Who would have thought that trade credit insurers would think twice about agreeing credit limits on Morrisons & Asda!
You would imagine that obtaining insurance on these giants of retail wouldn’t be an issue.
However, currently most trade credit insurers have little enthusiasm to add to existing capacity and are asking policyholders to trim their insured credit limits down to actual requirements. The background to this situation is that private equity-backed businesses piled high with debt are suffering now that interest rates have returned to realistic levels. We aren’t suggesting that Morrisons & Asda will fail tomorrow, but we have in the past witnessed the demise of Debenhams and the House of Fraser.