Q: Sorry another Go Easy question.
What will Go Easy’s future borrowing costs be going forward? My understanding is that they issue bonds for longer term borrowing and have a syndicate of banks for short term credit. Will this kill any prospects for recovery once the bad debts work their way through the system?
What will Go Easy’s future borrowing costs be going forward? My understanding is that they issue bonds for longer term borrowing and have a syndicate of banks for short term credit. Will this kill any prospects for recovery once the bad debts work their way through the system?
5i Research Answer:
Borrowing costs will increase, as creditors re-examine its risk profile in the face of higher losses and its much smaller size. This may be offset (a bit) if interest rates move lower). This may not 'kill' a recovery but will likely slow growth. Regardless, we think growth is the least of its concerns right now. It needs to stabilize its operations and get credit quality under control.