Companies urged to issue shares to refinance

As the agencies become stricter companies with large debts face being downgraded and struggle to borrow or find their bonds losing value, leaving finance directors with few options but to issue more shares to raise cash.

Last week, researchers at investment bank Goldman Sachs said the debt rating agencies are actively reviewing their corporate rating procedures.

Chemicals giant ICI last week issued £800m of new shares at a 45% discount to alleviate its £3bn debt. Evidence suggests other UK companies whose balance sheets need repairing will attempt to reduce debts by raising capital in the same way.