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  MOODY’S INVESTORS SERVICE

Capital structure matters. All else the same, credit quality benefits—or default risk is lower than otherwise—the longer is the term to maturity of outstanding debt. Longer maturities reduce the risk that the borrower may not be able to fund the principal payment once the obligation matures. Today’s historically low bond yields have increased the attractiveness of locking up access to financial capital for an extended period and have thereby reduced principal repayment risk.