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Corporates shift away from debt-driven strategies

Here's a report from the UK:

Most major UK companies have alternative funding resources already available to them that they could draw on in the event of a prolonged squeeze on debt finance. Many UK CFOs continue to favour bank credit as a source of external finance for their business, where there is a need to raise a new financing or undertake a refinancing. Only 44 per cent now favour this as a source of financing, however, compared to 73 per cent three months ago.

Regardless of the funding situation, there is now evidence that UK corporates are increasingly feeling the effects of the credit crunch. Three quarters of CFOs said that events in credit markets have raised the price of credit and two thirds said it has reduced credit availability. Ian Stewart, associate director of Deloitte Research, commented, “CFOs are saying that the effects of the credit crunch have fed through the banking system and are affecting the corporate sector. Events in credit markets seem to be beginning to reshape strategic and funding plans of corporates, and in particular, their attitudes to debt.”