What is 'Rollover Risk'

Rollover risk is a risk associated with the refinancing of debt. Rollover risk is commonly faced by countries and companies when their debt is about to mature and needs to be rolled over into new debt. If interest rates rise adversely, they would have to refinance their debt at a higher rate and incur more interest charges in the future.

Also known as "roll risk."

BREAKING DOWN 'Rollover Risk'

For example, if the United States had $1 trillion dollars of debt it needed to roll over in the next year, and interest rates suddenly rose 2% higher before new debt was issued, it would cost the government a lot more in new interest payments.

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