As the Covid-19 pandemic began ripping through global markets and economies, corporates acted quickly to ensure they had enough liquidity to protect their businesses, remembering the lessons learned from the 2007-09 financial crisis. And while not all crises play out in the same way, ready access to liquidity is one way for corporates to increase their chances of survival.
Corporates’ first response was a “flurry of drawdowns” against revolving credit facilities, early on in the pandemic, according to Matthew Davies, head of global transaction services, Europe, the Middle East and Africa (EMEA), and global co-head of corporate sales at Bank of America (BofA). “In the next phase, corporates were eyeing the relatively cheap debt in the markets and saw that they could lock in good long-term funding, which resulted in a bout of issuances, with some then deciding to pay back those credit facilities,” he says.
