They could do that by paying down debt if they could raise new capital, which would be very difficult for an energy company right now from a debt market offering, or they could try to sell an asset, if they can’t reduce the overage, then that’s a default.

Sharon Bonelli

Categorized in : Business

Fully drawing down an asset-based loan revolver is a very strong indicator that some sort of bankruptcy or restructuring is coming for troubled commodity sector companies.