Financing Cost Savings

Financing Cost Savings

A source of competitive advantage that depends on access to low cost sources of capital.

Financing Cost Savings

The act of gaining a competitive advantage in business because of access to low-cost capital. For example, if two competing firms both borrow $1 million for operating expenses, but Firm A secured a 4.5% interest rate while Firm B had to settle for 8%, then Firm A has financed cost savings with respect to Firm B.
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However, the low interest rate environment, coupled with a faster-than-anticipated debt pay down, is expected to result in financing cost savings on the order of US$100 million versus our original expectations.
CEMEX Updates 2001 Estimates
Although 75% of the associated financing cost savings are to be flowed through to ratepayers, proceeds would be used to shrink capitalization, including paying down debt.
PP&L's Rtgs Affmd Re: Restructuring Settlement

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