Good credits with credit market history may not find the credit markets much different, perhaps a little more expensive.
New or “story” credits on the other hand are finding the credit markets less receptive. They’re facing higher rates and tighter covenants if finding financing at all.
This bifurcation is a typical sign that the credit market has passed its peak. The slope of the decline in credit market conditions is not yet visible.
As borrowers realize the credit market has passed its peak, there’s often a rush to catch near peak deal terms.
As we’ve reported in prior posts, the lender community has a finite bandwidth for considering new loans. Larger and higher quality credits will get attention. At some point in the crush for financing, new or weaker credits may simply get squeezed out of consideration for lack of time and attention.
As noted in the linked articles, we may be seeing this already.
If your company is contemplating refinancing or is facing maturities this year or next, it may be wise to get into the credit market sooner rather than later.