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US revolving credit drawdowns grow to $215B via 382 loan issuers

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US revolving credit drawdowns grow to $215B via 382 loan issuers

The tally of U.S. corporate entities drawing upon existing revolving credit lines since March 5 grew by $1 billion yesterday as companies continue efforts to shore up liquidity amid the coronavirus crisis.

The revolving credit drawdown total since March 5 when LCD began tracking this info is now $215 billion, via 382 credit facilities. Historically, these revolving credit 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."

Joining the drawdown list yesterday of companies that have tapped an RC line since March 5: Red Robin International Inc., Levi Strauss & Co., and MSC Industrial Direct Co. Inc., among others.

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The Consumer Discretionary sector continues to comprise the bulk of the revolving credit drawdowns, with nearly half the $215 billion coming via that sector.

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Drilling deeper into that segment, automakers continue to dominate.

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While the bulk of loan issuers drawing on revolving credit since March 5 are investment grade, lower-rated entities those at single-B, triple-C and unrated make up 23% of the activity (by volume).

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The bulk of the revolving credit lines being drawn down, in the leveraged segment of the market most notably, mature in 2023-24.

This data is sourced from available SEC filings. It is not an exhaustive list of all RC drawdown activity.

LCD updates revolving credit drawdown activity daily.

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