From Boeing to Wynn Resorts, companies are maxing out credit lines as they race to stockpile cash amid coronavirus slowdown

• Companies are turning to banks to max out their credit lines in an effort to boost cash amid the coronavirus pandemic, Bloomberg reported Thursday.
• Boeing, Wynn Resorts, and Hilton are among companies that have drawn on credit lines or loans this week.
• Companies are tapping lines of credit because their favorite source of cash, the corporate bond market, has been hit hard by the coronavirus panic.
• Read more on Business Insider.

In an effort to boost cash reserves amid the coronavirus pandemic, a number of companies are maxing out credit lines, Bloomberg reported Thursday.

On Wednesday, a number of companies in industries hit hardest by the pandemic began to draw on credit lines. Boeing plans to draw down a $13.8 billion loan as early as Friday, Bloomberg reported. Wynn Resorts will draw a portion of an $850 million credit line, while Hilton Worldwide Holdings will draw on part of a $1.75 billion loan, according to Bloomberg.

The cash will be used to avoid any pitfalls, according to the report, as travel and leisure companies brace for the full impact of the coronavirus outbreak, which has already disrupted flights and damaged consumer confidence. The frenzy to access cash quickly shows just how fast sentiment has turned negative amid the coronavirus pandemic, according to the report.

In just a few weeks, coronavirus has spread across the globe to pandemic status and disrupted supply chains, damaged consumer sentiment, and sent global markets into a tailspin and ending a record 11-year bull market run. At the same time, safe-haven assets such as US Treasuries slipped, showing that some investors are selling them to increase their cash on hand.

Companies are rushing to bank loans because their favorite source of capital, the corporate bond market, has slowed amid the coronavirus pandemic, according to the report. Now, bankers are getting phone calls from a wide range of companies, even those in industries that have not yet been hit hard by the outbreak, Bloomberg reported.

US banks had a total of $2.5 trillion in credit commitments that were unused at the end of 2019, according to the Federal Deposit Insurance Corp. Of those, 64% came from the four largest banks: JPMorgan, Bank of America, Citigroup, and Wells Fargo, Bloomberg reported.

Many analysts have noted that while there could be a strain on banks, the financial system and US economy are in a much different place than 2008. Still, it remains to be seen how the current market panic amid a pandemic will shake out, according to the report.