CFOs prepared to meet credit crunch head on

Most chief financial officers (CFOs), at 58%, among some of UK’s major companies now believe the credit crisis will adversely affect their businesses in 2008 – a significant deterioration on September, when 42% of CFOs expected a negative impact.

But the CFO survey also suggests most major corporates are well placed to meet scarcer and more expensive bank credit head on – they have internal and external financial resources available to draw on in a prolonged credit squeeze.

In all, 52% of CFOs said they were optimistic about their ability to find alternatives to bank borrowing, such as capital markets debt and public and private equity. In addition, a vast majority, at 95%, said they had additional financial resources such as undrawn facilities, cash and saleable assets, which could be used to fund the business over the next 12 months, should the need arise.

Moreover, two-thirds of CFOs said they did not need to undertake any significant refinancing of debt or bank credit for more than a year and some had no near-term refinancing needs in the next two years.

Further reading:

Financial power list 2008

Annual reports face harsher auditor scrutiny