Corporate Debt

Charlie Ergen drowns in two kinds of debt

15 Nov 2024

The EchoStar founder may lose a deal to merge his satellite TV service Dish with rival DirecTV after bondholders balked at a $1.5 bln haircut. Years of bidding up assets and finagling the financial burden has tried creditors’ patience. It would be wise to come to the table now.

China developers’ survival fight gets litmus test

15 Nov 2024

Sunac has given investors four options for restructuring $2 bln of onshore bonds, including an 82% haircut and a debt-for-equity swap. How they vote will reveal their views on both the $3.1 bln firm’s chances of survival and Beijing’s attempts to end the property slump.

Thames debt rejig is oddly good deal for creditors

25 Oct 2024

The ailing UK water utility wants bondholders to defer repayments and give it an extra 3 bln pounds. Investors defer a messy default now and earn an equity-like return on the new money. And they can hope that PM Keir Starmer will agree to price rises, lowering future losses.

Boeing cash patch will be ripped off

15 Oct 2024

The aviation giant will raise money to fill a hole caused, most recently, by a worker strike. Debt weighs heavy and selling $12 bln in stock would help. But additional funds offset new problems, rather than fix Boeing’s plentiful existing ones. The cost of dilution will be high.

Direct lenders’ golden moment is over

10 Oct 2024

The core of private credit that’s focused on buyout debt surged after the pandemic, spurring the industry to $850 bln in assets. Yet with public markets roaring, returns will fall. Rather than replacing Wall Street banks, private players like Ares will have to cooperate instead.

Ratan Tata leaves more to India than its tycoons

10 Oct 2024

The former Tata chair, who has died aged 86, put a kind face on capitalism, though his bold cross-border M&A and lingering influence hurt the salt-to-steel conglomerate. The new era of industrialists in the country are financially shrewder but less universally admired.

Debt feast helps buyout firms through IPO gloom

7 Oct 2024

Dividend recaps, where private equity managers pile debt onto a company to give themselves a payday, are booming, with $17 bln in the US last month. Since public offerings look tough, it’s a handy cash-raising alternative. The trend will continue, if the economy plays ball.

Thames creditors face messy flush, or deep rinse

30 Sep 2024

The UK water company is running out of cash and racing to raise equity. A new investor would want a big chunk taken out of its 16 bln pound debt load, which may fall heavily on bondholders who can’t put up new money. Even that may be preferable to a government-led overhaul.

Private equity spoils of war bound to spread again

5 Sep 2024

Bigger funds and more fees have boosted buyout-firm valuations. Even at 26 times earnings, Blackstone trails smaller peer Ares. The shop led by Michael Arougheti is benefiting from a focus on credit and deploying its $450 bln, but an M&A revival and investing masses loom large.

MicroStrategy is hedge funds’ favorite meme stock

2 Jul 2024

The $26 bln firm’s shares have leapt on a bitcoin buying binge, funded by bonds that can turn into stock. Unlike GameStop’s ragtag punters, MicroStrategy depends on hedge funds such as Citadel piling in. Thing is, they rely less on a rising share price than a wildly volatile one.

Olympic Games can withstand Atos farce

26 Jun 2024

The French firm managing the Paris sporting event’s IT backbone is close to bankruptcy. It may find 800 mln euros of short-term financing from President Macron’s government and loans even after creditors ditched restructuring talks. But its future after the Games is less certain.

The ragged end of private equity is unspooling

21 Jun 2024

Carlyle’s $7 bln purchase of Veritas was part of a multi-year software buyout frenzy, reaching over $100 bln in deals in 2022. Fueled by cheap debt, the bill is now due with rates up and results down, sparking a fight with creditors including feisty Elliott. It won’t be the last.

PAG’s downsized Asia fund could pay off handsomely

17 Jun 2024

China dealmaker Weijian Shan raised $4 bln for his firm's buyout fund, less than half the target, after refusing to cap exposure to the world's second-largest economy. He'll have more freedom than rivals to chase returns from discounted Chinese assets. That could be lucrative.

Oaktree can still score a skilful goal with Inter

6 Jun 2024

The US fund ended up owning the loss-making Italian club after the previous owner missed a payment. Fetching valuations similar to what Elliott secured for rival AC Milan looks tricky. Yet American interest in soccer and on-field success point to a sale price exceeding $1 bln.

Investors are hunting securitization’s oddballs

4 Jun 2024

Whether a bundt cake bakery or an internet address, if it generates steady cash, it can be diced up in the financial alchemy of securitization. In this Exchange podcast, Janus Henderson’s John Kerschner explains the promise and perils, and why the oddest assets can be the best.

China property bailout stars align for Vanke

31 May 2024

The country's biggest homebuilder is close to borrowing up to $10 bln. That'd effectively eliminate default risk. Being part-owned by Shenzhen helps, as does having some decent assets to entice lenders. The clincher is Beijing's heightened will to put a floor under house prices.

JD sends out bullish signal on China stocks

22 May 2024

The tech company's $1.8 bln convertible debt deal is the largest out of the People's Republic since 2021. The notes, which swap into equity at a 35% premium to the current share price, suggest optimism is returning to Chinese markets. Whether big IPOs will follow is less clear.

A confident India can afford to squeeze investors

21 May 2024

Finance Minister Nirmala Sitharaman dismissed reports the government, if re-elected, will majorly alter how asset sales are taxed. There is merit to the idea, however. It could help deepen the $550 bln corporate bond market. The buoyant rally in stocks provides an opportunity.

China stimulus starts with a bond, not a bang

17 May 2024

Beijing will issue $138 bln-worth of special sovereign debt. It's not much by itself, but combined with planned offerings from local governments, fiscal support could top 3.2% of GDP this year. It can spur ailing credit demand and speed up investment in strategic sectors.

AMC is the worst, and best, of public markets

15 May 2024

The theater chain’s shares leapt 135% on the return of a key 'meme stock' cheerleader. It promptly swapped debt for bubbly equity. For aspiring CFOs, the idea that public markets can randomly spit out cheap capital is tempting. For everyone else, the trade is a loser.