For some borrowers, such as individuals with large deferred compensation arrangements or who are expecting a large inflow of cash in the near future (access to trust funds becomes available, a legal settlement has been resolved and payout is imminent, etc.) this arrangement allows them to access their full borrowing potential without committing to immediate payment.
Labour may put a brave face on the prospect of a potential rise in borrowing costs.
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At a time when many potential buyers' borrowing power is iffy, sellers favor offers they know will close quickly.
As the stock market has risen from the depths of the financial crisis, only after destroying the retirement savings of countless Americans, so has a potential scourge: margin borrowing.
Another potential cause for increasing borrowing costs came Wednesday from the European Commission, which put forward proposals meant to make sure taxpayers won't again be responsible for bank bailouts.
The official investment grade reduces borrowing costs and widens the pool of potential investors.
The concluding statement of the European Council meeting of March 24-25, 2011, addressing the terms under which EU sovereigns may borrow from the European Stability Mechanism (ESM) confirms our previously published expectations that (i) sovereign debt restructuring is a potential pre-condition to borrowing from the ESM, and (ii) senior unsecured government debt will be subordinated to ESM loans.
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But the focus of criticism has shifted to the deterioration of government finances and the potential for higher future taxes, borrowing costs and inflation.
While many validly fear that the downgrade may impact borrowing costs for our country, the larger potential risk, in my opinion, could be related to the types of assets that certain institutions (i.e. banks) can hold on their respective balance sheets.
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The liquidity and trading in those older issues is so tiny that it doesn't give much guidance as to the potential cost for the government of borrowing substantial sums at what are known as ultra long maturities - but for what it's worth the 1932 war loan pays an implicit interest rate of 3.9% at its current price.
But there are enough differences in Italy's finances, and enough potential in its economy, to mean it could stay solvent if its borrowing costs could be capped at, say, 6%.
While the government has already sold almost 20% of that amount, not counting Wednesday's sale, analysts noted that moving away from borrowing in euros has the benefit of providing Spain access to a new pool of potential investors.
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