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On the other are long-term borrowers.
That would mean higher interest rates for long-term borrowers.
Real interest rates have certainly fallen for long-term borrowers in the last few years.
The group allows long-term borrowers to repay at a 1% interest rate over 36 months, while short-term borrowers are required to pay off the debt in a month at a 10% interest rate.
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Another is that the flexibility of covenant-lite loans helps long-term healthy borrowers get past short-term difficulties without defaulting.
For example, last week Walt Disney set a record for a long-term corporate borrower by issuing $500 million of 30-year bonds with a 3.0% coupon.
And we can't forget that the company set a record in July for a long-term corporate borrower by issuing $500 million of 30-year bonds with a 3.0% coupon.
But lenders' heightened attention to fraud might actually have long-term benefits for borrowers.
Banks and other financial institutions will continue to adjust, with considerable pain, to the new reforms, but the long-term effects on borrowers and on the economy should be relatively limited compared to the large potential benefits from reducing the damage from future crises.
This makes rehabilitation the best option, long-term, for many borrowers.
In theory, banks with strong, long-term relationships with corporate borrowers should be able to generate more business without compromising the quality of their loan books.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com