Comments on: More Debt Stress: Aggressive Leveraged Loan Liquidations http://www.nakedcapitalism.com/2008/02/more-debt-stress-aggressive-leveraged.html Sun, 22 Nov 2009 15:18:28 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: mona http://www.nakedcapitalism.com/2008/02/more-debt-stress-aggressive-leveraged.html#comment-11585 mona Sat, 19 Jul 2008 03:14:00 +0000 http://www.nakedcapitalism.com/2008/02/more-debt-stress-aggressive-leveraged-loan-liquidations/#comment-11585 Hi everyone,<br/> This is an interesting article on debt stress, where debt fears heighten in the world. I think that its a demand issue and i agreed to Tom's world.<br/>==================================<br/>caroline16<br/><a HREF="http://www.mydebtconsolidation.name" REL="nofollow"><br/>http://www.mydebtconsolidation.name</a> Hi everyone,
This is an interesting article on debt stress, where debt fears heighten in the world. I think that its a demand issue and i agreed to Tom’s world.
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caroline16

http://www.mydebtconsolidation.name

]]> By: Tom http://www.nakedcapitalism.com/2008/02/more-debt-stress-aggressive-leveraged.html#comment-3910 Tom Mon, 11 Feb 2008 16:19:00 +0000 http://www.nakedcapitalism.com/2008/02/more-debt-stress-aggressive-leveraged-loan-liquidations/#comment-3910 Interestingly, this is not a credit issue but a demand issue. Those funds that poured into LBO debt, swelling it up, are running for the hills. <br/><br/>So is the market in "serious trouble"? Depends on your definition. <br/><br/>Are there indications that the demand profile will have to change dramatically? Of course. <br/><br/>But are the underlying credits in difficulty? No. Do they all deserve distress-level valuations? No. <br/><br/>Does this mean that someone out there is working out there are bargains out there? Almost certainly.<br/><br/>Will be blogging on this later. Will mail the link when I do. Interestingly, this is not a credit issue but a demand issue. Those funds that poured into LBO debt, swelling it up, are running for the hills.

So is the market in “serious trouble”? Depends on your definition.

Are there indications that the demand profile will have to change dramatically? Of course.

But are the underlying credits in difficulty? No. Do they all deserve distress-level valuations? No.

Does this mean that someone out there is working out there are bargains out there? Almost certainly.

Will be blogging on this later. Will mail the link when I do.

]]> By: RK http://www.nakedcapitalism.com/2008/02/more-debt-stress-aggressive-leveraged.html#comment-3872 RK Sun, 10 Feb 2008 13:34:00 +0000 http://www.nakedcapitalism.com/2008/02/more-debt-stress-aggressive-leveraged-loan-liquidations/#comment-3872 Question: Is there a uniform quarterly date across <br/>the hedge fund universe when redemption requests must be made? And a uniform follow up period before disbursement of investor funds? I ask because, while the banks are sitting on 200B of bridge (or pier) loans, I assume that hedge funds own a chunk of the debt of completed LBO transactions. Question: Is there a uniform quarterly date across
the hedge fund universe when redemption requests must be made? And a uniform follow up period before disbursement of investor funds? I ask because, while the banks are sitting on 200B of bridge (or pier) loans, I assume that hedge funds own a chunk of the debt of completed LBO transactions.

]]> By: Yves Smith http://www.nakedcapitalism.com/2008/02/more-debt-stress-aggressive-leveraged.html#comment-3859 Yves Smith Sun, 10 Feb 2008 05:41:00 +0000 http://www.nakedcapitalism.com/2008/02/more-debt-stress-aggressive-leveraged-loan-liquidations/#comment-3859 I can't say for certain, since I don't have a Bloomberg terminal, but I have to believe you are right, that even with a favored price two months ago, Buffett is sitting on losses now. Even a guy like him doesn't win on all his trades. He's a had a few years when he didn't perform so well. And wasn't one of his corporate rescues a turkey?<br/><br/>But Buffett's missed call may point to something else. Remember his remark in the last week or so that it was easy to borrow and credit was cheap. Yeah, easy to borrow if you have one of the few real AAAs left. As smart as he is, he may be a wee bit out of touch with the current environment, particularly since he talks to fellow senior people who may be a bit self-deluded (at least the ones in regulatory positions and in the financial sector).<br/><br/>Although Jim Rogers has turned into a shameless self-promoter, he is a keen student of financial history and has always taken riskier bets than Buffett and therefore has a keen eye for the downside. Buffett's December buy said at least then that he wasn't very worried about systemic risk. If I had to choose between the two, I would look to Rogers as the better barometer than Buffett right now. I can’t say for certain, since I don’t have a Bloomberg terminal, but I have to believe you are right, that even with a favored price two months ago, Buffett is sitting on losses now. Even a guy like him doesn’t win on all his trades. He’s a had a few years when he didn’t perform so well. And wasn’t one of his corporate rescues a turkey?

But Buffett’s missed call may point to something else. Remember his remark in the last week or so that it was easy to borrow and credit was cheap. Yeah, easy to borrow if you have one of the few real AAAs left. As smart as he is, he may be a wee bit out of touch with the current environment, particularly since he talks to fellow senior people who may be a bit self-deluded (at least the ones in regulatory positions and in the financial sector).

Although Jim Rogers has turned into a shameless self-promoter, he is a keen student of financial history and has always taken riskier bets than Buffett and therefore has a keen eye for the downside. Buffett’s December buy said at least then that he wasn’t very worried about systemic risk. If I had to choose between the two, I would look to Rogers as the better barometer than Buffett right now.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/02/more-debt-stress-aggressive-leveraged.html#comment-3854 Anonymous Sun, 10 Feb 2008 04:22:00 +0000 http://www.nakedcapitalism.com/2008/02/more-debt-stress-aggressive-leveraged-loan-liquidations/#comment-3854 In early December, <a HREF="http://money.cnn.com/2007/12/02/news/companies/buffett.fortune/index.htm" REL="nofollow">Warren Buffett bought $2 billion of TXU bonds</a>: <i>$1.1 billion of 10.25% bonds at 95 cents on the dollar to give Buffett an effective yield of 11.2%. And Berkshire bought $1 billion of 10.5% PIK-toggle bonds (bonds whose interest can be paid out in cash or more bonds) for 93 cents on the dollar, producing an effective yield of 11.8%.</i><br/><br/>How much did the latest batch of TXU debt go for? Surely less than December's price. Did Buffett catch a falling knife? In early December, Warren Buffett bought $2 billion of TXU bonds: $1.1 billion of 10.25% bonds at 95 cents on the dollar to give Buffett an effective yield of 11.2%. And Berkshire bought $1 billion of 10.5% PIK-toggle bonds (bonds whose interest can be paid out in cash or more bonds) for 93 cents on the dollar, producing an effective yield of 11.8%.

How much did the latest batch of TXU debt go for? Surely less than December’s price. Did Buffett catch a falling knife?

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