Bonds

The Greek crisis show has another month to run

16 Feb 2010

European leaders have confirmed that the Greek deficit reduction plan will be judged for seriousness in March. In the meantime, they will try to convince their own voters that spendthrift Greece won't simply get a handout, while trying to calm investor fears of an EU breakdown.

European junk bond market far from full health

4 Feb 2010

Manchester Utd s recent bond issue has been thrashed in the secondary market. It s not the first highyield issue to falter lately. The market may have bounced back from last year s lows, but bankers should recognise that the highyield recovery can t be taken for granted.

Dubai (inadvertently) gets something right

26 Jan 2010

A subsidiary of Dubai Holding, the private investment vehicle of the emirate's ruler, says S&P doesn't understand the group's relationship with the government. Too true. No outsiders have much of a clue. For Dubai to regain investors' trust, it can't just talk about transparency.

Vulture funds and Goldman pay to play at Gala

22 Jan 2010

Apollo and Cerberus have teamed up with the investment bank to buy a slug of junior debt in Gala Coral. The new investors may have to pay up to win over the UK gaming group's senior lenders. But if they succeed, they will have picked up Gala on the cheap.

Blackstone’s UK retail bank foray could make sense

21 Jan 2010

Backing a new mortgage lender would be an odd move for the buyout group. But a startup bank may not be much harder than bottomfishing for assets among UK financials. And the rates environment means Blackstone could secure privateequity returns.

Carlos Slim succeeds where Murdoch, Zell failed

13 Jan 2010

The Mexican billionaire has done the seemingly impossible: made money in the newspaper racket. His investment in the New York Times a year ago was well timed. By contrast, Rupert Murdoch wrote down most of Dow Jones value and Sam Zell's Tribune went bust.

Bondholders should stick to their guns at Pearl

13 Jan 2010

The UK insurer has proposed a debt restructuring that would force bondholders to take a 25 pct writedown on their holdings in return for the prospect of resumed coupon payments. Bondholders are rightly digging in. Pearl's prospects aren't so bad as to make the offer compelling.

Junk debt rally ignores 2010’s biggest risk

11 Jan 2010

A declining rate of company defaults has led investors to let risk premiums on highyield debt get dangerously low. It's good that fewer companies are failing. But high debt prices don't leave room for the potential fallout when central banks really start pulling out of markets.

US watchdogs emit rare growl at bubble

7 Jan 2010

A lowprofile forum of bank supervisors has told banks not to rely on interest rates staying low. It doesn't signal any quick change in monetary policy. But it does reflect the political winds. It's as if regulators finally want to be seen trying to preempt excesses.

Advice to CDS regulators for 2010

4 Jan 2010

Lawmakers and bankbashers have pinned blame for the financial crisis and in particular the collapse of AIG on credit default swaps. Changes to and tighter oversight of the $31 trillion market are needed. But action should address real, not imaginary, problems.

US should pull the plug on ResCap

4 Jan 2010

Despite nabbing the bulk of the latest $3.8 bln infusion into GMAC, the car lender's mortgage unit is a mess. ResCap still may not pull through, and there's no reason for taxpayers to prop it up. Like its former subprime lending peers, it should be disposed of or allowed to die.

ManU scrambles to avoid financial penalty area

4 Jan 2010

The Glazer family needed an expensive paymentinkind note as well as bank debt to purchase thefootball club in 2005. That PIK not due until 2017 threatens to become a ballooning liability. Tapping the resurgent bond market would put the club on a sounder financial footing.

Advice to CDS regulators for 2010

4 Jan 2010

Lawmakers and bankbashers have pinned blame for the financial crisis and in particular the collapse of AIG on credit default swaps. Changes to and tighter oversight of the $31 trillion market are needed. But action should address real, not imaginary, problems.

Walking away will gain cachet

23 Dec 2009

Why bother? That's the question more underwater Americans are asking themselves about their mortgages. Trapped in the abyss of negative equity, more will decide to quit paying. As they should.

Steep yield curve could throw investors for a loop

23 Dec 2009

The difference between yields on short and longterm U.S. government bonds is at a record high as investors bet on an inflationgenerating economic snapback. But what happens if that doesn t materialize? There are painful precedents.

AAA investors running out of options

21 Dec 2009

Yet another toprated class of debt is on the hit list now that S&P may downgrade covered bonds. Soon there will be little AAA debt left outside the world of government and quasigovernment debt. That means less diversification and lower returns for investors fixated on safety.

US loan market looks ready for leveraged buyouts

15 Dec 2009

The market has gobbled up three recent loans to fund private equitybacked deals. Lenders didn t need much enticement and one debt package was upsized. The renewed appetite will be welcome to dealstarved buyout barons. But investors should beware another bout of indigestion.

Junior creditors get help in bankruptcy fights

9 Dec 2009

It isn't easy for lesser creditors to organize opposition to a bankrupt US company s restructuring plan. But in recent decisions on Six Flags and Freedom Communications, judges have handed them small wins. They should take heart that a debtor s plan isn t always a fait accompli.

CIT jumps through bankruptcy; next trick harder

9 Dec 2009

The US business lender is set to emerge from Chapter 11 with nearly $11 billion less debt. Yet the company still has to figure out a way to raise funds to make new loans on attractive terms. It may have slashed its debt burden, but its longterm viability still looks uncertain.

Dubai Holding needs to clarify its position

8 Dec 2009

The personal vehicle of the emirate's ruler is heavily exposed to property and its estimated $7 billion of debt doesn't have a sovereign guarantee. If Dubai Holding wants to reassure investors that it isn't the next Dubai World, it could start by answering these questions.