Corporate Debt

Google antitrust trial crystallizes Apple’s risk

15 Nov 2023

Court testimony revealed that Alphabet’s search giant gives the iPhone maker 36% of ad revenue generated through its devices. The cost allows Google to argue it’s in a pay-to-play market. It also suggests that Apple and its shareholders have more to lose from the deal unwinding.

Palantir’s mythology is far too precious

13 Nov 2023

The $40 bln data analysis company trades at 14 times revenue, a big premium to most peers despite generating only modest growth. It also has failed to demonstrate operating leverage to justify the AI exuberance. Moreover, some odd capital allocation choices warrant a discount.

Lina Khan’s spirit haunts T-Mobile deal ghost

10 Nov 2023

Consumers are suing the $170 bln telecom company for its deal with Sprint. Given government watchdogs can’t bust up big tech, it seems ambitious. But recent jury verdicts illustrate rising movements against companies. Plus the hassle creates yet another deal impediment.

WeWork’s big splash ends as a drop in the bucket

7 Nov 2023

The shared-office company once valued at $47 bln has collapsed, with lenders taking over in bankruptcy. SoftBank and its fund backers will be licking $16 bln of wounds, but communal workspaces are here to stay. And commercial real estate investors have far bigger worries.

Vanke’s safety net models new face of China Inc

7 Nov 2023

The $18 bln property developer’s shares jumped after its owner Shenzhen Metro pledged unreserved support and a $1.4 bln tool kit should it need a rescue. As the state takes a bigger role in business, Vanke illustrates how that could reduce both returns and risks for investors.

Vans owner VF is due a wardrobe refresh

6 Nov 2023

The $6 bln apparel empire’s debt soared as shares sank 40% under its ex-CEO, whose costly deal for Supreme ran counter to its modus operandi. New boss Bracken Darrell’s cost-cutting plan has promise. Selling the streetwear brand and investing in known hits is the best next step.

Telecom Italia rival plan has too many pitfalls

3 Nov 2023

An ex-executive and a fund say the telco could raise 16 bln euros by offloading a Brazilian unit and other assets to slash its debt pile. That would spare it from selling its prized network to KKR. Yet bagging such valuations while executing a multi-step project looks tricky.

Tough dealmaking conditions dull Waystar’s shine

31 Oct 2023

The healthcare technology firm is angling for a stock-market listing on the back of rapid, acquisition-fueled growth. With a sale looking difficult and heavy debt bearing down, an IPO may be its private equity backers’ best option, but a mooted $8 bln valuation looks steep.

The case for a career in bond investing

27 Oct 2023

Rising rates and volatile markets have hammered the conventional case for buying fixed income securities. But higher yields, pockets of value in credit and a possible weakening of the strong US dollar mean there are still opportunities in bonds for budding portfolio managers.

Cooled auto hotheads give labor disputes hope

26 Oct 2023

Ford Motor’s new union agreement could cost $2 bln in pay rises. That stings, but is well short of earlier asks while also recompensing workers. Much about the agreement seems reasonable. As labor pressures continue, the agreement suggests sensible outcomes are possible.

Blackstone’s business is lumpy and that’s OK

19 Oct 2023

The asset manager regularly touts its steady, rising fund fees as a cushion against the stop-start business of buying and selling assets. The problem is that choppy markets have dampened both. They’ll no doubt return – it’s just a reminder that there’s no escaping the cycle.

David Solomon’s Goldman remix is audibly off-key

17 Oct 2023

The Wall Street firm is well short of a 15% return on equity goal, even absent consumer-bank snafus and property writedowns. Its CEO gave up DJ-ing, but promises Goldman can spin a new tune focused on more stable income. It will take much more to prove that’s attainable.

Buyout firms catch second-hand shopping fever

5 Oct 2023

Despite a 31% fall in fundraising across the industry since 2021, Goldman amassed $15 bln just to go thrifting for private equity portfolios. Such deals generally produce steadier returns, but a rush of bargain-hunters could boost valuations, making financial upcycling riskier.

Toilet maker artfully unclogs bondholder backup

29 Sep 2023

Embattled Ideal Standard has struck a $640 mln deal to be bought by Germany’s Villeroy & Boch. The key was persuading creditors to accept less than par on 2026 debt. Other struggling companies could make use of similar financial plumbing.

Evergrande is weak link in China’s property fix

25 Sep 2023

The developer’s debt rejig has fallen before the first hurdle. It can’t issue new notes because of an investigation. For all Sunac and Country Garden’s good news, Evergrande accounts for half of the trio’s $670 bln liabilities. Its struggles will hold back the entire market.

Capital Calls: US budget

21 Sep 2023

Concise views on global finance: US House Speaker Kevin McCarthy is siding with hardline conservatives to fund the government. Empowering the further-right flank narrows the already slim odds of new Ukraine aid, cannabis reform and crypto clarity.

Total’s green bet on Gautam Adani is a win-win

21 Sep 2023

The $160 bln oil major is doubling down on its Indian partner, even though units it backed before are among the tycoon's worst performers since a short attack. TotalEnergies’ green targets may be more pressing than the risk of Adani woes. Bullishness is easier now to justify too.

Capital Calls: Disney, Cazoo

20 Sep 2023

Concise views on global finance: Boss Bob Iger’s $60 bln splash on theme parks and cruises invites further scrutiny of the Magic Kingdom’s wild cash flow ride; the UK-based online car retailer, valued at $7 bln in a SPAC deal two years ago, is handing the keys to bondholders.

UBS bondholders tee up risky goldfish impression

20 Sep 2023

The $84 bln bank may issue contingent convertible bonds, months after a state-led takeover of Credit Suisse burned the defunct lender’s debt. Market prices suggest it may not pay a big penalty for Switzerland’s sins. That invites bank overseers to burn other CoCos in future.

China’s property price caps have two sharp edges

18 Sep 2023

Price caps were introduced in 2016 to contain runaway home prices. Ditching them now will allow indebted developers to sell down their bloated inventory and help the market find a bottom. Officials are flirting with the idea, but Beijing will need to brave the social fallout.