latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/another-5-7b-of-rc-drawdowns-as-us-companies-eye-coronavirus-liquidity-57826825 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

In This List

Another $5.7B of RC drawdowns as US companies eye coronavirus, liquidity

Key Credit Risk Factors When Assessing Banks In The Context Of COVID-19

Street Talk Episode 61 - Investors debate if U.S. banks have enough capital in post COVID world

You Down With PPP? Consider The Risks

Street Talk Episode 60 - You Down With PPP? Consider The Risks


Another $5.7B of RC drawdowns as US companies eye coronavirus, liquidity

The tally of U.S. corporate entities drawing upon existing revolving credit lines since March 5 grew by $5.7 billion yesterday as companies continue efforts to shore up liquidity amid the coronavirus crisis.

The RC drawdown total since March 5 when LCD began tracking this info is now $160.6 billion, via approximately 260 credit facilities. Historically, these RC lines could go largely undrawn, and might be used for working capital, as a backup line of credit, or for corporate cash emergencies.

Many of these debt issuers have cited in SEC filings the coronavirus as the reason for tapping these lines, along with an "abundance of caution."

SNL Image

Auto makers have been most active here, tapping roughly $32 billion in RC lines, though General Motors Corp. accounts for half of that amount. GM last week said it was taking aggressive steps to preserve liquidity during the coronavirus crisis.

SNL Image

More broadly, Consumer Discretionary concerns account for more than half the drawdowns, followed by Industrial concerns, which are a distant second, at 10% of the drawdowns, according to LCD.

SNL Image

Higher-rated, BBB corporates continue to account for the bulk of the drawdown activity, with lower-rated single-B issuers, and unrated issuers, accounting for 18% of the activity.

These lower-rated issuers are under particular scrutiny now as the specter of downgrades is of considerable concern in the U.S. leveraged loan market because CLOs by far the largest single investor segment in the $1.2 trillion asset class have thresholds as to how much CCC rated debt they can hold (usually that's 7.5%).

SNL Image

The RC drawdowns begin to mature in larger numbers in 2022, ramping up sharply in 2023-24.

Request a free trial of LCD to see more stories and historical data

Follow LCD on Twitter.

LCD comps is an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.