Credit

T. Rowe Price makes alt the new mainstream

28 Oct 2021

The money manager’s $4.2 bln purchase of loan specialist Oak Hill Advisors gives it a perch in the hot $1 trln market for private credit. Returns in that field may come down as investors pile in or growth suffer as rates rise. But T. Rowe is being characteristically cautious.

Capital Calls: Klarna, French vaccine, Philips

18 Oct 2021

Concise views on global finance: The $46 bln Swedish buy-now-pay-later company tries to outrun Britain’s financial watchdogs; Valneva’s Covid-19 shot may prove better than the UK’s home-grown version; the industrial giant sees light at the end of the supply-chain tunnel.

Breakdown: Buy Now, Pay Later’s bill is coming due

14 Oct 2021

The instalment-lending tool is reshaping how consumers buy online and could reach $300 bln by 2024. Banks are scrambling to catch up with upstarts like Klarna and Affirm, while regulators worry about unsustainable debts. Breakingviews explains why a reckoning is on its way.

Capital Calls: AMC, German pet retailer

8 Sep 2021

Concise views on global finance: The movie theater chain enjoyed bumper Labor Day attendance; a trio of private equity suitors are circling Zooplus.

Private credit gets bigger but not better

1 Sep 2021

Pension plans and insurers are pouring money into esoteric loans that aren’t widely traded. Set up by money managers like Blackstone or Apollo, such funds offer high yields and lower losses than public debt. Yet rapid growth may herald lower returns and bigger risks.

Italian data land grab comes at a price

31 Aug 2021

Fintech group ION has upped its bid for risk intelligence provider Cerved to 2 bln euros. An overall premium of 45% reflects growing demand for financial information. Offloading Cerved’s debt collection unit, worth perhaps 400 mln euros, would help recoup some of the cost.

Klarna’s list of suitors may not be that extensive

4 Aug 2021

Following the $29 bln swoop on Afterpay by Jack Dorsey’s Square, its $46 bln Swedish instalment-payment rival could be in play. Yet Klarna is pricey, not a pure pay-later player, and might not sell to a credit card giant. Stripe and PayPal look the most likely bidders.

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: GEO meme, United Parcel Service

9 Jun 2021

Concise views on global finance: The meme stock good-vs.-evil fairy tale is wearing thin with the private prison operator; the logistics company is focusing on high-margin deliveries rather than volume, and investors aren't loving it.

French investors are collateral damage in EY spat

24 May 2021

Paris-listed Solutions 30 published its 2020 annual report even though the audit firm didn’t sign off its accounts. Post Wirecard, it’s encouraging that auditors are taking a tougher stance. But with lenders potentially pulling credit, it leaves shareholders in a painful limbo.

Capital Calls: “Friends” reunion, SPACs in D.C.

24 May 2021

Concise views on global finance: AT&T's HBO Max is streaming a delayed 25-year reunion of the popular sitcom cast just as the company ditches its media assets; busybody U.S. Congress is taking a hands-off approach to blank-check firms.

Capital Calls: Peloton, Honest Co, Office Depot

5 May 2021

Concise views on global finance: Treadmill recall leaves investors in the workout app stranded; shares in Jessica Alba’s consumer packaged goods company opened more than 30% above their IPO price; the office-supply company paper-shuffles its way to a higher valuation.

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.

Capital Calls: Elon Musk, LeBron James

1 Apr 2021

Concise views on global finance in the Covid-19 era: Endeavor, Ari Emanuel’s entertainment group, is hoping the Tesla boss’s stardust will help a second attempt at an IPO; the basketball star’s stake in the Red Sox is a foil to Steve Cohen’s Mets deal.

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.

Corona Capital: UK’s quarantine, U.S. prisons

27 Jan 2021

Concise views on the pandemic’s corporate and financial fallout: Britain’s new quarantine rules are weak, but will still hurt the travel industry; and for-profit prisons lose business to the U.S. government.

China takes clumsy swipe at sloppy credit ratings

6 Jan 2021

Dagong Global has been ordered to help repay bondholders in a construction company that defaulted on over $200 mln. Courts are understandably getting tough with so much unpaid debt by top-rated issuers. This sort of punishment, however, will lead to fewer not better assessments.

Moody’s seal of approval comes unstuck in China

30 Dec 2020

Beijing suspended CCXI’s credit rating business after a top-marked miner defaulted soon after selling new debt. A 30% stake held by Moody’s suggests foreign influence didn’t upgrade the industry. Rising state issuance has made pricing risk even more political than financial.

Buy-now-pay-later exposes regulation blind spot

8 Dec 2020

Sweden’s Klarna and Australia’s Afterpay both allow punters to buy goods and defer payment. Opinion is divided over how regulators should treat any loss on the enabling financing. Balancing innovation and stability is hard, but the rules right now aren’t clear enough.

The Exchange: Brave new credit world

21 Jul 2020

The crisis unearthed land mines in the fixed-income market – many of which Arena Investors Chief Executive Dan Zwirn had previously identified. He now explains how to navigate this opaque universe with deep dives on leveraged finance, liquidity crunches and an activist Fed.