New wave of refinancing proposals hit the City
While at the moment the likes of Lloyds bank and Royal Bank of Scotland are grabbing the headlines with regards to refinancing proposals, we are starting to see many other companies looking towards the stock market and the money markets to refinance their debts and rebuild their balance sheets. However, this is coming at a time and UK banks are reluctant to push more liquidity into the marketplace and there are concerns we could see a credit crunch part two.
Even though a number of refinancing arrangements have been agreed over the last few weeks, the small wave of requests has now built up and each day brings more rumours of new refinancing arrangements and proposals. In a case of first come first served, there are concerns that as more companies look to the banking sector for refinancing, the funds available in the future will be reduced and banks will become more "choosy" about who they support.
There is no doubt that there are a number of well-known institutions in the UK which are in need of refinancing and many, under the surface, have very strong businesses. However, short-term financial requirements may well lead to pressure on balance sheets and increased interest charges which will hold back company probability and a recovery in the UK economy.
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