Bank of America starts asking clients for coronavirus contingency plans

Bank of America starts asking clients for coronavirus contingency plans

(Reuters) – Bank of America Corp (BAC.N) is asking clients about their coronavirus exposure and preparations as part of its evaluation process of which deals to underwrite, according to sources.

The additional layer of risk assessment is aimed at helping prevent the bank from losses on deals, like bond issuances, the sources said.

It comes as coronavirus spreads quickly around the world and is forecast to dent global economic growth. The Institute of International Finance (IIF) downgraded its economic growth forecast for the United States and China on Thursday, while warning that world growth could reach its weakest since the global financial crisis.

Confirmed cases of the illness surpassed 100,000 across the world on Friday as the outbreak reached more countries.

Equity markets have plunged as uncertainty about how and for how long the pandemic will impact companies and the economy.

The S&P 500 .SPX swung wildly this week and the volatility has kept many corporates which would have been interested in raising equity capital on the sidelines.

However, lower interest rates fueled by the Federal Reserve’s emergency rate cut on Tuesday has increased corporate appetite for issuing and refinancing debt. Total debt deals totaled $30 billion in the first week of March compared with roughly $90 billion in all of February, according to IFR data.

Bank of America participated in roughly 20 investment-grade debt deals this week, a source said.

Source: Reuters

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