Gulf needs its own financial giants 21 Oct 2008 The liquidity squeeze should trigger consolidation amongst the region s fragmented financials. Bigger banks would better meet the Gulf s own needs and reduce dependence on foreign banks. Dubai property lenders Amlak and Tamweel are already courting. Abu Dhabi's banks look next.
Spanish banks face another mega property refinance 17 Oct 2008 Metrovacesa is a complicated variation on the same theme of double leverage in Spanish property companies. The controlling shareholders, the Sanahuja family, are creaking under more than E4bn in debt. The company owes another E7.1bn. Even so, Metrovacesa will probably survive.
US bank rescue worsens mortgage mess 17 Oct 2008 The government s plan to back Wall Street s borrowings has led investors to dump mortgage bonds in favour of bank debt pushing home loan interest costs up sharply. That should reverse, given time. In the meantime, the US has few options to give home buyers a break.
Tchenguiz won’t be the last ailing property tycoon 9 Oct 2008 His stakes were sold at a £1bn loss. In better times, leveraged real estate investors in negative equity were safe banks wouldn t repossess properties. But the sector s in tatters. Others will suffer Robert Tchenguiz s fate. And they won t only owe Icelandic banks.
Hypo Real Estate wakes up to funding nightmare 29 Sep 2008 Thanks largely to an illjudged acquisition in late 2007, the E395bn German bank has the wrong balance sheet for a credit squeeze: hyperleveraged and almost no deposits. That model is so broken that a E35bn publicprivate loan guarantee may not be enough to ensure survival.
Dubai works overtime to avert property crash 29 Sep 2008 The emirate is pushing to merge its mortgage lenders, and developers look next. Dubai s new real estate fund will also help shore up prices. In a market dominated by government entities and where just 30% of buyers need to take out a mortgage, it s a mighty effort.
Canary Wharf can ride out the financial storm 23 Sep 2008 The Docklands home of many of London s financial firms looks vulnerable to Lehman s woes and high gearing. But Songbird, the biggest landlord in Canary Wharf, has solid rents and low vacancy rates. The district can sing a happier song than its rival, the City.
Lloyds takeover would be best solution for HBOS 17 Sep 2008 The UK mortgage giant s reliance on wholesale funds has sucked it into the vortex. But it is too big to fail and a private sector solution is better than a bailout. Still, if the authorities need to grease a deal significantly, HBOS shareholders should be wiped out.
Colonial lenders dodge Spanish property bullet 15 Sep 2008 Lenders to the troubled Spanish real estate company have agreed to restructure E6.5bn of debt, one of the largest deals of its type in the nation s history. The complex plan, which includes a E1.4bn convertible bond, may let banks avoid taking a hit to profits for now.
Fannie rescue shouldn’t egg UK on 9 Sep 2008 The US government s support of its quasigovernment mortgage banks could inspire a British imitation. But the right lesson is the opposite governments should stay away from housing finance. The UK should let falling prices clear the market. A rescue would only slow the process.
Let the market kill the GSEs – politicians won’t 8 Sep 2008 Fannie Mae and Freddie Mac have no place in a wellordered economy, but are difficult to euthanize. The market, which has brought them down, should finish the job. The GSEs' guarantee fees should be raised enough to make them uncompetitive once the mortgage market recovers.
Nakheel IPO echoes DP World 5 Sep 2008 The Dubai stateowned property developer has good reason to mull an initial public offering. Its $3.5bn convertible Islamic bond matures in a year and a listing would ease repayment costs. DP World used an IPO to similar ends, but Nakheel will hope the likeness ends there.
Foreign snub of GSE debt has silver lining for US 2 Sep 2008 Overseas investors are paring their holdings of Fannie and Freddie debt, despite the US government s backing of the GSEs. But erstwhile buyers appear to be ploughing funds into US Treasury bonds instead, helping to keep rates low, thereby benefitting the world s biggest debtor.
UK’s house fixes won’t work, but will cost 2 Sep 2008 A oneyear holiday from the transaction tax only invites buyers to purchase homes that will lose value. Incentives for builders will add to the supply of unsold properties, further depressing prices. The scheme's main effect: to worsen the government s fiscal position.
Irish banks may escape bloodbath 1 Sep 2008 The Emerald Isle s lenders look horribly exposed to its falling property market. Further pain is likely. But Irish banks have mostly avoided structured credit and have belowaverage arrears. Unless the Irish miracle unravels completely, the banks should weather the storm.
Liberty faces a long siege 28 Aug 2008 Two of the world s biggest property companies have pitched their tents outside UK retail giant Liberty. Neither Westfield nor Simon Property will probably strike now retail property is slipping. But they are jostling for the high ground when an acquisition becomes possible.
Taylor Wimpey must get its banks on board 27 Aug 2008 The UK house builder has written down its land bank more aggressively than its peers. That should leave it looking healthier when the market finally turns. But write downs won t fix the negative cash flow or stabilize the share price. What s needed is a deal with its lenders.
Foxtons floundering is private equity test case 26 Aug 2008 BC Partners swoop on the London estate agency last year looked as pricey as the property valuations of its infamously aggressive sales staff. The rental arm may help to keep it afloat. The bigger question is how to minimize the fallout from a classic topofthemarket deal.
Cost of turning the GSEs into real banks: $200bn? 22 Aug 2008 Feeble regulators have allowed US mortgage giants Fannie and Freddie to get by with minimal capital. If Treasury secretary Paulson wants them to be as strong as real privatesector banks so he can break them up and sell them off, he may have to inject some $200bn or more.
UK banks keep on lending to property 20 Aug 2008 Despite an increasingly grisly UK real estate market, bank loans to the sector rose 30% in the last year. Only a bit of that balance sheet growth is new, though. The rest is involuntary some banks didn t stop lending in time. That could hurt as the UK economy slows.