LONDON (Reuters) - More European companies are breaching bank covenants due to rising interest rates and overly optimistic growth estimates they used to take out loans, a restructuring expert said on Wednesday.

As the cost of money rises, companies across Europe are having problems meeting some of the growth and profitability conditions attached to their bank loans, said Lachlan Edwards, Goldman's co-head of European restructuring, at a restructuring conference in London .

"There are lots of companies breaching covenants right now," he said. "Interest rates are going up, and some business plans were financed with growth assumptions that haven't been realised."

Retailers are struggling because of interest rates and bad weather, and industrial companies may suffer because of strong exchange rates and high commodity prices, he added.

"People are finding that capital structures need to change," Edwards said on the sidelines after speaking at the conference. "The companies that need to refinance are going to have a worrying summer."

Prime brokers, mostly large investment banks, are reducing the amount of money available to hedge funds or other investors willing to borrow to buy a leveraged loan, restructuring specialists said at the conference.

In the United States , several junk bond sales have been pulled or their terms sweetened over the past few weeks to draw buyers.

Source: uk.biz.yahoo.com