Credit

Capital Calls: GEO meme, United Parcel Service

9 June 2021

Concise views on global finance: The meme stock good-vs.-evil fairy tale is wearing thin with the private prison operator; the logistics company is focusing on high-margin deliveries rather than volume, and investors aren't loving it.

French investors are collateral damage in EY spat

24 May 2021

Paris-listed Solutions 30 published its 2020 annual report even though the audit firm didn’t sign off its accounts. Post Wirecard, it’s encouraging that auditors are taking a tougher stance. But with lenders potentially pulling credit, it leaves shareholders in a painful limbo.

Capital Calls: “Friends” reunion, SPACs in D.C.

24 May 2021

Concise views on global finance: AT&T's HBO Max is streaming a delayed 25-year reunion of the popular sitcom cast just as the company ditches its media assets; busybody U.S. Congress is taking a hands-off approach to blank-check firms.

Capital Calls: Peloton, Honest Co, Office Depot

5 May 2021

Concise views on global finance: Treadmill recall leaves investors in the workout app stranded; shares in Jessica Alba’s consumer packaged goods company opened more than 30% above their IPO price; the office-supply company paper-shuffles its way to a higher valuation.

Capital Calls: Endeavor’s Hollywood ending

29 April 2021

Concise views on global finance: The entertainment conglomerate’s IPO flipped the script on opening day.

Capital Calls: Elon Musk, LeBron James

1 April 2021

Concise views on global finance in the Covid-19 era: Endeavor, Ari Emanuel’s entertainment group, is hoping the Tesla boss’s stardust will help a second attempt at an IPO; the basketball star’s stake in the Red Sox is a foil to Steve Cohen’s Mets deal.

Corporate debt party will survive rate storm

17 March 2021

Rising government bond yields are dragging up companies’ borrowing costs. Yet the premium that investors demand to buy debt issued by firms is still relatively low. Central banks’ asset buying and the prospect of lockdowns lifting mean credit markets will avoid too big a tantrum.

Corona Capital: UK’s quarantine, U.S. prisons

27 January 2021

Concise views on the pandemic’s corporate and financial fallout: Britain’s new quarantine rules are weak, but will still hurt the travel industry; and for-profit prisons lose business to the U.S. government.

China takes clumsy swipe at sloppy credit ratings

6 January 2021

Dagong Global has been ordered to help repay bondholders in a construction company that defaulted on over $200 mln. Courts are understandably getting tough with so much unpaid debt by top-rated issuers. This sort of punishment, however, will lead to fewer not better assessments.

Moody’s seal of approval comes unstuck in China

30 December 2020

Beijing suspended CCXI’s credit rating business after a top-marked miner defaulted soon after selling new debt. A 30% stake held by Moody’s suggests foreign influence didn’t upgrade the industry. Rising state issuance has made pricing risk even more political than financial.

Buy-now-pay-later exposes regulation blind spot

8 December 2020

Sweden’s Klarna and Australia’s Afterpay both allow punters to buy goods and defer payment. Opinion is divided over how regulators should treat any loss on the enabling financing. Balancing innovation and stability is hard, but the rules right now aren’t clear enough.

The Exchange: Brave new credit world

21 July 2020

The crisis unearthed land mines in the fixed-income market – many of which Arena Investors Chief Executive Dan Zwirn had previously identified. He now explains how to navigate this opaque universe with deep dives on leveraged finance, liquidity crunches and an activist Fed.

Investors emerge faster than emerging economies

21 July 2020

Fitch Ratings may soon label more countries in the world as junk than investment grade. And Covid-19 has added to the problems that many poorer countries already faced. Even so, falling U.S. bond yields are forcing money managers to raise their exposure to riskier markets.

Rolls-Royce flies closer to credit-card max-out

9 July 2020

The British jet engine maker led by Warren East incinerated 3 bln pounds in the last six months due to aviation lockdowns. At least another 1 bln may disappear in the next. Extra credit lines look increasingly like bandages over a balance sheet in need of serious surgery.

Car finance giants are skidding into the ditch

8 July 2020

The Financial Conduct Authority is forcing big auto-finance players to freeze customer payments. The losses mean they may have to buy back more of the loans in securitisations that helped fuel the market’s breakneck rise. That in turn will make it harder to fuel future growth.

Corona Capital: U.S.-China fight, Canada downgrade

25 June 2020

Concise views on the pandemic’s corporate and financial fallout: Washington deploys sanctions over Hong Kong, adding to trade and Covid-19 tensions; and a double whammy of the coronavirus and low oil prices costs Canada one of its AAA ratings.

BP’s funky debt charts end of credit’s lockdown

18 June 2020

The oil major issued $12 bln of bonds that count as equity, its first such deal. Investors’ hunger for esoteric securities from a tricky sector illustrates their enduring need for yield, thanks to central bank largesse. A weak economy and risk-hungry markets are a dangerous mix.

Cirque du Soleil deal needs contortionist skills

10 June 2020

Creditors want to take control of the acrobatics company. The company required a reboot even before Covid-19 forced shows into hiatus in March. The pandemic has made it even harder to value. But with other high-wire deals getting done, Cirque’s show is likely to go on.

Argentina gets too cheeky with its creditors

8 June 2020

The serial defaulter wants to put its restructuring to a creditor vote, but leave room to decide later which votes count and which don’t. That would require a tweak to a common clause designed to make bond negotiations simpler. Emerging-market borrowers would be worse off for it.

Fed’s credit market duct tape will come unstuck

20 May 2020

Junk bond yields have fallen from March peaks despite dire economic forecasts thanks to Federal Reserve boss Jay Powell’s new asset buying plans. He can’t make bad business models sustainable and may even encourage bad decisions. Investors will be out on a limb if things blow up.