{"id":336042,"date":"2011-03-24T18:42:20","date_gmt":"2011-03-24T18:42:20","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/03\/24\/big-banks-hunger-for-corporate-debt\/"},"modified":"2011-03-24T18:42:20","modified_gmt":"2011-03-24T18:42:20","slug":"big-banks-hunger-for-corporate-debt","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/03\/24\/big-banks-hunger-for-corporate-debt\/","title":{"rendered":"Big banks hunger for corporate debt"},"content":{"rendered":"<p><div readability=\"105.470006184\">    <!-- KEEP --><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.ghanamma.net\/wp-content\/uploads\/2011\/03\/c87ac97cssuance.top_.gif.gif\" alt=\"chart_corporate_bond_issuance.top.gif\" width=\"475\" height=\"300\" border=\"0\" class=\"cnnstoryImageFull\" \/><span><b>Corporate lending is back on the rise, largely for investment-grade firms.<\/b><\/span><span id=\"fb-recommend\"\/><br \/>\n<span>By Ken Sweet, contributing writer<\/span><span>March 24, 2011: 2:30 PM ET<\/span><!--startclickprintexclude--><br clear=\"all\"\/><\/p>\n<p>NEW YORK (CNNMoney) &#8212; Looking for a loan? If you&#8217;re a company with a decent investment grade rating, you&#8217;re in luck.<\/p>\n<p>Earlier this week, &#8220;A&#8221;-rated AT&#038;T (<a href=\"http:\/\/money.cnn.com\/quote\/quote.html?symb=T&#038;source=story_quote_link\">T<\/a>, <a href=\"http:\/\/money.cnn.com\/magazines\/fortune\/fortune500\/2010\/snapshots\/2756.html?source=story_f500_link\">Fortune 500<\/a>) lined up near-record amounts of debt for its <a href=\"http:\/\/money.cnn.com\/2011\/03\/20\/news\/companies\/att_tmobile_deal\/index.htm\">$39 billion dollar deal<\/a> with Deutsche Telekom&#8217;s T-Mobile USA.<\/p>\n<p>JPMorgan Chase (<a href=\"http:\/\/money.cnn.com\/quote\/quote.html?symb=JPM&#038;source=story_quote_link\">JPM<\/a>, <a href=\"http:\/\/money.cnn.com\/magazines\/fortune\/fortune500\/2010\/snapshots\/2608.html?source=story_f500_link\">Fortune 500<\/a>) lent a record $20 billion in short-term financing to AT&#038;T. In addition to being a record amount for the bank, it&#8217;s also among the largest corporate loans ever issued, according to Thomson Reuters. <\/p>\n<p>That&#8217;s a good sign for the corporate debt market on several fronts. For one, it shows that banks are willing to lend money to companies that have a less-than-perfect &#8220;AAA&#8221; rating. <\/p>\n<p>Just two years ago, a company like AT&#038;T might have had a harder time securing funding. The company is sitting on only $1.3 billion in cash, leaving it no other choice than to enter the debt market for the T-Mobile deal.<\/p>\n<p>In the months after Lehman Brothers collapsed, raising money in the debt markets was even more dire. Big blue-chip firms such as Caterpillar (<a href=\"http:\/\/money.cnn.com\/quote\/quote.html?symb=CAT&#038;source=story_quote_link\">CAT<\/a>, <a href=\"http:\/\/money.cnn.com\/magazines\/fortune\/fortune500\/2010\/snapshots\/81.html?source=story_f500_link\">Fortune 500<\/a>) and Hewlett-Packard (<a href=\"http:\/\/money.cnn.com\/quote\/quote.html?symb=HPQ&#038;source=story_quote_link\">HPQ<\/a>, <a href=\"http:\/\/money.cnn.com\/magazines\/fortune\/fortune500\/2010\/snapshots\/206.html?source=story_f500_link\">Fortune 500<\/a>) struggled to raise even small amounts of debt-funded capital.<\/p>\n<p>But since the end of 2008, the number of corporate bonds with a Standard &#038; Poor&#8217;s credit rating of &#8220;A&#8221; have jumped 25.7%, according to financial product tracking firm MarkIt. And BBB-rated bonds surged 43% in the same period of time.<\/p>\n<p>&#8220;Demand for corporate bonds has been very strong, from high grade to high yield,&#8221; said Rick Rieder, chief investment officer for fundamental fixed income at the institutional investment firm BlackRock (<a href=\"http:\/\/money.cnn.com\/quote\/quote.html?symb=BLK&#038;source=story_quote_link\">BLK<\/a>, <a href=\"http:\/\/money.cnn.com\/magazines\/fortune\/fortune500\/2010\/snapshots\/11374.html?source=story_f500_link\">Fortune 500<\/a>).<\/p>\n<p>Demand for corporate debt has been partly driven by demand for yield, but also by low corporate issuance, Rieder said. Since Lehman&#8217;s bankruptcy in 2008, companies have bulked up on cash and kept corporate financing to a minimum.<\/p>\n<p>Before the financial crisis, companies raised an average of $204 billion quarterly, according to DeaLogic.<\/p>\n<p>Compare that with the fourth quarter of 2010, when investment-grade companies raised $167.2 billion. That&#8217;s also down from $191.4 billion in the same period in 2009. <\/p>\n<p>With companies interested in raising capital through debt and banks having no problem lending money to high-quality companies, Reider said he believes there could be an uptick in debt-financed M&#038;A activity this year.<\/p>\n<p>Lower credit quality companies are seeing better lending terms, but getting credit remains difficult, particularly among privately-held companies who have no access to the equity market, said Jeff Jones, a managing director with investment firm Barrier Advisors, which specializes in distressed corporate debt.<\/p>\n<p>&#8220;They&#8217;re getting the short end of the stick right now,&#8221; Jones said. And they&#8217;re not the only ones. Consumers are still struggling to secure everything from mortgages to auto loans.\u00a0<a href=\"http:\/\/money.cnn.com\/2011\/03\/24\/markets\/corporate_debt_financing\/index.htm?section=money_topstories&#038;utm_source=feedburner&#038;utm_medium=feed&#038;utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29#TOP\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.ghanamma.net\/wp-content\/uploads\/2011\/03\/0e63013ebug.gif\" alt=\"To top of page\" border=\"0\" width=\"7\" height=\"7\" \/><\/a><\/p>\n<p>First Published: March 24, 2011: 1:42 PM ET<\/p>\n<p><!--endclickprintexclude--><\/div>\n<\/p>\n<p><img decoding=\"async\" src=\"http:\/\/www.ghanamma.net\/wp-content\/uploads\/2011\/03\/c87ac97cssuance.top_.gif-150x150.gif\" \/><\/p>\n<p>See the rest here:<br \/>\n<a target=\"_blank\" href=\"http:\/\/rss.cnn.com\/~r\/rss\/money_topstories\/~3\/gvzX2_T_ltc\/index.htm\" title=\"Big banks hunger for corporate debt\" rel=\"noopener noreferrer\">Big banks hunger for corporate debt<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p> Corporate lending is back on the rise, largely for investment-grade firms. By Ken Sweet, contributing writer March 24, 2011: 2:30 PM ET NEW YORK (CNNMoney) &#8212; Looking for a loan? If you&#8217;re a company with a decent investment grade rating, you&#8217;re in luck. <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-336042","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Big banks hunger for corporate debt - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/03\/24\/big-banks-hunger-for-corporate-debt\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Big banks hunger for corporate debt - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"Corporate lending is back on the rise, largely for investment-grade firms. 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