Many companies in the energy industry face serious liquidity risks today. While access to the capital markets remains spotty, many energy companies are addressing their liquidity needs by selling assets and reducing cash outflows (e.g., deferring or curtailing capital expenditures). Many energy companies are also turning to the bank market for help. Beyond drawing funds available under existing credit lines, companies are entering the bank market to amend loan terms, extend maturities, arrange new facilities, and replace lenders and letter of credit providers whose creditworthiness has deteriorated. But tapping the bank loan market is easier said than done in the current environment. Despite many challenges, however, advance planning to deal with recent market issues and trends can facilitate this process.
For more, read the full article, The Bank Loan Market: Practical Advice for Energy Companies.
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