Corporate Debt

FOMO finally returns to Chinese equities

3 May 2024

After a $5 trln crash, a bull market in Hong Kong and surging inflows to mainland bourses are prompting some investors to up their allocations. Policy support from Beijing, buying by long-only funds and attractive valuations suggest the start of a long road to recovery.

Republic First is the good kind of bank failure

29 Apr 2024

The shuttered lender was low on equity and high on drama, home to years of lawsuits and board fights. Even with familiar balance-sheet issues, there’s little risk of knock-on effects elsewhere. Bank windups are working - though judging by placid depositors, maybe a bit too well.

Private credit paints a new scream for banks

22 Apr 2024

Lending against wealthy patrons’ art has been dominated by financial institutions. Sotheby’s $700 mln sale of bonds backed by such loans offers non-bank rivals a template to upend the status quo. A rebounding securitization market can feed this machine, if it fits a careful mold.

Blackstone’s cash pile will buy only so much time

18 Apr 2024

The investment giant is reaching into its $200 bln war chest, but selling less. Higher-for-longer rates also threaten to slow down deals. A protracted mismatch would sharpen the divide between fund backers focused on profit and shareholders benefiting from capital deployment.

Telecom tycoon ensnared by his hefty debt machine

18 Apr 2024

Patrick Drahi built the ocean-spanning Altice empire on the back of aggressive dealmaking and $60 bln of borrowing. The bill is coming due with interest rates elevated. In this Viewsroom podcast, Breakingviews columnists discuss what comes next as bondholders get restless.

Sotheby’s next hot auction: a Picasso-backed bond

11 Apr 2024

The auctioneer owned by Patrick Drahi is selling securities backed by collectors’ hoards. With only $34 bln of art-based lending, there’s scope to reach more borrowers. But there are good reasons why art, which is hard to verify and value, has resisted slice-and-dice financing.

How Patrick Drahi can clamber out of his debt hole

11 Apr 2024

The tycoon’s Altice telecom empire is straining under $60 bln of borrowings, and creditors of its French unit are gunning for a fight. Yet loose bond terms, and the debt’s low trading prices, lend Drahi an escape route. He just needs to hope investors have short memories.

‘Wilful default’ bond spat can shake Hong Kong

5 Apr 2024

A group of creditors including Asian buyout firm PAG say an education firm can but won't redeem a $315 mln offshore debt. It's unusual amid the surge in defaults by Chinese issuers, and suggests investors need to worry about better parts of their portfolios too. 

Thames Water fix requires everyone to take a bath

4 Apr 2024

One way to repair the ailing UK utility is to hike consumer bills. The government could also hose the holders of the group’s 17 bln pounds of net debt. That might make the politics of the sorry saga marginally less toxic – and even give Thames a shot at luring new investors.

Odd Washington deal creates anti-M&A synergy

28 Mar 2024

Senators on opposite ends of the political spectrum are joining forces to stop stock swaps like Capital One’s $35 bln Discover deal from being tax-free. The proposal probably wouldn’t generate much revenue. It does, however, build on the movement against corporate concentration.

UK’s leaky coffers are Thames Water’s lifeboat

28 Mar 2024

The utility is drowning in $19 bln of debt and may collapse in 2025 if its regulator doesn’t approve higher bills. A nationalisation could be the best solution but the government isn’t flush with cash. Unless PM Rishi Sunak breaks his fiscal rules, consumers will have to pay up.

Credit card suit takes swipe at perks programs

27 Mar 2024

A $30 bln settlement in a decades-old lawsuit will compel payment networks Visa and Mastercard to let retailers charge customers more to use certain cards – and to tell them why. As shoppers take notice, they may cool on fancy rewards programs.

Japan faces a reckoning with its zombie companies

5 Mar 2024

Big firms are ready for the onset of higher wages and the end of negative rates. Smaller rivals, which employ 60% of workers, risk being crushed. One in six already struggles to cover interest payments. If too many fail, they can derail confidence and the economic recovery. 

Overdraft fee reform has a big, small-bank flaw

19 Jan 2024

The US consumer watchdog’s assault against charges levied when accounts go into the red is a win for customers – but only those of the biggest banks. Small lenders are exempt, partly because of their political clout. Trouble is, they often bank the neediest bunch.

Blackstone partly cracks new private equity code

9 Jan 2024

Buyouts have been a drag on big asset managers whose investors now prize steadier income. The firm led by Steve Schwarzman wants to square the circle by raising capital with no expiry date from rich individuals. A risky outcome is that it perversely incentivizes a spending spree.

Convertibles will be 2024’s hot financial model

2 Jan 2024

Hybrid bonds, which fueled hedge fund billionaire Ken Griffin’s rise, sputtered after a $370 bln Covid-era boom. Refinancing needs are revving them back up as interest-cost savings lure new issuers like Duke Energy. New features should tempt investors to ride off with them again.

Altice’s best hope will be a Middle East lifeline

18 Dec 2023

Telecoms tycoon Patrick Drahi is dismantling his empire to cope with a $60 bln debt wall. Attracting new investors may be tricky given low growth and a corruption scandal. Luckily Gulf states like the UAE and Saudi Arabia are flush with cash and keen to grab Western assets.

Occidental ratchets up race to tame the shale boom

11 Dec 2023

The oil giant’s $12 bln CrownRock deal further consolidates the Permian, where rich finds have helped increase US oil production by a fifth since 2020. A focus on returns will restrain growth in the driller’s output. As more buyers crowd in, the shale explosion will be tempered.

Muddy Waters sticks a pin in Blackstone’s rump

8 Dec 2023

The short-seller says a mortgage fund run by Steve Schwarzman’s firm is doomed by struggling office properties. The reality may be more nuanced. But Muddy Waters is challenging a fundamental Blackstone selling-point: its ability to outrun the market, in real estate or elsewhere.

Capital Calls: Roche, Brookfield/Origin

4 Dec 2023

Concise views on global finance: The $224 bln Swiss drugmaker is splurging $2.7 bln on obesity drug developer Carmot; the Canadian investment firm’s joint $13 bln bid for Origin Energy has failed. The trick now is to show what lessons it’s learned from its 16-month-plus campaign.