Commercial lending

Direct lenders around the world are talking with borrowers about easing interest payments, waiving penalties and relaxing covenants as they assess the growing damage to their portfolios caused by the coronavirus pandemic.

Draw-downs on C&I credit more than quadrupled in a seven-day period ended March 25. Lenders may try to rein them in if the crisis drags out, but legal precedent isn’t on their side.

While LendingClub, Prosper, Avant and SoFi are giving existing borrowers breaks in the short term, they're considering tightening credit as the coronavirus outbreak threatens to drag the economy into a recession.

With seven in 10 rooms sitting empty amid the coronavirus outbreak, hotel and banking groups are urging policymakers to open up the Term Asset-Backed Securities Loan Facility.

The amount of distressed debt in the U.S. has quadrupled in less than a week to nearly $1 trillion, reaching levels not seen since 2008 as the collapse of oil prices and fallout from the coronavirus shutters entire industries across the globe.

Dramatic Fed intervention may steady some markets, but unless something changes — and, judging by the last two weeks, it very well could — the central bank won’t be there to save fallen angels. Which brave investors will step up?

Red flags and warning signs from February should have prompted investors to make “all the wise decisions" at that time, says Ville Talasmaki of Finnish financial group Sampo Oyj.

The Federal Reserve committed Monday to conducting more asset purchases of Treasury securities and mortgage-backed securities and announced $300 billion in new financing for credit facilities.

While collapsing market prices do not present immediate worries for CLO managers, the prospect of future downgrades and defaults becomes more problematic.

With small businesses feeling the financial scourge of the coronavirus, bridge loans could be the direction they turn to keep things afloat.