Sponsors mull cost of turning to state support schemes

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By Owen Sanderson
11 May 2020

With leveraged companies largely shut out of central bank bond buying and price support schemes, sponsors are mulling government-backed lending schemes in several European countries, as they seek to show other creditors that they have abundant access to liquidity. But the schemes often come with strings attached, which could do nearly as much damage to a sponsor's investment thesis as a restructuring.

Europcar, a car rental company partly owned by French private equity group Eurazeo, has been an early user of these rescue loans. Car rental firms have faced a sudden stop in revenues, with Avis raising rescue finance in the bond market, while Hertz has just a short ...

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