That bank loan

Gary L · 30-09-2008, 10:25

seeing all the banks and everyone are short of money now. will the bank that Virgin owes money to want it all back sometime this week?

**Chris** · 30-09-2008, 10:27

LOL ... there's a thought.

But no, they won't call in the debt, because they know VM can't pay it except in the agreed installments. If they insisted on getting their dough back, VM would simply file for bankruptcy protection in the US, where its shares are traded. This is how NTL avoided going under a few years back.

mr,m · 30-09-2008, 10:34

Notice you have a stop chat speak thing,but you started with a very good LOL!
Lmao!

**Chris** · 30-09-2008, 10:39

Quote:

Originally Posted by mr,m

Notice you have a stop chat speak thing,but you started with a very good LOL!
Lmao!

ROFLMAO in fact.

What can I say, I watched something on ITV recently, I must have been infected by chavviness.

30-09-2008, 11:04

That would be a bad thing *ponders*

Raistlin · 30-09-2008, 11:20

Doesn't seem to be anything to do with VM Internet, I'm gonna move this to 'Lifestyle'.

SMHarman · 01-10-2008, 16:06

Quote:

Originally Posted by Gary L

seeing all the banks and everyone are short of money now. will the bank that Virgin owes money to want it all back sometime this week?

---------- Post added at 11:06 ---------- Previous post was at 11:06 ----------

Quote:

Originally Posted by Chris

LOL ... there's a thought.

But no, they won't call in the debt, because they know VM can't pay it except in the agreed installments. If they insisted on getting their dough back, VM would simply file for bankruptcy protection in the US, where its shares are traded. This is how NTL avoided going under a few years back.

The problem comes when the loan needs to be rolled over and renegotiated. Corporate credit facilities are often revolving facilities which are not expected to be paid down, rather interest is paid and they are renewed every few years.
Now come next renewal VMs credit rating may not have decreased but the banks may find it harder to pull together such lumps of capital and will want to charge more money, VM will have to recoup their higher interest charges with higher bills. This is a good example of how the banking problems will impact corporations and in turn consumers.