The days of easy money on the financial markets are well over. Today, the credit tap can suddenly close, as the Clariane group of retirement homes has had the bitter experience. The former Korian thought it had found resources to repay its debts falling due between December 2023 and December 2024. All it took was one piece of bad news and the expected money disappeared, forcing the company to urgently organize a plan rescue cost of 1.5 billion euros with the support of its largest shareholder, Crédit Agricole, as it announced on Tuesday, November 14.
Everything happened in a few weeks. “We thought we had done the hard part by signing an agreement in July with twenty-one banks to renew our credit lines. But this proved insufficientrelates Philippe Garin, the financial director. The public and private debt markets in which we used to finance ourselves all closed within a few months. And the banks cannot replace them, because they are constrained by the European Central Bank [BCE] to reduce their exposure to poorly or unrated issuers, like us. They accompany us, but they cannot do everything. »
Clariane nevertheless intended to find capital from financiers ready to invest in her real estate assets. An operation of this type was to be completed on October 31. Alas, on October 24, the Stock Exchange reacted very badly during the publication of the group’s quarterly results, with the latter recognizing that its debt reduction was taking longer than expected. “The Clariane share lost 40% in two sessions and investors preferred to put the real estate operation on hold”, continues Mr. Garin. And to conclude: “We have gone in the space of fifteen months from a world where we normally had access to all debt markets, without abusing them, to a situation where we had a liquidity risk in April 2024.” Dizzy.
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Clariane’s difficulties illustrate the violent reversal that has occurred in the debt markets. For more than ten years, businesses have benefited from almost free and abundant credit, linked to the ultra-accommodating monetary policy of central banks. Against a backdrop of zero or even negative interest rates, investors agreed to take risks to earn a little return by lending to borrowers of lower quality than LVMH or Nestlé.
This world turned upside down in 2022, when central banks sharply raised rates to combat the surge in inflation, following the breakdown of supply chains after Covid-19 and then the war in Ukraine. In November, the five-year US government bond yielded 4.5%. And that changes everything.
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