Insolvency risk to DB schemes from sub-prime crisis

The US sub-prime mortgage crisis hit the headlines last week when US provider American Home filed for bankruptcy. The news sparked worldwide credit fears which drove down global markets. David Poynton, head of credit analysis at LCP, says: “Pension fund trustees need to understand whether the employer backing their fund is at risk from the current credit crunch. "Companies needing to refinance debt in the near future – especially those without investment grade credit ratings – may find themselves facing higher interest bills and more onerous borrowing terms, reducing the resources avail...