Saturday, March 14, 2009

The Debts of the Spenders: The 2009 Corporate Credit Crunch

Many corporate loans, either in the form of bonds or private bi-lateral contracts w/banks and trade factors, are coming due in 2009 and early 2010.

Outside of the fantasy arena of the equity markets, CFOs of smaller companies - including those which are privately held - have increased their bearish tone. Bankers and other commercial lenders are turning up the screws on preexisting debt covenants and other business terms more strictly. Unlike the chosen few on Wall Street, they have to secure loans under more onerous terms such as loans as much as 300 to 400 points above LIBOR.


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