Shares of Talbot’s Inc. were battered early Wednesday following its disclosure that HSBC is no longer prepared to continue making letter of credit facilities available to the company. A letter of credit essentially substitutes the credit of a third party (usually a large bank) for that of a borrower. Did HSBC Finance attempt to sign Talbots under HSBC Finance Corporation’s merchant program? Is this a result of Talbots only accepting Visa, MasterCard, Discover and American Express? Did Talbots turn down HSBC’s merchant account program? If so we fully understand, since other HSBC merchants have been immediately classified as troubled merchants. Otherwise they would have signed a merchant agreement with somebody else.
There may be more to the talbots story as facts become available to the general public.
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