US companies need to refinance $513 bln this year

* US companies face $513 bln in debt refinancing this year

* In Europe, refinancing need seen at $569 bln

* Smaller companies may face more difficulty refinancing

By Emily Chasan

NEW YORK, Jan 25 (BestGrowthStock) – U.S. companies will need to
refinance some $513 billion in corporate debt this year,
increasing the potential for a corporate cash crunch, according
to a study from restructuring firm AlixPartners.

The study, which looked at debt held by 1,200 U.S.
companies, suggests companies will keep the bond offering
market busy to raise cash and control spending to deal with
looming debt maturities and refinancing needs, said Peter
Fitzsimmons, AlixPartners’ president of North America.

“I think we have learned to understand this year that the
financing markets can shift quite quickly,” Fitzsimmons said.

“The jury is still out as to whether the high yield and
bond markets will continue to support this level of
refinancing.”

Fitzsimmons said the credit markets did a “180-degree” turn
last year, going from no activity to hyperactivity and that,
while the credit market activity currently shows no signs of
slowing, companies could easily face tighter conditions in the
second half of the year.

“Mid-size and large companies are finding it easier to
refinance now, but smaller companies are still finding it to be
a very tough credit market,” Fitzsimmons said. “Bond offerings
will be less available to smaller companies.”

Fitzsimmons, whose firm specializes in corporate
turnarounds, said struggling companies will have to look at
what they can do to generate more cash internally, make working
capital improvements and focus on cost reductions to boost cash
to pay off debt and make themselves more attractive to lenders
who could help them refinance.

AlixPartners said it found in another study that 600 major
companies in the UK, France, Germany and Italy are facing $569
billion of debt that will be up for refinancing this year as
well.

All of this comes before what some turnaround experts call
the “wall of debt maturities” from late 2011 through 2014,
which could lengthen the line for refinancing. Many companies
have also “rescheduled” their debt obligations this year,
pushing them out to 2012 and beyond as lenders have been
willing to amend and extend loans in recent months.

“My suspicion would be in the latter part of the year there
will be a much tougher credit environment,” Fitzsimmons added.

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(Reporting by Emily Chasan; editing by Andre Grenon)

US companies need to refinance $513 bln this year