Corporate Debt

Cyprus’ bad debt cleanup has lessons for Italy

28 Aug 2018

Bank of Cyprus will sell 2.7 bln euros in non-performing loans to private equity group Apollo. A price of nearly half book value is higher than comparable deals in Italy or Greece, thanks to government reforms. That should lead to healthier, more profitable banks.

Italy’s Trump card shows bond market fragility

24 Aug 2018

The U.S. President offered to buy Italian debt, according to one newspaper. Donald Trump may want to help a eurosceptic government but has limited scope to mitigate the damage that Rome’s policies are inflicting on domestic asset prices. Help is better sought closer to home.

Kroenke’s Arsenal buyout is a game of two halves

7 Aug 2018

The U.S. mogul is buying out shareholders of the London soccer club, with the help of a $721 mln Deutsche Bank loan. By borrowing the funds himself, Kroenke avoids burdening the underperforming team’s finances. But once he has control, he may still leverage it up to pay dividends.

How Sergio Marchionne saved Fiat and Chrysler

30 Jul 2018

The automakers’ former boss, who has died at 66, rescued both from the wrecker’s yard. His push for breakups and consolidation also helped produce better shareholder returns than his main rivals. A new selection of Breakingviews columns offers a taste of his 14-year tenure.

HNA’s market thaw provides only cold comfort

20 Jul 2018

Three listed units of the troubled Chinese conglomerate lost a combined $1.5 bln in value after long trading halts ended. It signals a lack of confidence about HNA’s restructuring plans as it regroups without its late chairman. Pity investors trapped by a 10 pct downside limit.

Univision broadcasts a warning to today’s buyouts

11 Jul 2018

The Spanish language TV company is trying sell websites it bought two years ago. The Onion – no joke – was never a fit. Neither was a massive debt load imposed 11 years ago when five private owners bought it. With lenders now looser than ever, private equity risks painful reruns.

Chairman’s death intensifies HNA uncertainty

4 Jul 2018

The accidental death of co-founder Wang Jian adds to questions about the future of the embattled conglomerate. His precise remit at the closely held group was not clear. Unlike some other big private Chinese outfits, however, HNA was not reliant on a single leader.

Recordati take-under is painful reality check

2 Jul 2018

CVC is buying 52 pct of the Italian pharma group for 3 bln euros, a valuation 18 pct below the market price. A share rally following the death of patriarch Giovanni Recordati did not match growth prospects. Minority shareholders must now decide whether to hold out for more.

CVC’s Italian pharma foray could prompt a headache

28 Jun 2018

The buyout firm is in talks to acquire rare diseases player Recordati, worth 7 bln euro on the market. The group’s profit margins and international presence are appealing. But CVC may need to load on too much debt to secure decent returns.

AC Milan’s UEFA loss is Elliott’s gain

28 Jun 2018

The Italian soccer club has been excluded from next year’s Europa League given doubts over its finances. The ban likely curbs its struggling Chinese owners’ ability to resell it. But it boosts the chances that creditor Elliott ends up taking on the team at a rock-bottom price.

Euro banks’ leverage games mock Basel playbook

25 Jun 2018

The Bank for International Settlements says European lenders flatter their leverage ratios by shrinking balance sheets just before reporting dates. It shows how global rules are weakened by uneven implementation. The danger is that banks’ profits are riskier than they look.

UK estate agents wounded by taxes and technology

25 Jun 2018

Britain’s largest real estate broker, Countrywide, has become the latest to warn earnings will fall as transactions dwindle. Higher taxes have hit amateur landlords while online property companies are squeezing fees. Given high fixed costs, agents will struggle to plug the gap.

Trump gives China a fresh excuse to push bailouts

25 Jun 2018

Beijing will release $108 bln into the banking system to calm markets rattled by trade war talk. Unfortunately, officials want lenders to use most of the cash to swap bad debt for equity in ailing state commodity firms. The private sector needs the money more.

Altice’s $2.9 bln towers sale locks in 5G premium

21 Jun 2018

Patrick Drahi’s telecoms group has secured a high price for the possible sale of stakes in its French and Portuguese mobile towers. It’s a vote of confidence from private investors like KKR in new superfast networks. But it only makes a modest dent in Altice’s $36 bln debt pile.

China eases HNA’s glide path

19 Jun 2018

The troubled conglomerate has billions in debt coming due soon. Official pressure on banks to support HNA bonds could therefore help it refinance, minimising the risk of an unplanned financial accident. That also buys time for more selloffs to further sharpen its focus on travel.

Comcast throws $65 bln of caution to the wind

13 Jun 2018

The cable firm is offering 19 pct more than Disney to buy bits of Rupert Murdoch’s Fox – potentially leaving it slathered in $170 bln of debt. Boss Brian Roberts is normally a careful dealmaker. Embarking on this expensive, hostile pursuit suggests a serious fear of missing out.

Casino sell-off is part of a bigger debt gamble

12 Jun 2018

The French supermarket is selling 1.5 bln euros of assets to pay down loans. Controlling shareholder Rallye relies on dividends to service its own heavy debts. The risk is Chairman and CEO Jean-Charles Naouri is running the grocer for financial needs higher up the food chain.

Anbang appeal sends false signal

31 May 2018

The insurer’s ex-chairman wants to overturn a $10 bln fraud conviction. With another boss just exonerated, it looks as if China’s embattled tycoons are mounting a legal fightback. But the two cases are very distinct and Anbang’s sensitivity makes success highly unlikely.

UniCredit may be stuck with costly crisis capital

10 May 2018

The Italian bank should not be able to treat the proceeds of a 2009 hybrid issue as equity, a hedge fund argues. CEO Jean Pierre Mustier might prefer to get rid of the expensive instruments. But it’s hard to extract UniCredit from the transaction without upsetting investors.

Debt is harder to erase than Valeant’s name

8 May 2018

The drugmaker that fell from grace in 2015 says it has turned over a new leaf. It’s renaming itself, touting a return to organic growth and reducing borrowing. Behind the gloss and a raft of footnotes, though, is $25 bln of net debt atop a $7 bln firm with declining prospects.