What will be the primary purpose of your refinancing?
85% of automotive respondents view credit availability as stable or improving.
Survey respondents had a positive outlook on access to capital.
Credit conditions improve globally
The automotive panel believes that credit conditions continue to show signs of improvement, compared with six months ago. Automotive respondents are also more optimistic than the broader global group of respondents.
What is your level of confidence in credit availability at the global level?
Global deleveraging trend moderates
Over the last six months, many automotive companies took advantage of improved credit conditions and a favorable rate environment to modestly increase leverage.
What is your current debt-to-capital ratio?
With capital structure optimization already in place and earnings growth expectations increasing, 78% of automotive respondents expect their debt-to-capital ratio to decrease or remain constant over the next 12 months.
How do you expect your debt to capital ratio to change overthe next 12 months?
Refinancing activity slows, despite attractive capital conditions
The majority of respondents (77%) do not intend to refinance debt over the next 12 months, up from 68% in October 2011. Companies considering financing transactions are focused on optimizing their capital structures and reducing their overall cost of capital, through rebalancing debt and equity levels, extending maturities or shifting short-term bank lines of credit to other forms of debt financing, such as private placements.
Cash remains the primary source of deal financing in automotive
Automotive companies have continued to build cash reserves. Over half (59%) of the automotive respondents indicated cash would be the primary source for deal funding in the next 12 months. Following this trend, Western Europe and Asia-Pacific predominantly favor cash at 61% and 67%, respectively. Conversely, North America primarily favors debt at 43% to fund an acquisition.
What is your likely primary source of deal financing in thenext 12 months?
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