Mack67 you have no idea.Companies do not borrow at cash rates....

Mack67 you have no idea.


Companies do not borrow at cash rates. The borrow at spreads.
I.e. their cost of debt can be described as LIBOR + spread.

LPTs six months ago borrowed at around LIBOR + 100bp (the spread). Today that spread has risen to 900bp! Hence with Centro rated around the BB or BBB level their cost of debt is around 14% (Libor of 5% and spread of 9%).

Have a look at www.markit.com. Go to indices and the have a look at CMBX. Centro is rated around the BBB and BB level.


Please do a little research first.