Swedish debt collector Intrum AB is tapping bank credit lines for funding as selling commercial paper becomes more challenging.

The company drew down on its revolving credit facility to cover funding gaps, according to a statement on Wednesday. It reported an 8.7% drop in its outstanding commercial paper, which currently stands at 760 million kronor ($68 million), citing poor sentiment in the credit market.

While it’s a relatively small decrease, the move underscores the financing challenge facing the company, said Benjamin Sabahi, head of credit research at SpreadResearch.

“This is not the first time that the commercial paper market is closed for Intrum, hence leaving it with no alternative sources of fresh financing,” he said. “The bond market is also effectively closed for them.”

The company will be reliant on strategies such as asset sales to pay back its creditors, he added. Its bonds maturing in March 2028 fell 0.7 cents on the euro to 84.3 cents on Thursday, according to data compiled by Bloomberg.

Chief Executive Officer Andres Rubio said there’s enough incoming cash flow to pay debt due between now and 2025. The bond market “may be improving, giving us greater flexibility,” he said in an interview with Bloomberg News after its results.

A spokesperson for Intrum added that one of the purposes of the revolving credit facility is to smooth changes in financing conditions. The firm has 9 billion kronor in available liquidity, which includes the revolving credit facility and cash on hand.

Intrum, which collects late payments for clients and invests in portfolios of overdue debt, has come under pressure to reduce its debt burden and cut costs. To raise cash for paying down debt, it has paused dividend payments and is planning to sell assets and exit some markets.

Its shares gained 6% Thursday, recovering some ground from a 15% slide on Wednesday. Some of its longer-maturity bonds are already quoted at distressed prices, or at a yield spread wider than 1,000 basis points over the sovereign rate.

At the end of the third quarter, Intrum had drawn down around €1.2 billion of its €1.8 billion revolving credit facility. Fitch Ratings warned in September that “close to full utilization” of the credit facility could trigger a downgrade of the bonds’ rating by one notch.

--With assistance from Charles Daly and Helene Durand.

(Updates with bond move in fifth paragraph, chart, shares.)