April 18, 2008
The Liquidity Crunch Hits Talbots & Sears
Dale's post below brought to mind an example of the liquidity crunch and banks wanting to stay on the sidelines. Here's the report from the AP:
According to a filing with the Securities and Exchange Commission, Talbots said HSBC will phase out its $135 million line of credit over several months, while Bank of America canceled its $130 million credit line.
Oppenheimer & Co. analyst Roxanne Meyer said this news means that Talbots will have a tough time finding a new form of financing.
"With two major banks walking away, it won't be easy and financing will not be cheap," Meyer wrote in a client note.
Talbots, a relatively upscale retailer, has been in hard times for a while; nonetheless, the banks are under pressure of their own to shore up their balance sheets.
In a similar move, B of A has decided not to renew Sears' $1B line of credit.
Posted by Paul Rose
April 18, 2008 | Permalink
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