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Jul 12

Aon bucks the trend toward corporate passivity

Posted by mcole in mergers and acquisitionsinsurancehuman resourcesdebtDealsCreditconsulting


Not every company is sitting on its hands until the economy improves. Insurance giant Aon is taking on a significant amount of short-term debt to acquire Hewitt Consulting for $4.9 billion and spend on its brand to exploit new opportunities.

The Hewitt deal will help Aon get a firm foothold in human resources and benefits outsourcing, significantly increasing Aon's market share in this area and positioning the company to take on rival insurance broker and consulting big Marsh and McLennan. The move also gives Aon a more balanced mix of insurance brokerage and consulting revenue.

Jul 07

China simplifies investment for foreign funds

Posted by mcole in private equitymergers and acquisitionsdue diligenceDealsChina


Last month, China's macroeconomic planning agency, the National Development and Reform Commission, said it was working on eliminating filing requirements for managers of small private equity funds.

It would facilitate investment for funds with less than C¥500 million ($73.8 million), including US funds, and potentially boost expansion of US portfolio companies into China.

Jun 30

Signs of a junk bond revival

Posted by mcole in junk bondsjunkhigh yield bondsDealscredit-rating agenciesCreditCash


High-yield bonds are slowly recovering from the fallout related to the European sovereign debt crisis.

Junk bond mutual funds saw inflows of $1.39 billion in the week ended June 28, according to data provided by Thomson Reuters. It's the second week in a row of inflows. Prior to that there were only outflows since the end of April.

Jun 29

Google’s glory days a thing of the past?

Posted by mcole in startuphiringGoogleFacebookCareers/Management


Google has proved itself to be a major US corporation, but that isn't always a good thing, at least among tech firms. In fact, Google in some ways has reason to regret the loss of its status as a start-up.

The company said in April its first-quarter results jumped 23 percent and the company posted good metrics, with a 7 percent increase in average cost-per-clicks, which fuels sales. But it wasn't enough for many investors. Now the Internet giant is trying to copy Facebook, which surpasses Google in many ways.

Jun 28

Mid-sized US companies look abroad for growth

Posted by mcole in unemploymentRiskgrowthglobal economydebtCreditconfidenceCareers/Management


In the midst of a slowdown of the US economic recovery and the possibility of a double-dip recession in Europe, US mid-sized businesses are remaining cautious about borrowing. But they are also relying less on cost cutting for growth, opting instead for international expansion, which could in turn boost the US economy.

According to a survey of nearly 650 US senior financial executives polled by HSBC's commercial banking division, US mid-sized businesses continue to express some caution, which is evident in their reluctance to take on new debt. "A surprising 60 percent of respondents stated that they have not applied for an increase in their credit line or for a new credit line in the past 12 months," HSBC said in a press release Monday.

Jun 23

Dividend increases a sign of weak economy

Posted by mcole in unemploymentshareholdersshare repurchaserecoverydividendsCash


While the US economy struggles to recover and the unemployment rate continues to hover around 10 percent, several companies have increased dividend payments in recent weeks for lack of opportunities to invest in their business.

In early June, Target authorized a 47 percent increase in its quarterly dividend, citing the fact that "cash generation is well above the amount needed for optimal reinvestment in its core business."

Jun 16

Calling the bottom in commercial real estate

Posted by mcole in RiskloansdistressDealscommunity bankscommercial real estateBanks


Small and medium-sized banks will suffer through another year or so of pressure related to commercial real estate. Even as prices slowly approach a bottom, prompting investors to gear up to grab distressed assets and revive the industry, it will take some time before banks see any benefits.

The implications are largest for community banks, whose concentrated exposure to this segment is pushing up their nonperforming loan ratios and pushing down their regulatory risk-adjusted capital, according to a report published by Standard & Poor's Tuesday.

Jun 15

Greece shows once again the need for rating agency reform

Posted by mcole in RiskGreecefinancial reformcredit-rating agenciesCredit RatingsCreditcompliance


The downgrade of Greece to junk status by Moody's Investors Service this week highlighted once again how actions of credit ratings agencies are becoming almost useless to investors. Nevertheless, ratings firms may escape any major changes to their business as financial reform is currently being discussed.

Greece has been trading as a junk credit for a couple of months, despite the 110 billion euros rescue package provided a month ago. As a result, Moody's downgrade is only confirming what market participants have long anticipated.

Jun 14

Private equity selling off assets

Posted by mcole in private equitymergers and acquisitionsIPODeals


The $1.3 billion acquisition of Bresnan Communications by Cablevision Monday is the latest instance of a private equity firm unloading a portfolio company, illustrating the rebound in PE activity over last year, especially with PE firms on the sellside of transactions.

It follows the $4 billion acquisition last week of Talecris Biotherapeutics, a portfolio company of Cerberus Capital Management, by Barcelona-based Grifols.

Jun 02

Another step backward on global accounting standards

Posted by mcole in RiskIFRSIASBFASBfair valuecomplianceAccounting


When it comes to convergence of accounting standards between the US and the rest of the world, it's often one step forward, two steps back.

Last week, as part of global convergence, the Financial Accounting Standards Board and the International Accounting Standards Board released a joint proposal to change accounting and reporting of financial instruments and the statement of comprehensive income. It was the first of a series of joint proposals to come from the two boards by the third quarter of 2010, representing an important push toward global accounting convergence.

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