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GROWTH COMPANIES REPORT SHARP INCREASE IN DEBT RESTRUCTURING, COOPERS & LYBRAND 'TRENDSETTER BAROMETER' SURVEY FINDS

 NEW YORK, Jan. 13 /PRNewswire/ -- CEOs of growth companies interviewed for Coopers & Lybrand's "Trendsetter Barometer" survey reported a sharp increase in debt restructuring during the third quarter of 1993.
 In the three-month period through September 1993, 19 percent of "Trendsetter" companies restructured their debt, an approximately 50 percent increase from the 12 to 13 percent levels earlier in the year.
 "Clearly, these financially savvy CEOs took advantage of lower interest rates to improve their balance sheets," says George Auxier, national director of Entrepreneurial Advisory Services for Coopers & Lybrand, the international professional services firm.
 Overall interest rates during the third quarter were quite low, and the spread over prime, which dropped slightly to 1.34 percent, gave these CEOs access to an actual interest rate of 7.34 percent, the lowest in recent years.
 "By restructuring their debt, these companies are now in a very strong position to attract capital, enabling them to take advantage of opportunities both here and abroad," Auxier adds.
 Smaller Companies Achieve Equality in Bank Loans Secured
 Although fewer "Trendsetter Barometer" companies secured bank loans in the third quarter -- 33 percent compared to 37 percent in July -- the smaller firms, those with fewer than 100 employees, increased their borrowing substantially.
 One in three (33 percent) smaller "Trendsetter" companies completed bank loans during the quarter, up from 29 percent in July and on a par with their larger counterparts.
 "Traditionally lenders have been reluctant to lend to smaller, non-manufacturing companies, which tend to be service businesses that often lack tangible assets for collateral," explains Auxier. "So it is significant that smaller companies have now become equally attractive to lenders.
 "Unfortunately, this trend may not be long lasting," he cautions. "The failure rate on loan applications for smaller growth firms, at 12 percent, is still much greater than for larger ones, at 8 percent."
 Non-Bank Funding Alternatives Popular
 Many growth company CEOs say they plan to seek non-bank funding in the coming year: 15 percent are considering private placements, 15 percent will seek private "angel" investors, and 11 percent will pursue venture capital financing.
 "These financing alternatives can provide accelerated near-term growth," says Auxier. "It is encouraging that `Trendsetter' CEOs plan to pursue these options in the near future in spite of underlying uncertainties about interest rates, and the impact of new taxation, regulations and healthcare reform."
 Coopers & Lybrand's "Trendsetter Barometer" is developed and compiled by the firm's Entrepreneurial Advisory Services group with assistance from the opinion economic research firm of Business Science international. At each Coopers & Lybrand office, an Entrepreneurial Advisory Services team is available to service the needs of growing and midsize companies.
 One of the world's leading professional firms, Coopers & Lybrand provides services for enterprises in a wide range of industries. The firm offers its clients the expertise of more than 16,000 professionals and staff in offices located in 100 U.S. cities and more than 66,000 people in 120 countries worldwide.
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 /NOTE TO EDITORS: Graphic art available upon request.
 Coopers & Lybrand's "Trendsetter Barometer" interviewed CEOs of 395 product and service companies identified in the media as the fastest growing U.S. businesses over the last five years. The surveyed companies range in size from approximately $1 million to $50 million in revenue/sales./
 /CONTACT: Maggie O'Donovan Bolton of Coopers & Lybrand, 212-536-3174/


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Date:Jan 13, 1994
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