Companies are looking for cash just as many others. The last couple of days we’ve seen a variety of companies announcing entries into agreements (8-K, item 1.01) to borrow money. Many of the agreements include multiple notes for different due dates. Here is a sample of a few agreements:
|Company||Ticker||Amount Raised ($M)||Due Date||Rate||Date Announced|
|Darden Restaurants||DRI||$270||04/05/2021||LIBOR + 300bp*||04/07/2020|
|J M Smuckers||SJM||$500||2030||2.38%||03/10/2020|
* As of 4/9/2020 USD LIBOR - 12 months is 1.05088 %
The interest rates for similar due dates and amount vary significantly. The differences are likely due to the companies’ negotiating power, the lenders’ perceived risk and other terms of the agreement.
The amount of activity with companies raising money, based on this anecdotal sample, may imply that debt market liquidity is not an issue. Even restaurant related businesses are raising money at a rate of about 4%.
Keep on checking Calcbench for new agreements. You can always create an alert to get notified when new agreements are coming in by going to our alerts page and checking off the 8-K material agreement.
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