An increasing number of U.S. companies are selling bonds to repay lines of credit they drew down at the height of the coronavirus-induced market turmoil, an indication that the cash crunch facing much of Corporate America may be easing, according to Bank of America analysts.
Lenders faced requests from more than 170 U.S. companies to draw down on more than US$120 billion in prearranged credit lines in recent weeks, according to Bank of America estimates, as corporate executives rushed to buttress their firms' finances.
"Of course the main reasons are not just favorable developments around COVID-19 but also policy responses," Mikkelsen said, referring to the unprecedented spending and credit support programs to mitigate the economic impact of measures to stop the pandemic's spread.