Loan participations: key to larger loans at lower rates
Article Abstract:
Bank loan participations offer significant benefits for corporate borrowers. By participating in both short-term and long-term loans with banks, corporations can achieve lower borrowing costs and the ability to take larger loans than would be available from a single lender. Ways in which banks are designing loan participations include: offering an uncommitted short-term line of credit to a corporation, and then finding other banks wanting to participate in the credit; and traditional, long-term loans where several banks take part in the loan, either retaining the shares themselves or selling some to institutional investors. There has been a reluctance on the part of some investors to participate in unrated loan participations. A way around this would be to have the loans rated, but the cost of a rating and other factors can make the cost of a rated loan package the same as a standard bank loan to a corporate borrower.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1988
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Lenders watch closely as insurance firms take you to the cleaners
Article Abstract:
Rising prices for corporate insurance have begun to affect corporations' ability to obtain financing, since major lenders are not granting loans to businesses that are either paying too much for their insurance coverage or are 'going bare'. Loan officers and their committees are investigating companies' exposure to liability in areas of officer and director insurance, product liability insurance, environmental impairment insurance, and commercial multi-peril insurance. In addition to scrutinizing certain forms of coverage, banking institutions are studying the liability claims records of various lines of business, with the result that certain types of enterprises (such as day care centers, ski equipment manufacturers, automobile makers, food processors and distributors, and consumer products marketers) are finding it more difficult to obtain credit and financing arrangements.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1986
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Banks shave loan rates in bidding war for corporate business
Article Abstract:
Money center banks maintain their leadership in competitive loans by reducing their margins to as low as 10 basis points. Some regional banks are also lowering margins to compete for corporate loans. The as-offered bid option does not obligate banks to offer lower rates like the formal bid programs for large corporations, but most banks will do so rather than lose business. The reluctance of some banks to lower rates can be countered by changing revolving credit agreements to include an as-offered option.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1988
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