Boruma

The 'Problem' With Solar Companies is Not Really a Problem

GS's remarks on cashflow were linked to concerns over the continuing availability of credit to fund growth and also ability to refinance debt which in some companies will be terming out over the next 12 months. The GS analysis was based on their knowledge of the bond market and capital market funding sources which have deteriorated since the start of the credit crunch. BUT it is an oversimplification and fundamentally ignores the fact that the bank debt markets (where the brokerages are less experienced in my opinion) are eagerly stepping in to fill the void (particularly in Asia) i.e. renewable energy companies with good fundamentals are not having any difficulty accessing short term bank credit - in the current environment it is impossible to foresee a cash flow crisis in the sector!