Daily News: February 8, 2012

Phoenix Survey: Lenders Mixed on Economic Signals


Results of the fourth-quarter Phoenix Management “Lending Climate in America” Survey signal that lenders’ indicate optimism towards economic growth, but expectations regarding major economic indicators declined as compared with the previous quarter.

Lenders expectations for the economy’s growth prospects in the next six months yielded an uptick compared to the previous survey. As a result of the current economic outlook, lenders economic growth expectations increased by approximately a quarter of a letter grade, or 25 basis points, to D+ levels compared to the previous survey. The majority of lenders (71%) believe the economy will perform at a C level or better over the next six months, compared to only 52% in the previous survey. The quarterly rate of change signifies a 16% increase versus Q3/11, while the annual rate of change yields a 7% decline compared to the same quarter in the prior year.

Lender sentiment of maintaining their current loan structures increased slightly from the previous quarter. The percentage of respondents planning to maintain their loan structure increased to 78%, four points higher compared to the previous quarter. Lenders who expect to tighten their loan structures increased by only one point versus the previous quarter (10% in current survey versus 9% in Q3/11). The rate of lenders expecting to relax their loan structures declined to 12%, five points lower than the previous survey.

“I was not surprised at the mixed results from lenders this quarter,” said Michael Jacoby, Phoenix Senior Managing Director and Shareholder. “Lenders have been first-rate at predicting what we’ll see in terms of lending practices as well as the economy in coming months.”

To see the full results of Phoenix’s “Lending Climate in America” Survey, click here.

Phoenix Management Services provides turnaround, crisis and interim management, specialized advisory and operational due diligence services for both distressed and growth-oriented companies.