• Refinance Risk is When or How Likely a Debtor is to Default on Its Loan Because it is Unable to 'Refinance' an Outstanding Balance When the Loan Matures
• This Means That There has Been a Serious Material Deterioration of Its Financial Condition, and Where Other Creditors May Not be Willing to Accept the Increased Credit Risk Through a Refinance
• It can also Mean That Because of Changes in Interest Rates (i.e., Increases), and Changes in Underwriting Criteria (i.e., More Conservative), the Borrower is Unable to Meet the New Requirements Upon Maturity
• Higher Interest Rates
• Resizing Opportunities
• Repricing Risk
• IMPORTANCE TO YOU - Refinance risk is a big deal, and will likely result in a credit risk rating downgrade. A warning