Corporate Debt

Betting minnow turns high roller with $3 bln wager

9 Sep 2021

London-listed 888 is paying more than its current market value for William Hill’s non-U.S. assets. It’s a quick way to gain scale but pushes debt to a hairy 5 times EBITDA. Ample savings and the chance to diversify into licensed online games and sport make it a calculated punt.

Chancellor: Beware financial repression’s return

2 Sep 2021

The debt binge by governments and corporations following the financial crisis and Covid epidemic requires an economic and political preference for permanently low interest rates. It worked, to a degree after World War Two, but this time will be different, and more painful.

Huarong’s shareholders brace for more beatings

30 Aug 2021

The Chinese asset manager lost $16 bln last year and its indebted offshore subsidiary is still bleeding. A planned state-led restructuring will give creditors relief but dilute equity investors. The stock, down 75% in three years before being halted, is due further correction.

Italy’s bank rescue has side order of moral hazard

10 Aug 2021

UniCredit may buy most of sickly Monte dei Paschi, with government help. It’s unclear if that means taking on its junior debt, which would be a windfall for creditors at the expense of Italian taxpayers and EU rules. Yet bond markets are starting to hope for something juicy.

Chancellor: U.S. credit cycle close to overheating

30 Jul 2021

Home prices and private-sector borrowing have taken off and credit standards continue to deteriorate. The end may not be nigh, but overvalued stocks and a massive lending boom, especially to corporations, make U.S. financial markets a particularly dangerous place for investors.

Capital Calls: Chinese hacking, Tencent

19 Jul 2021

Concise views on global finance: When the only response to China hacks is harsh words, companies will pay the price; the $680 billion technology giant places a heavyweight bet on UK gaming group Sumo.

How to turn a software firm into a bitcoin wallet

9 Jun 2021

MicroStrategy’s holdings of the digital currency already make up over half of its $6 bln enterprise value. Now the business-analytics software group has sold $500 mln in junk bonds specifically to buy more. With crypto accounting wacky, it could make for a crazy ride.

FirstGroup rebels may rue waiting for the next bus

25 May 2021

Two shareholders of the UK transport operator may vote against a $4.6 bln sale of its U.S. businesses to EQT. While no knockout, the price looks fair given the lack of other certain offers. A delay could destabilise the company when it needs to focus on opportunities at home.

Drahi paints debt masterpiece with Sotheby’s bond

13 May 2021

The auction house owned by Patrick Drahi is raising $300 mln to fund a dividend. The tycoon may soon have recouped one-third of the cost of a 2019 acquisition by debt-funded payouts. The boom in such deals even for leveraged, cyclical businesses shows how desperate lenders are.

Capital Calls: Uber, Roblox

11 May 2021

Concise views on global finance: Free rides for Covid jabs won’t help the ride-hailing app’s labor battle with Washington; the online games platform’s year-on-year growth decelerated sharply in April.

Capital Calls: Pfizer, ConocoPhillips

4 May 2021

Concise views on global finance: About $6 bln of additional earnings from Covid vaccines at the U.S. drug giant should mean more capital returned to investors; the independent oil group is offloading stock in Canada-based Cenovus it collected as part of a deal four years ago.

Capital Calls: Endeavor’s Hollywood ending

29 Apr 2021

Concise views on global finance: The entertainment conglomerate’s IPO flipped the script on opening day.

Babcock CEO’s reset comes with valuation upside

9 Apr 2021

David Lockwood may soon unveil a writedown at the 1 bln pound UK engineering group, which is also saddled with heavy debt. Those concerns obscure the relatively promising trend of UK defence spending. Lockwood’s CV offers hope of a cleanup – and significantly higher share price.

UK’s Gupta merits net zero rescue in all senses

1 Apr 2021

The steel entrepreneur’s tottering industrial empire is a tricky candidate for a state bailout. But it could give the government a chance to decarbonise a major source of emissions. Done smartly, it may help Britain hit green goals and stabilise a perennially flaky sector.

Capital Calls: Defence IPO, ViacomCBS and GameStop

24 Mar 2021

Concise views on global finance in the Covid-19 era: Italy’s Leonardo postpones the initial public offering of its U.S. unit; ViacomCBS and GameStop's rising stocks give them both a chance to raise fresh cash.

Review: When “Ocean’s Eleven” meets Chapter 11

19 Mar 2021

“The Caesars Palace Coup” rolls a casino caper and legal thriller into one edifying book. Dense bankruptcy lingo sometimes bogs down the ruthless scrap over $18 bln of distressed debt. And it’s hard to find a Danny Ocean in a Wall Street dramatis personae full of Terry Benedicts.

Corporate debt party will survive rate storm

17 Mar 2021

Rising government bond yields are dragging up companies’ borrowing costs. Yet the premium that investors demand to buy debt issued by firms is still relatively low. Central banks’ asset buying and the prospect of lockdowns lifting mean credit markets will avoid too big a tantrum.

Capital Calls: American Airlines, Crypto PayPal

8 Mar 2021

Concise views on global finance in the Covid-19 era: The U.S. carrier is issuing new debt and hocking some airline miles to pay back the U.S. Treasury loan that carried restrictions on pay and dividends; PayPal investors give a shrug over another dive into bitcoin-land.

Next Hertz drivers face a hairy ride

4 Mar 2021

Hedge funds Knighthead and Certares want to lead an injection of up to $4.2 bln in equity to take the wheel at the bankrupt car-rental firm. It would restart less indebted and should be more efficient. The rise of ride-sharing, however, puts a speed limit on potential returns.

Sustainable debt may be too popular for own good

2 Mar 2021

Investors are piling into bonds sold by companies such as H&M or Tesco which punish issuers for missing environmental targets. Demand has been such that the funding is now dirt-cheap. That could distort the price of the securities, and their intended effect.