LONDON — Automotive industry borrowers have raised $155 billion amid the coronavirus outbreak as the pandemic shutters showrooms and factories.
Companies worldwide have been drawing down on existing credit lines and seeking new credit deals to weather the health crisis, which has hit demand for vehicles.
The $155 billion gathered since mid-March, when global cities went into lockdown, is equivalent to the total issuance in the eight-month period before that.
The $44 billion in bonds sold in the period is greater than the industry’s issuance in any single quarter.
The $111 billion in loans raised in the period could match the sales of $133 billion in all of 2019, once about $18 billion of pending deals get completed.
General Motors, the industry’s biggest borrower, raised $21.6 billion of loans and sold $5.5 billion of bonds. GM, which had drawn down on a $16 billion revolving facility in March, subsequently added two more new loans. GM tapped capital markets again this month.
Automakers including Ferrari and Toyota followed suit as some industry output resumed and countries began to lift restrictions on travel.
At the same time, automakers are seeking to preserve cash, in part by suspending dividends and keeping a tighter eye on nonessential spending and capital expenses. A number of top executives have taken voluntary pay cuts.