C&I Lending is approaching 2008-09 levels, tightest levels ever recorded, which historically results in a “Flight to Quality”. Two (2) important takeaways:
1. Banks will/should ‘protect’ their best lending relationships – those borrowers with self-sustaining capital and liquidity and an inherent ‘value-offering’; and
2. For under-performing borrowers, the probability of an “Exit” via a refinance is extremely LOW.
Image Source: Federal Reserve