Nemaska Lithium Inc NMKEF

long term borrowing at zero rate :)

[Tcheck]

if apple and google can IQ can
really nmx has a fake problem
of refinancing

By Mike Dolan
    LONDON, Aug 7 (Reuters) - For all the corporate minefields
left by this year's pandemic, central banks have succeeded in
making borrowing for the world's most robust companies virtually
free - underlining the V-shaped rebound in blue-chip stock
indices.
    Having rushed to head off a corporate credit crunch as
pandemic lockdowns hit, the Federal Reserve, European Central
Bank and other major central banks can now claim considerable
success in keeping the lending taps on, at least for the likely
long-term survivors of the shock.
    And to keep mountains of new government debt affordable,
near-zero interest rates and large scale central bank bond
buying are set to persist as long as it takes to see through the
shock. With top quality corporate bonds part of the intervention
menu, long-term borrowing rates across the spectrum are sinking
as the early waves of credit downgrades slowed around midyear.
    With five-year U.S. Treasury    borrowing rates
dropping to an unprecedented low of 0.18% on Tuesday, Google's
parent Alphabet    raised $1 billion of five year debt
for just 0.45% - matching Apple's 2013 deal as the lowest ever
five-year dollar borrowing rate achieved by a private company.
    To be sure, Alphabet's deal is exceptional, combining a rare
bond market foray with red-hot digital and climate themes -
funds are earmarked for green projects that put it on the radar
of fund managers now desperate for investments badged as
'Environmental, Social and Governance' compliant.
    But of course Europe's top companies have had access to even
cheaper borrowing for some time.
    With ECB policy rates in negative territory, 12.2 billion
euros of corporate bonds with zero percent coupons have been
sold by some 17 companies including Siemens   , Deutsche
Bahn and Nestle    this year, according to data from
Refinitiv IFR.
    For many multi-asset portfolio managers, investment grade
credit has been the sweet spot of the recovery to date as it
combines elements of safety and central bank support with some
yield pickup and a corporate recovery.
    Unlike the S&P500   , exchange traded funds tracking the
Markit iBoxx dollar investment grade corporate bond index
   have already recaptured the circa 30% plunge of
early March and surpassed early year peaks by some 5% to mark
record highs.
    Global investors such as giant asset manager BlackRock
continue to recommend a "strategic overweight" in investment
grade credit as yield spreads do compensate for the risk of
defaults and downgrades.
    Pictet Asset Management also said this week it remained
overweight U.S. investment grade despite ever decreasing yields.
"Official determination to support businesses by ensuring their
access to cheap finance isn't likely to end soon," said chief
strategist Luca Paolini.
 
 
    LANDMINES
    The market is clearly willing to lend to high-quality firms
expected to emerge from the pandemic shock. So will that lead to
a borrowing binge among companies?
    "If the Fed was worried about corporate bond markets not
being open, it doesn't need to worry now. Corporate debt
issuance is off the charts," said Morgan Stanley's multi-asset
strategist Andrew Sheets.
    But he stressed that credit ratings remained an important
restraint on the lapping up of cheap credit because, outside the
cash-rich tech sector that's been lifted further by lockdowns,
many companies entered the pandemic with historically high
leverage.
    That's where the landmines lie, and the loss of an
investment grade rating can lead to a substantial rise in
borrowing costs.
    Credit rating firm S&P Global's 2020 count of so-called
'fallen angels' - borrowers downgraded to 'junk' from investment
grade - was 34 issuers accounting for more than $320 billion in
rated debt, including Ford   , Rolls-Royce   , Kraft
Heinz   , Renault   , Delta Air Lines   ,
Lufthansa   , British Airways    and Macy’s   .
    While the pace of downgrades has eased through midyear, S&P
also has a record 126 potential fallen angels on a warning -
with another $576 billion of bonds at risk.
    With central bank support a critical factor in preventing
those mines exploding, some asset managers are more nervous.
    "Central banks will be very prudent when removing any
accommodation to avoid any disruption," said asset manager
Amundi. "But the intensity of policy actions may fade."
    "Many companies will have to deleverage from the huge debt
accumulated and many will not survive," it added. "In H2,
solvency issues will move to centre stage and investors should
have sufficient portfolio liquidity and good quality assets."

[TicTacTo]

Albemarle loan US$900M last year to invest in AUS spodumene mine, if winning bidder a solid company should have access to loan. We should expect winner will be a large well capitalized company.