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Corporate financial policy deciphered (2)
In the upcoming years, European telecoms need to issue an average of €30 billion in bonds. But financial market instability suggests that even highly credit-worthy companies may have trouble gaining...
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Shoot the messenger?
Something about yesterday’s earnings announcement by JPMorgan has folks rattled: Third-quarter results included the following significant items:$1.9 billion pretax ($0.29 per share after-tax) benefit...
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Repo Tricks
Brokers dealers and investment banks get a substantial amount of their funding from the repo market. In a typical repo, party #1 (the borrower) gets funds from selling securities to party #2 (the...
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Shareholder value creation at Dynegy
Earlier this month, Dynegy filed for bankruptcy. Well, not the entire company, just one part of it. The bankruptcy seems to have been written on the wall after failed attempts to sell the entire...
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Yelling over Credit Lines
After arduous negotiations and risking approaching a dangerous zone, last week, Yell, the publisher of the yellow pages, reached an agreement to buy back £159.5m in debt. The company has seen continued...
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Can Hedging Save Greece?
As a part of its restructuring of debt, the Greek government has decided to issue GDP-linked securities: Each participating holder will also receive detachable GDP-linked Securities of the Republic...
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Exelon’s On- and Off-Balance Sheet Collateral Costs
In covering the Intercontinental Exchange’s decision to move its energy swap trades onto its futures exchange, the Wall Street Journal’s Jacob Bunge and Katy Burne cited data on the power company...
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Two Tales of Debt Financing
Debt financing is always a gamble. And often a seductive bet. The Financial Times’ Andrew Jack reports on the pharmaceutical company Valeant which has been on a buying spree financed by debt. For an...
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Can Hedging Save Cyprus?
Lenos Trigeorgis has a piece in the Financial Times’ Economists’ Forum advocating the use of GDP-linked bonds for Cyprus. Suppose that its steady-state GDP growth is 4 per cent and that fixed interest...
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Regret in the here and now, joy in a parallel universe
Steven Davidoff, the New York Times’ Deal Professor, thinks that management and shareholders at the Morgans Hotel Group got suckered back in October 2009 when they sold their souls a PIPE for cash....
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