3.5 billion of five-year notes. S&P cut the credit rating of Playboy Enterprises, four months after the men's magazine publisher got US$185 million in loans. The Markit CDX North American Investment Grade Index, a credit-default swaps benchmark that investors use to hedge against losses or to speculate on creditworthiness, rose 4.5 basis points to a mid-price of 84.1 basis points, the biggest increase since June 20. In London, the Markit iTraxx Europe Index rose 6.9 to 107.5. The US two-year interest-rate swap spread, a measure of debt market stress, fell 0.37 basis point to 17.88 basis points. The gauge typically narrows when investors favour assets such as corporate bonds and widens when they seek government securities.