Australian firms call for relaxed lending criteria

4 June 2009

Some 40 per cent of Australia's 500 biggest corporations have urged the country's banks to ease their lending requirements as the global downturn puts increasing pressure on refinancing terms.

The poll of the country's top corporations by turnover found four in ten are pushing for bankers to ease lending security requirements and debt covenants, the Australian Associated Press reports.

East & Partners analyst Peter Drennan told the news agency that the figures reflect the impact of the global financial crisis, as "just one year ago" no institution had the issue at the top of its agenda.

Dan Fitts, a partner at law firm Clayton Utz, recently told the Finsia corporate lending conference in Melbourne that banks are "taking every opportunity" to tighten their funding criteria and cut the length of their terms.

He said only four per cent of loans agreed in 2008 had terms fixed for between five and nine years, down from ten per cent the year before.

Meanwhile, short-term financing for less than one year collapsed from 14 per cent to less than one per cent, Mr Fitts added.

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