Corporate Debt

Obama’s tax reforms could get waylaid by business

26 Jan 2011

The president delivered on an idea he's been telegraphing for weeks: corporate tax reform. And there are hints he wants major changes. But some companies will lobby hard against losing tax breaks to pay for a rate cut. Even turning a smart proposal into law is no sure thing.

Does GE gain by lending the White House its CEO?

21 Jan 2011

Judging by the stock price, shareholders don't seem to mind that CEO Jeff Immelt will now head the president's jobs council. In one sense, it's payback for all the help GE has received. But while it has regained some lost mojo, GE still requires its boss's undivided attention.

Smiths validates case for its break-up

17 Jan 2011

The UK conglomerate's shares have jumped after it said it rebuffed a seemingly punchy $3.9 bln bid for its medical unit from buyout firm Apax. Smiths has good reason to think it can get a better price. Explaining why it shouldn't be dismantled looks harder.

Europe’s topsy-turvy credit world can’t last

5 Jan 2011

The euro zone crisis has turned bond markets upside down; many companies are now considered less risky than their governments. Though some firms may cope with sovereign turmoil, austerity measures and tighter credit mean corporations will face greater headwinds in 2011.

Citi’s Pandit pips GE’s Immelt in shrinkage race

13 Dec 2010

Both pledged to whittle down the balance sheets of the massive lending businesses whose dependence on shortterm funding forced them to rely on government help during the panic. There's still more to shrink, but Citi Holdings has a big lead over GE Capital heading into 2011.

Spain can learn from its big companies

26 Nov 2010

The Spanish prime minister has summoned the heads of the country's largest groups to enlist their help in shoring up the economy. It may just be a photo op, but Madrid could learn a thing or two from these companies about how to stabilise debts and deal with fickle markets.

Investors rightly bypassing C3POs for IPOs

23 Nov 2010

Buyout firms have a backlog of companies they want to resell to public markets. Most aren't new or even renewed, like GM. Many, like Harrah's, are indebted and offer little growth. But investors can distinguish a seethrough public offering, or C3PO, from a solid IPO.

Hybrids: a gentle reminder of the risks

9 Sep 2010

Investors' search for yield has spawned a revival in hybridbond issuance by corporates. These quasidebt, quasiequity securities are meant to be winwin, giving companies cheap finance and investors good income. But buyers should remember they've been burned by hybrids before.

GE shrinking into better shape

16 Jul 2010

The downsizing of the conglomerate's finance arm is making the firm healthier, as secondquarter figures illustrate. GE will eventually need revenue growth at its industrial arms. But for now, a bit of relative calm is giving the company the chance to get fitter.

BP teaches governance lesson: don’t trust formulas

18 Jun 2010

The crippled oil giant once had a chairman and a CEO perceived to be strong. Now it has two relative weaklings. Both combinations helped spawn a gigantic corporate disaster. The British governance model is flawed, but so are others. No system can work always and everywhere.

Tesco’s Leahy shows corporate virtues to the end

8 Jun 2010

The UK retail boss will step down after presiding over 14 years of relentless growth. The manner of his departure is typical of a man who honed key business skills: planning, process and careful doses of imagination and ambition. Typically, his successor is another Tesco lifer.

Synergies allow Tyco to pull a Brink’s Job

19 Jan 2010

The conglomerate has awakened from its scandalinduced slumber to buy Broadview Security a Brink s security spinoff for $1.9 bln. Investors seemed pleased, adding some $275 mln to Tyco s value. That s because the $150 mln of projected cost cuts make the deal a steal.

What if GE could start over with GE Capital?

14 Dec 2009

Imagine CEO Jeff Immelt could remake the troubled finance unit from scratch. Ideally, he'd confine it to businesses related to GE's core industrial strengths and its size to around $360 bln. Imagining, though, shows how difficult it will be to tame GE Capital.

Imagination hasn’t helped General Electric much

11 Nov 2009

The group s imaginative move into financial services has hobbled it relative to rival United Technologies, which is poised to purchase some of GE s assets. Though the industrial sides of the two companies look remarkably alike, the divergence in their fortunes is striking.

Gala Coral bets on just-enough restructuring

22 Oct 2009

Candover, Cinven and Permira piled leverage onto the UK betting firm when they became its third set of privateequity owners after the 2003 buyout. Gala now faces a complex restructuring; but the mooted plan will leave it with heavy debts and betting on an earnings turnaround.

Gucci fails to carry PPR through slump

21 Oct 2009

PPR and LVMH are archrival French luxury conglomerates. The recession has treated them quite differently. PPR has just posted lacklustre quarterly revenues. Its Gucci subsidiary's sales have been dropping. But larger LVMH s reliance on emerging markets has proven a shield.

NBC not best ad for GE’s capital allocation skills

16 Oct 2009

The US industrial conglomerate may finally part ways with the media arm it spent 24 years and at least $33bn assembling. A Comcast deal valuing NBC at $24bn wouldn t be a total disaster but Rob Cox and Aliza Rosenbaum say it s hardly a vindication of GE's management philosophy.

Index sale could bag Murdoch $860m

24 Aug 2009

That would be a welcome chunk of change for News Corp, which reportedly wants to offload the stock market index business it picked up when it bought Dow Jones in 2007. But the price tag pales in comparison to the value destroyed since CEO Murdoch closed the deal.

US corporate profit surprises may not last

23 Jul 2009

A third of the way through the US reporting season, secondquarter earnings look far better than expected thanks to cost and inventory cuts. But those are relatively quick, easy fixes. Longer term, profits depend on economic growth and rising sales. Those will come more slowly.

Uncle Sam may do GE shareholders a favour

17 Jul 2009

If the Obama administration's proposed regulatory reforms happen, the industrial group would probably have to hive off its GE Capital finance arm. The conglomerate s bosses are adamantly opposed to the idea. But GE s secondquarter results don t really help their case.