Financial covenants and corporate financing

2009

With the economic and financial crisis in full swing, it is harder than ever for companies to secure loans. Banks will now only grant loans where there is limited risk of companies defaulting. Over the coming 6 to 12 months, most companies are expecting it to get even tougher to secure debt or equity. One way they can still access funds, however, is via creditor protection mechanisms such as financial covenants. These are the findings of a new study published by Roland Berger Strategy Consultants entitled "Financial covenants and corporate financing". It draws on the results of 500 interviews with the CFOs of leading companies.