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Tag >> Deals
Aug 10
2009

Charter bankruptcy could lead to tighter loan conditions

Posted by Ron F in DealsCreditCapitalBanking

Ron F

The reorganization plan for Charter Communications approved by unsecured creditors last month would exploit a loophole in bankruptcy law that could provoke a backlash by lenders, attorneys say.

While the exact extent of such a backlash is impossible to gauge at this point, restructuring lawyers said banks would respond by stiffening the terms of credit going forward if the plan for Charter goes through as currently structured.

Aug 04
2009

PepsiCo goes old school in sealing bottler deal

Posted by MQuinn in Deals

MQuinn

More than three months after making its initial offer, PepsiCo finally inked a deal to acquire the remaining shares of its two largest bottlers, Pepsi Bottling Group and PepsiAmericas.

But as media reports have mentioned, the final agreement wasn't reached in a boardroom or by bankers and lawyers passing term sheets back and forth until they got it right. No, PepsiCo CEO Indra Nooyi appeared to have had enough of all that nonsense. Instead, she invited Pepsi Bottling director Ira Hall to her home for a pow-wow, where the $36.50 per share deal was agreed to.


Aug 03
2009

Applying Black-Scholes to TARP warrants

Posted by Ron F in Obama AdministrationDealsCapitalBanks

Ron F

Here's a valuation conundrum for you. Goldman Sachs gets kudos for buying back the warrants it gave the government at the "full price" of $1.1 billlion, whereas J.P. Morgan Chase and other banks get a black eye for paying valuation firms to help them figure out what discount should be applied.

Then today I came across a piece by former Deutsche Bank investment banker Roger Ehrenberg, in which he argues that even full price is too little for such an option.  

Jul 23
2009

Frank would ban naked swaps trading

Posted by Ron F in RiskRegulationObama AdministrationFinanceDealsBanks

Ron F

I see that Barney Frank is open to the arguments we made here, and that's reassuring given the disaster that naked swaps created via AIG.

And I really can't fathom the criticism that Tim Backshall of Credit Derivatives Research is making here. That is, how does requiring that one party to a swap have an insurable business interest in the underlying debt prevent them from hedging their holdings?

Jul 14
2009

Goldman's golden goose: Credit default swaps

Posted by Bill Gerneglia in RiskRegulationrecessionObama AdministrationFinanceDealscompliancebankruptcyBanking

Bill Gerneglia

By now everyone knows that Goldman Sachs' big quarterly profit came from trading. But trading what?

This analysis suggests that its pot of gold lies in credit derivatives. The bank's exposure to credit default swaps as a percentage of assets was a whopping 1,048% as of March 31, far and away the most of any big bank. (The bank with the second highest exposure, HSBC, clocked in at less than 500%. The percentage of assets devoted to CDS at J.P. Morgan Chase, which has the biggest absolute exposure, was 323%.)

Jul 14
2009

Why even discuss a CIT bail-out?

Posted by Ron F in RiskRegulationrecessionObama AdministrationFinanceDealscomplianceBanking

Ron F

These guys make a good point about the talks regarding CIT. If the big, no-strings-attached banking bail-out worked, then CIT can be allowed to fail without causing anyone a moment of sleep, no?

Evidently not. Why else would there be all this huddling? Yet the only other reason cited here is that because CIT traditionally lent to small business, it would seem unfair to bail out the Goldmans and Citis of the world and not CIT.

Jul 10
2009

One man’s trash…

Posted by MQuinn in M&ADealsbankruptcy

MQuinn

While worldwide merger and acquisition activity in general continues its slog (volume down 40% in the first half 2009, compared to a year earlier), some companies have found keepers in the bankruptcy bargain bin.

Indeed, with five bankruptcy-related M&A deals announced this week, a total of 173 such deals have been struck year-to-date, according to data from Thomson Reuters. That's the highest level since the same period in 2004, when 202 bankruptcy-related deals were announced.

Jul 07
2009

Capex, anyone? How about some R&D or M&A?

Posted by Ron F in SpendingrecessionmanagementhiringDealsCash

Ron F

This article suggests that Microsoft and other companies that have recently tapped the debt markets will just sit on the money, which is hardly an encouraging sign for new capital investment, research and development, or even deal making.

That means that corporate treasurers don't have a lot of faith in prognostications of an economic recovery this year, or anything other than an anemic one.

Jul 06
2009

Mark Andreessen's green-tinted crystal ball

Posted by Ron F in TechnologyDeals

Ron F

All of us here are certainly into social networking, at least the professional kind. But how can anyone predict where Facebook's revenues will be in five years, even if his name is Mark Andreessen?

Didn't Rupert Murdoch have the same expectations for MySpace only a year or two ago?

Jul 06
2009

Seidman already spinning in his grave

Posted by Ron F in Dealscompliance

Ron F

Ryan Lizza's piece in the current issue of The New Yorker isn't a bad summary of the political dance that Washington is doing around the financial crisis, which is far from over. But to describe Sheila Bair's role at the FDIC as unprecedented is to ignore Big Bill Seidman's stint at the organization during the S&L meltdown.

Ancient history? Well, the rest of the article talks a great deal about the run-up to the current crisis. And a look back at what the FDIC did under Seidman and what he had to say about the on-going train wreck would have been instructive. (Sorry, the fact that banks' stock prices are up says nothing about the state of their balance sheets now that they no longer have to mark much of them to market.)

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