Tuesday, March 24, 2009

Larry Will Be Happy To Read This

Porsche may be in technical default by midnight. Granted the chances are slim but it would be a fitting conclusion to Volkswagen squeeze saga. The company has a €10 billion loan refinancing due by midnight and is currently scrambling to find last minute cash to complete the deal. Market sources say the automaker has only managed to obtain €8.55 billion in commitments from banks and is facing a €1.45 shortfall. Unless banks cough up the balance, Porsche will be forced to fund the difference out of its own cash. Luckily the company does have a lot of it, compliments of many hedge funds, but that action would not be perceived well by the capital markets. Then again, the company may have no choice as a failure to refinance will lead to a technical default on the term loan, although the last thing we would advise here is to short Porsche. Sphere: Related Content
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Anonymous said...

Porsche Secures EU 10 Billion Loan

The credit line will be guaranteed by a group of 15 banks including Barclays Capital, Commerzbank, LBBW, Deutsche Bank, UBS, Credit Suisse, Santander, BayernLB, BNP Paribas, Calyon, UniCredit/HVB, Helaba, Intesa, WestLB und DZ-Bank.

The company said it secured two tranches over 12 months with the right to extend 6.7 billion euros for a further year.

15 Banks! The peanut butter is getting spread thin.