Credit events can have a profound impact on businesses.
- Financial Health: A credit event can signify poor financial health and may lead to a decline in stock value and investor confidence. - Credit Rating: Credit rating agencies may downgrade a company's credit rating, making it more expensive to borrow money in the future. - Contractual Obligations: For businesses involved in financial derivatives like CDS, a credit event may require immediate settlement, affecting liquidity. - Market Perception: The market may perceive the business as high risk, which can affect relationships with suppliers, customers, and partners.