The worldwide slump in credit markets is likely to last for at least another year, triggering a reduction in leveraged buyouts, according to a survey of banks, private-equity managers and hedge funds in Europe.
Borrowing will be constrained as investors avoid the leveraged loans that fueled this year's record buyouts, accounting firm Grant Thornton UK LLP in London said today in a report based on a survey of 110 executives last month.
``The credit crunch is sending private equity back to basics,'' said David Ascott, head of private equity at Grant Thornton in London. ``We will see fewer assets bought and exits will need to be carefully considered.''
Bonds that helped Kohlberg Kravis Roberts & Co., Bain Capital LLC and Apax Partners Worldwide LLP pay for LBOs this year have dropped 15 percent below face value as record U.S. mortgage foreclosures sap demand for all but the highest-rated government notes. Banks have about $283 billion of LBO debt they planned selling, according to research by Bank of America Corp. in Charlotte, North Carolina.
LBOs have fallen to $157 billion so far in the second half of this year, from a record $579 billion in the first half, according to data compiled by Bloomberg.
microcapwatch.net
четверг, 29 ноября 2007 г.
U.S. Securitized Debt May Rally in First Quarter, Lehman Says
Bonds backed by consumer debt and mortgages in the U.S. may rebound in the first quarter, following record-high yield premiums demanded by investors to own the securities this month, according to Lehman Brothers Holdings Inc. analysts.
The average spread investors demand to hold agency, mortgage-backed, asset-backed and commercial mortgage-backed securities rather than Treasuries widened to 139 basis points this month, 30 basis points higher than the previous peak in May 2000, Lehman analysts, led by New York-based Jack Malvey, wrote in a report today. A basis point is 0.01 percentage point.
Asset-backed and commercial mortgage-backed bonds have the widest spreads, wrote Malvey, whose team won the top position for the seventh straight year in Institutional Investor magazine's annual poll of the best U.S. bond analysts. Securities backed by credit cards and auto loans yield 71 basis points more than bonds of top-rated investment-grade companies, the widest since 1992, according to the report.
The investment-grade securitized assets ``look exceptionally cheap relative to their spread volatility and versus pure corporate credit risk,'' Malvey wrote. ``The securitized space looks increasingly ripe for an early `First Quarter Effect''' rally.
A survey by the New York-based securities firm shows 39 percent of the respondents expect global capital market conditions to begin to improve from the second quarter of next year, followed by 24 percent who don't expect it to happen until the second half. Respondents who expect the start of a recovery in January accounted for 15 percent of those surveyed, while 12 percent said it will be in 2009, when the U.S. real estate market hits the bottom.
microcapwatch.net
The average spread investors demand to hold agency, mortgage-backed, asset-backed and commercial mortgage-backed securities rather than Treasuries widened to 139 basis points this month, 30 basis points higher than the previous peak in May 2000, Lehman analysts, led by New York-based Jack Malvey, wrote in a report today. A basis point is 0.01 percentage point.
Asset-backed and commercial mortgage-backed bonds have the widest spreads, wrote Malvey, whose team won the top position for the seventh straight year in Institutional Investor magazine's annual poll of the best U.S. bond analysts. Securities backed by credit cards and auto loans yield 71 basis points more than bonds of top-rated investment-grade companies, the widest since 1992, according to the report.
The investment-grade securitized assets ``look exceptionally cheap relative to their spread volatility and versus pure corporate credit risk,'' Malvey wrote. ``The securitized space looks increasingly ripe for an early `First Quarter Effect''' rally.
A survey by the New York-based securities firm shows 39 percent of the respondents expect global capital market conditions to begin to improve from the second quarter of next year, followed by 24 percent who don't expect it to happen until the second half. Respondents who expect the start of a recovery in January accounted for 15 percent of those surveyed, while 12 percent said it will be in 2009, when the U.S. real estate market hits the bottom.
microcapwatch.net
пятница, 23 ноября 2007 г.
U.S. Banks Ready to Move Forward on SIV `Superfund,' WSJ Says
Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co., which have been putting together a plan to revive credit markets, are likely to start asking other banks to sign up to specific financial terms next week, the Wall Street Journal reported, citing people familiar with the matter.
The plan is to create a so-called superfund amounting to $75 billion to $100 billion as a potential buyer of assets from structured investment vehicles, off-balance-sheet entities that have got into difficulties because of lack of liquidity in credit markets; so far, other banks have expressed informal interest, the newspaper said.
BlackRock Inc. is likely to be named as the fund's manager and it will help to set prices for assets, though it probably won't invest in the fund, the Journal added.
investorarticles.net
The plan is to create a so-called superfund amounting to $75 billion to $100 billion as a potential buyer of assets from structured investment vehicles, off-balance-sheet entities that have got into difficulties because of lack of liquidity in credit markets; so far, other banks have expressed informal interest, the newspaper said.
BlackRock Inc. is likely to be named as the fund's manager and it will help to set prices for assets, though it probably won't invest in the fund, the Journal added.
investorarticles.net
FGIC May Get Capital After Natixis Rescues Bond Unit
Financial Guaranty Insurance Co., the insurer for $315 billion of bonds, may get the capital it needs to avoid losing top credit rankings after French banks bailed out competitor CIFG Guaranty, Fitch Ratings said.
FGIC, controlled by PMI Group Inc., Blackstone Group LP, and Cypress Group, has at most three weeks to show it deserves AAA grades, Fitch analyst Thomas Abruzzo said in an interview yesterday from New York. Groupe Banque Populaire and Groupe Caisse d'Epargne agreed to take control of CIFG yesterday from their Natixis banking subsidiary and doubled the company's capital with a $1.5 billion investment.
``They'll do whatever is necessary to protect their ratings and their franchise,'' Abruzzo said of the companies. Fitch says New York-based FGIC, the fourth-largest debt guarantor, is the most vulnerable in the industry.
FGIC helped borrowers from the New York Yankees to the Alaska Railroad Corp. sell AAA bonds. Mounting downgrades of insured debt backed by assets such as mortgages are raising concerns about the stability of FGIC, MBIA Inc., Ambac Financial Group Inc. and their competitors, as well as the safety of the $2.4 trillion of securities they guarantee. The companies are being reviewed by Moody's Investors Service and Fitch.
investorarticles.net
FGIC, controlled by PMI Group Inc., Blackstone Group LP, and Cypress Group, has at most three weeks to show it deserves AAA grades, Fitch analyst Thomas Abruzzo said in an interview yesterday from New York. Groupe Banque Populaire and Groupe Caisse d'Epargne agreed to take control of CIFG yesterday from their Natixis banking subsidiary and doubled the company's capital with a $1.5 billion investment.
``They'll do whatever is necessary to protect their ratings and their franchise,'' Abruzzo said of the companies. Fitch says New York-based FGIC, the fourth-largest debt guarantor, is the most vulnerable in the industry.
FGIC helped borrowers from the New York Yankees to the Alaska Railroad Corp. sell AAA bonds. Mounting downgrades of insured debt backed by assets such as mortgages are raising concerns about the stability of FGIC, MBIA Inc., Ambac Financial Group Inc. and their competitors, as well as the safety of the $2.4 trillion of securities they guarantee. The companies are being reviewed by Moody's Investors Service and Fitch.
investorarticles.net
среда, 21 ноября 2007 г.
European Bonds Advance, Pushing Two-Year Yields to 11-Month Low
European government bonds opened higher, pushing two-year yields to their lowest in 11 months.
The yield on the two-year German note fell 5 basis points to 3.68 percent by 7:05 a.m. in London. The price of the 4 percent security due September 2009 rose 0.08, or 80 euro cents per 1,000-euro ($1,483) face amount, to 100.54.
The yield on the 10-year bund, Europe's benchmark, dropped 3 basis points to 4.02 percent.
pennystock-news.net
The yield on the two-year German note fell 5 basis points to 3.68 percent by 7:05 a.m. in London. The price of the 4 percent security due September 2009 rose 0.08, or 80 euro cents per 1,000-euro ($1,483) face amount, to 100.54.
The yield on the 10-year bund, Europe's benchmark, dropped 3 basis points to 4.02 percent.
pennystock-news.net
Argentina, Mexico, Venezuela: Local Bond and Currency Preview
The following events and economic reports may influence trading in Latin American local bonds and currencies today. Bond yields and exchange rates are from the previous day's session.
Argentina: President Nestor Kirchner yesterday said the unemployment rate fell to 8.1 percent in the third quarter, the lowest since October 1992, compared with 8.5 percent in the second quarter. Industrial production rose 9.3 percent to 9.5 percent for the 12 months through October, Kirchner said.
The national statistics institute is scheduled to release its third-quarter unemployment report Nov. 22 and industrial production data on Nov. 23.
The yield on Argentina's 5.83 percent inflation-linked peso note due in December 2033 fell 1 basis point to 8.57 percent, according to Citigroup Inc.'s unit in Argentina.
Argentina's peso was little changed at 3.1315 pesos per dollar.
Mexico: The unemployment rate probably fell to 3.81 percent in October, from 3.87 percent the previous month, according to the median forecast of economists surveyed by Bloomberg News.
The government is scheduled to release the data at 3:30 p.m. New York time.
The yield on the 7.25 peso-denominated bonds due in December 2016 rose 4 basis points to 8.09 percent, according to Banco Santander SA.
Mexico's peso rose 0.3 percent to 10.966 per dollar.
Venezuela: The country plans to sell $250 million of dollar-denominated bonds due in 2038 starting today. Venezuela also plans to offer 268.8 billion bolivars ($125.2 million) of 10.37 percent local-currency bonds due in May 2013 and 268.8 billion bolivars of 10.37 percent bolivar securities maturing May 2014, the Finance Ministry said in a statement yesterday. The government plans to accept bids today and tomorrow, and will announce results on Nov. 23.
The bolivar gained 1.6 percent to 6,300 bolivars per U.S. dollar in the unregulated market, traders said.
pennystock-news.net
Argentina: President Nestor Kirchner yesterday said the unemployment rate fell to 8.1 percent in the third quarter, the lowest since October 1992, compared with 8.5 percent in the second quarter. Industrial production rose 9.3 percent to 9.5 percent for the 12 months through October, Kirchner said.
The national statistics institute is scheduled to release its third-quarter unemployment report Nov. 22 and industrial production data on Nov. 23.
The yield on Argentina's 5.83 percent inflation-linked peso note due in December 2033 fell 1 basis point to 8.57 percent, according to Citigroup Inc.'s unit in Argentina.
Argentina's peso was little changed at 3.1315 pesos per dollar.
Mexico: The unemployment rate probably fell to 3.81 percent in October, from 3.87 percent the previous month, according to the median forecast of economists surveyed by Bloomberg News.
The government is scheduled to release the data at 3:30 p.m. New York time.
The yield on the 7.25 peso-denominated bonds due in December 2016 rose 4 basis points to 8.09 percent, according to Banco Santander SA.
Mexico's peso rose 0.3 percent to 10.966 per dollar.
Venezuela: The country plans to sell $250 million of dollar-denominated bonds due in 2038 starting today. Venezuela also plans to offer 268.8 billion bolivars ($125.2 million) of 10.37 percent local-currency bonds due in May 2013 and 268.8 billion bolivars of 10.37 percent bolivar securities maturing May 2014, the Finance Ministry said in a statement yesterday. The government plans to accept bids today and tomorrow, and will announce results on Nov. 23.
The bolivar gained 1.6 percent to 6,300 bolivars per U.S. dollar in the unregulated market, traders said.
pennystock-news.net
понедельник, 19 ноября 2007 г.
More Economists See U.S. Recession Ahead, Business Group Says
The number of economists forecasting the U.S. will slip into recession almost doubled over the last two months, according to a survey by the National Association for Business Economics.
Nine of 50 economists pegged the odds of a contraction over the next 12 months at 50 percent or higher, according to a poll taken from Oct. 22 to Nov. 6. Just five of 46 held a similar view in September.
The spillover from the biggest housing slump in 16 years, turmoil in financial markets and higher energy prices will cause growth to slow to an annual pace of 1.5 percent this quarter, less than the survey participants previously forecast. More than two-thirds of those polled said the chance of recession was at least 25 percent.
``While the U.S. economy faces a higher risk of recession from credit markets, housing and energy prices, NABE's panelists still do not see recession as the most likely outcome,'' said Ellen Hughes-Cromwick, the group's president and chief economist at Ford Motor Co., in a statement.
The economy will expand 2.6 percent from now to next year's fourth quarter, according to the survey. While that is lower than September's forecast, it would still surpass the 2.4 percent projected for 2007.
The survey's median forecast for fourth-quarter growth matched the projection in a Bloomberg News survey also taken earlier this month. Many of the economists surveyed by NABE also participated in the Bloomberg poll.
makemoremoney-usa.com
Nine of 50 economists pegged the odds of a contraction over the next 12 months at 50 percent or higher, according to a poll taken from Oct. 22 to Nov. 6. Just five of 46 held a similar view in September.
The spillover from the biggest housing slump in 16 years, turmoil in financial markets and higher energy prices will cause growth to slow to an annual pace of 1.5 percent this quarter, less than the survey participants previously forecast. More than two-thirds of those polled said the chance of recession was at least 25 percent.
``While the U.S. economy faces a higher risk of recession from credit markets, housing and energy prices, NABE's panelists still do not see recession as the most likely outcome,'' said Ellen Hughes-Cromwick, the group's president and chief economist at Ford Motor Co., in a statement.
The economy will expand 2.6 percent from now to next year's fourth quarter, according to the survey. While that is lower than September's forecast, it would still surpass the 2.4 percent projected for 2007.
The survey's median forecast for fourth-quarter growth matched the projection in a Bloomberg News survey also taken earlier this month. Many of the economists surveyed by NABE also participated in the Bloomberg poll.
makemoremoney-usa.com
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