Blog: My debt is my bond
Dean Best | 16 December 2008
The credit crunch has started to play second fiddle to the frontline battle against falling consumer sales and rising unemployment on the world’s financial pages of late, as the economic gloom spreads from the finance sector to broader consumer industries.
But, startling figures I saw today on the BBC website suggest that the ability of (or should I say failure of) businesses to be able to negotiate funding from their banks will bring the credit crisis storming to the front of the agenda once more.
The figures, reported by Robert Peston, the BBC’s business editor, are from the Bank of England’s quarterly bulletin and show that, in 2009, there will be a massive bulge in the value of bonds issued by European companies that have to be repaid.
Peston says that close to US$1000bn of what he terms "old world" companies' borrowings in the form of tradable debt has to be paid back during the next 12 months - with something like $800bn of this owed by financial companies and $200bn by non-financial companies.
“That would be a colossal sum to pay off at the best of times, and is equal to about five times what's been repaid in 2008. It is a disturbingly huge amount, at a time when even the bluest-of-blue-chip companies are finding it difficult and expensive to raise money by selling new corporate bonds,” he says.
There is of course plenty of talk about government bail-outs already for car and steel manufactures, but the prospect of these safety nets being extended to other more unexpected industries is rising.
Danone completed its US$12.5bn acquisition of WhiteWave Foods this week. The move will roughly double Danone's presence in North America, where WhiteWave is a top four dairy player. ...
Premier Foods plc revealed today (28 March) it has secured a deal with its pension scheme trustees that will see the UK food maker reduce its pension burden....
Hain Celestial, under the scrutiny of the investment community in recent months and facing some challenges in its domestic market, has announced another shuffling of its management pack....
FrieslandCampina, which today served up higher profits but lower sales for 2016, is ready to offload the last non-dairy business owned by the Dutch cooperative giant....
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