Revolvers: Revolver may misfire when frozen

What’s the next shoe to drop in the credit crunch? Revolving loans may be coming untied. Banks have extended some $6 trillion of corporate loans worldwide that haven’t yet been drawn, according to Citigroup analysts in London. Banks only have to hold minimum reserves against undrawn revolving loans and back-up lines of credit for commercial paper programmes. A widespread and sudden drawdown of these loans could give banks fresh capital problems. Many company treasurers are probably already nerv...