Upfront: Costs of Borrowing on the Rise

In a survey of the treasury and finance pros attending the Association for Financial Professionals' 25th annual conference in November 2004, 75 percent of respondents said they expect the cost of borrowing and issuing debt to increase in 2005. Thirteen percent expect debt costs to rise by at least 100 basis points (bps), while 60 percent expect an increase between 25 bps and 75 bps. Twenty-three percent of respondents expect rates to remain near current levels, and only 4 percent expect the costs of borrowing and issuing debt to decrease.