(Bloomberg) — Wirecard’s lenders are demanding more clarity from the company in return for the extension of almost $2 billion in financing after it breached terms on the loan, people familiar with the matter said.At least 15 commercial banks who have lent to Wirecard, including Commerzbank AG and ABN Amro, are in hectic negotiations about the steps to take after the German payments company said on Thursday it’s unable to release its annual report because it can’t locate 1.9 billion euros in cash ($2.1 billion), the peple said.Wirecard could make an announcement accepting outside monitoring and higher transparency as early as next week and in return the banks may not exercise their right to call the loan, one the people said.The lenders are also considering hiring outside help as they seek to navigate the risk of a potentially massive default, the person said asking not to be identified discussing the private information.Wirecard AG has an outstanding revolving credit facility of 1.75 billion euros, according to data compiled by Bloomberg. The German payments company has warned that loans of as much as 2 billion euros could be terminated if its audited annual report isn’t published on Friday.About 90% of the RCF has been drawn by the company, according to people familiar with the matter and a list detailing the RCF participation that was seen by Bloomberg:Most of the banks are leaning toward an extension of the repayment obligation in order to better assess the potential impact of a default on their balance sheets, the person said. However, a prolonged extension could be seen as delaying an insolvency, which is illegal under German law.Spokespeople for ABN Amro, Commerzbank, ING, LBBW, Cregit Agricole, DZ Bank, Citigroup, Deutsche Bank and Raiffeisen Bank International declined to comment. Representatives for the other banks didn’t immediately respond to requests seeking comment.Wirecard didn’t respond to a request for comment. In a separate statement on Friday the company said it’s in “constructive talks” with lending banks.Read more: Wirecard’s $2.1 Billion Hole Deepens After Forgery Claim Deutsche Bank Chief Risk Officer Stuart Lewis declined to comment on Wirecard when asked about the exposure on a previously scheduled analyst call on Thursday. However, he said the bank typically hedges its exposure to companies with a low investment-grade credit rating and encouraged analysts to “draw your own conclusions.” Wirecard has a rating that’s one notch away from sub-investment grade.Lending RisksWirecard’s 1.75 billion-euro revolving facility is due June 2024. Banks in the facility include Agricultural Bank of China Ltd., Bank of China Ltd., Commerzbank AG, Deutsche Bank AG, DZ Bank AG, and Landesbank Baden-Wuerttemberg.The 1.75 billion revolver has about 800 million euros outstanding, according to Bloomberg data. The company had repaid part of the facility from a 500 million euros debt sale last year.Banks typically take and hold their revolving credit facilities’ commitments for high-grade companies that means most of Wirecard’s lenders may not have offloaded their lending risks in the company.Read more: Wirecard Credit Swaps Rise to Record Showing High Default Risk(Adds details on lenders talks not to terminate loan to Wirecard in 2nd and 3rd paragraphs, breakdown of loan allocations)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
