Prepare for the Era of Scarce Capital

There is no question that corporate finance executives have weathered an unprecedented disruption in the banking industry. Borrowing costs have increased significantly in 2009. Debt pricing has increased substantially for investment grade companies (from 53 basis points more than LIBOR to 185 basis points more than LIBOR). Debt maturity dates have decreased from an average of three to six years to one year or less, indicating bank unwillingness to take on any risk.

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