Cash-rich corporates turn lenders, Reuters reports

Reuters reports that large, cash-rich corporates have recently begun lending to cash-strapped banks through the repo market, with Johnson & Johnson, Pfizer and Peugeot some of the latest investment grade corporates to establish repo programmes. The article quotes an unnamed source as saying that corporates now provide 25% of some funding deals.

Cash-rich corporates represent one of the few available sources of funding for European banks, which have largely stopped lending to each other, the article notes. For the industrial companies, repo represents a safer alternative to placing money on unsecured deposit with a bank.