Partner Erika Morabito was quoted in the WWD article, “Retail Groups Implore Gov’t for Credit, Economic Relief.” The article noted that retailers around the country are asking for help as the COVID-19 pandemic is causing them to shutter stores for public safety.
Under these type of catastrophic circumstances, many retailers are drawing down on their revolving lines of credit, which highlights the National Retail Federation’s push for the government to enable more access to credit. “Typically what you see is that retailers will have lines of credit with lenders and usually, given the financial stability of a company, lenders provide flexibility within those lines of credit,” Morabito said. “Now, when they’re drawing down, there could be a covenant default, within their underlying loan documents,” because of falling revenues.
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