The Wall Street Journal has mentioned in passing that investment bankers have been stuck with hung LBO financings, the result of investor resistance to the terms on offer. This Bloomberg story highlights the degree to which the Wall Street players have been left holding the bag. Unless there is an unexpected change in sentiment, the […]
Read more...Whether you choose to see it as subprime contagion, repricing of risk, or a temporary correction, prices of debt in various markets are falling, which translates into higher yield requirements. At RGE Monitor, Nouriel Roubini took note (as we did) of a Fitch report warning of overheated lending practices in the commercial real estate lending […]
Read more...Ciitgroup CEO Charles Prince, in an exclusive interview with the Financial Times, said something I expect he will come to regret: Chuck Prince on Monday dismissed fears that the music was about to stop for the cheap credit-fuelled buy-out boom, saying Citigroup was “still dancing”. The Citigroup chief executive told the Financial Times that the […]
Read more...I’ll be brief in introducing this story on leveraged loans in today’s Financial Times, but you might also want to view its companion piece, a story on Citigroup CEO Chuck Prince’s remarks on this market. Leveraged loan prices are at their lowest point since the start of the Gulf War. Some see it as a […]
Read more...An article in the Financial Times reports on something truly extraordinary: rating agency Moody’s issuing a report, due out Monday, that is highly critical of the private equity industry. And we don’t mean because they have gotten away with a lot of “cov lite” deals, which are debt financings for their transactions that lack the […]
Read more...Has the Murdoch era already begun? Two days in a row we have had page one stories in the Wall Street Journal that managed to skew the facts. Today’s piece, “Foreign Investors Face New Hurdles Across the Globe,” is misleading in a minor and a major way. The minor way is likely to be apparent […]
Read more...In a firm, articulate op-ed piece in the Financial Times, “Protect workers from the private equiteers,” Jack Dromey, an officer of the trade union Unite, says, “Workers deserve better in private equity deals.” I’ve gotten so used to writers that are afraid to take on the orthodoxy of free markets that it’s refreshing to see […]
Read more...A page one story in the Wall Street Journal, “Market’s Jitters Stir Some Fears For Buyout Boom,” discusses how creditors are suddenly rediscovering that they can say no to deals that don’t offer them reasonable terms. This is coming as quite a shock to private equity firms, who were used to getting their own way […]
Read more...Apologies for being a tad late on this item, an article by the Financial Times’ lead editorial writer Martin Wolf, “Risks and rewards of today’s unshackled global finance.” Power went down in parts of Manhattan today, which put a crimp in my schedule. So I will be briefer than I might otherwise be. I was […]
Read more...One of the reasons the US market traded down today was fears the LBO boom is coming to an end, and support for that thesis came in a Bloomberg story, “Thomson Learning Shows `Breaking Point’ for Junk Debt.” Three deals, Thomson Learning, US Foodservice, and Dollar General, are having trouble finding lenders on terms recently […]
Read more...The Economist takes a detached, often ironic, tone in its articles. So when one reads a piece that exudes worry, as this week’s “Bearish Turns” does, it’s noteworthy. The piece recites a litany of likely developments in the credit markets, all negative: the indeterminate state of the Bear Stearns subprime hedge funds; the near-certainty of […]
Read more...The Financial Times and the Wall Street Journal give complementary updates on the unraveling of the Bear Stearns subprime hedge funds, the larger of which was the High Grade Structured Credit Strategies Enhanced Leverage Fund. Merrill Lynch and Deutsche Bank put up over $1 billion in assets seized from the funds for sale today. Some […]
Read more...OK, the headline may be exaggerating, but not by much. A Bloomberg article titled, “Bernanke, Trichet Turn to BIS as Markets Ignore Risk,” discusses how central bankers are finding the Bank of International Settlements an increasingly important forum for exchanging ideas and intelligence. What is distressing yet not surprising is the central bankers’ acknowledgement of […]
Read more...Martin Wolf has an excellent story today in the Financial Times, “Unfettered finance is fast reshaping the global economy,” in which he describes the change from “managerial capitalism” to “global financial capitalism.” Wolf takes pains to avoid taking sides on whether this development is a good thing or a bad thing, but one senses that […]
Read more...Steve Rattner, best known as the heir apparent at Lazard Freres who overplayed his hand, and is now the head of a private equity firm, Quadrangle Partners, wrote a rather curious piece, “The Coming Credit Meltdown,” that ran in Monday’s Wall Street Journal (apologies for being on the late side in posting it). The odd […]
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