1) Despite volatility in financial markets in 2015 from events like the slowdown in China and falling oil prices, corporate funding still reached near-record levels of $6.02 trillion in 2015.
2) The largest source of funding for high-quality corporations was investment grade loans, which increased 6% to $1.65 trillion and exceeded investment grade bonds for only the second time since the financial crisis.
3) Mergers and acquisitions drove this increase in investment grade loans, with large deals requiring bridge financing making up 38% of the top 20 deals for the year.
Bloomberg Intelligence: US Financials Outlook 2015Bloomberg LP
Regulation will continue to be top of mind for U.S. financial institutions in 2015 as new standards around capital requirements and overall funding structure may impact returns. Investors will also be watching long term interest rates as rising rates will be key to improving revenue growth.
Mercer Capital's Value Focus: Auto Dealer Industry | Data as of Mid-Year 2020Mercer Capital
Mercer Capital's Auto Dealer Industry newsletter provides perspective on valuation issues. Each newsletter also includes a macroeconomic trends, industry trends, and guideline public company metrics.
Etude PwC sur les opérations de fusions et acquisitions dans le secteur banca...PwC France
The document discusses how banking mergers and acquisitions (M&A) are evolving in a new environment shaped by long-term trends and short-term factors. It notes that banking M&A has declined significantly since the financial crisis but will remain important for adaptation. Key drivers changing banking M&A include economic growth in emerging markets, increasing banking integration globally, ongoing regulatory reforms, and strategic shifts in goals and participants. The document then analyzes how banking M&A is evolving differently across key regions and through other transactions like loan sales.
Mercer Capital's Bank Watch | December 2021 | Bank M&A 2022 | Gaining AltitudeMercer Capital
Brought to you by the Financial Institutions Team of Mercer Capital, this monthly newsletter is focused on bank activity in five U.S. regions. Bank Watch highlights various banking metrics, including public market indicators, M&A market indicators, and key indices of the top financial institutions, providing insight into financial institution valuation issues.
BoyarMiller Breakfast Forum: The Current State of the Capital Markets 2016BoyarMiller
As part of its ongoing Breakfast Forum series, BoyarMiller gathered industry experts for a panel discussion on the Current State of the Capital Markets. Speakers included Drew Kanaly with Kanaly Trust, Cliff Atherton with GulfStar Group and John Sarvadi with Texas Capital Bank, LLC.
More online: http://www.boyarmiller.com/news-and-publications/events/breakfast-forum-current-state-capital-markets-2016/
Bloomberg Intelligence: US Financials Outlook 2015Bloomberg LP
Regulation will continue to be top of mind for U.S. financial institutions in 2015 as new standards around capital requirements and overall funding structure may impact returns. Investors will also be watching long term interest rates as rising rates will be key to improving revenue growth.
Mercer Capital's Value Focus: Auto Dealer Industry | Data as of Mid-Year 2020Mercer Capital
Mercer Capital's Auto Dealer Industry newsletter provides perspective on valuation issues. Each newsletter also includes a macroeconomic trends, industry trends, and guideline public company metrics.
Etude PwC sur les opérations de fusions et acquisitions dans le secteur banca...PwC France
The document discusses how banking mergers and acquisitions (M&A) are evolving in a new environment shaped by long-term trends and short-term factors. It notes that banking M&A has declined significantly since the financial crisis but will remain important for adaptation. Key drivers changing banking M&A include economic growth in emerging markets, increasing banking integration globally, ongoing regulatory reforms, and strategic shifts in goals and participants. The document then analyzes how banking M&A is evolving differently across key regions and through other transactions like loan sales.
Mercer Capital's Bank Watch | December 2021 | Bank M&A 2022 | Gaining AltitudeMercer Capital
Brought to you by the Financial Institutions Team of Mercer Capital, this monthly newsletter is focused on bank activity in five U.S. regions. Bank Watch highlights various banking metrics, including public market indicators, M&A market indicators, and key indices of the top financial institutions, providing insight into financial institution valuation issues.
BoyarMiller Breakfast Forum: The Current State of the Capital Markets 2016BoyarMiller
As part of its ongoing Breakfast Forum series, BoyarMiller gathered industry experts for a panel discussion on the Current State of the Capital Markets. Speakers included Drew Kanaly with Kanaly Trust, Cliff Atherton with GulfStar Group and John Sarvadi with Texas Capital Bank, LLC.
More online: http://www.boyarmiller.com/news-and-publications/events/breakfast-forum-current-state-capital-markets-2016/
The market for sustainable investments has grown to over $12 trillion in the U.S. and the movement of investable assets into sustainable strategies is expected to accelerate. The update reviews the growth of sustainable investing over the last decade and considers the valuation implications for your RIA.
- The document discusses the state of the US and European non-performing loan markets based on a survey conducted by Ernst & Young.
- In the US, banks have improved earnings and loan quality in recent years but still face risks from high levels of non-current loans and maturing commercial real estate loans.
- Meanwhile, the European NPL market is emerging as banks look to reduce €1 trillion in NPLs on their balance sheets, attracting both domestic and international investors, particularly to loans in Germany, the UK, Ireland and Spain.
08467 thought leadership_marine_sector_v14White & Case
Restructuring & Beyond: The marine industry’s routes to safety
Survival strategies and new opportunities for companies, banks and investors
in the marine sector
Corporate debt in emerging markets quadrupled between 2004-2014, rising to over $18 trillion. The composition of debt has shifted from loans to bonds. While greater leverage can boost growth, rapidly rising debt raises financial stability concerns. This chapter examines the factors driving emerging market leverage growth over the past decade using large databases. It finds that global factors like accommodative monetary policy in advanced economies have played a larger role than country or firm specific factors. Leverage has increased most in cyclical sectors like construction and has been associated with rising foreign currency exposure. Despite weaker balance sheets, emerging market firms have issued bonds at better terms by taking advantage of favorable global conditions. Policy recommendations include monitoring vulnerable firms and sectors closely, improving corporate debt
BoyarMiller Forum: The Current State of the Capital Markets 2016BoyarMiller
As part of its ongoing Breakfast Forum series, BoyarMiller gathered industry experts for a panel discussion on the Current State of the Capital Markets. Speakers included:
- Drew Kanaly, Kanaly Trust – Equity & the Public Markets
- Cliff Atherton, GulfStar Group – Private Equity and M&A
- John Sarvadi, Texas Capital Bank – Commercial Banking & Real Estate Lending
- Investors should expect continued market volatility in 2016 due to ongoing concerns over weak global growth.
- The advisor recommends trimming stocks, bonds, and cash and focusing on alternatives like high-yield bonds and hedged equity strategies that offer gains less correlated to traditional assets.
- High-yield bonds in particular offer attractive yields of around 7.5% that exceed stocks and Treasury bonds, and they have historically held up better than other bonds and stocks during market declines.
Mercer Capital's Value Focus: Venture Capital | Mid-Year 2016Mercer Capital
Mercer Capital's Venture Capital newsletter provides perspective on some of the most relevant market trends affecting venture capital firms and other financial sponsors.
The document discusses how specialty finance firms have filled gaps in credit availability left by major banks since the recession. Specialty finance provides credit to consumers and small businesses through non-traditional means. It plays a critical role by extending credit to higher risk borrowers who cannot access capital through traditional banks. The document outlines different types of specialty finance like consumer loans, asset-based lending, and crowd funding that provide alternative sources of capital for borrowers and investment opportunities.
This newsletter introduces a new publication called "EYE ON THE MARKETS" that will analyze macroeconomic trends, investment management, and equity market movements. The author argues that macro events have an overwhelming influence on stock markets, and periods of calm have been interrupted by market sell-offs due to crises in Europe, the US, and Asia. Investors need to carefully manage their portfolios and prepare contingency plans for different scenarios. Some positive factors are signs of recovery in corporate earnings, manufacturing, and technology, though continued global uncertainties remain.
The Canadian housing market and economy showed signs of recovery in October. Home sales and prices increased across most of Canada, with the national average home price rising 13.6% year-over-year. The strong housing market recovery has contributed to Canada being one of the first developed nations to emerge from recession. While exports may be dampened by a stronger Canadian dollar, private investment and consumer spending are expected to support continued economic growth. Overall, recent data indicates Canada is well-positioned for a sustained rebound from the economic downturn.
Office investment sales volume in the Washington D.C. area increased 36% in 2014 compared to 2013, with core assets trading at higher valuations due to low interest rates and available capital. Capitalization rates for core assets declined nearly 50 basis points from 2013 to 2014. While the leasing market remains weak with high vacancies, the capital market continues to outperform due to investment security from the large government presence. As the market transitions away from government dependence, more secondary and tertiary assets may come to market if leasing conditions do not improve. Class B assets in transit-oriented locations present opportunities for higher returns compared to core assets.
The 2015 outlook for commercial real estate and commercial mortgage-backed securities (CMBS) is positive but returns are expected to moderate. Growth will depend more on increases in net operating income rather than declining cap rates. Occupancy rates are projected to remain stable or improve across major property types except multifamily and lodging, which may have peaked. Construction pipelines are growing in some markets, which could impact vacancy levels. Demand trends vary across major and non-major markets. The industrial sector remains resilient due to e-commerce and manufacturing.
BoyarMiller Forum: Houston Commercial Real Estate Markets 2017 OutlookBoyarMiller
The document discusses trends in the Houston commercial real estate market and retail industry. It notes that Houston has experienced strong annual job and population growth. Holiday retail sales are forecast to increase 3.6% in 2016 compared to the 10-year average of 2.5%. Online and mobile shopping continue to be growth areas. Several planned and recently acquired grocery-anchored developments in the Houston area are highlighted. NewQuest Investment Company, a buyer of grocery-anchored properties, is also summarized.
Evaluating Sovereign Risk: Debt and Capital Markets. Derrill Allatt, Managing Partner, NewstatePartners, LLP
The panel will address the current state of sovereign capital markets, the realities of issuing government debt, and the future state of financing government expenditure.
BoyarMiller Breakfast Forum: The Houston Commercial Real Estate Markets – Wha...BoyarMiller
As part of its ongoing Breakfast Forum series, BoyarMiller gathered industry experts for a panel discussion on the look ahead for Houston’s Commercial Real Estate for 2017. Speakers included Allen Crosswell with NewQuest Crosswell, Jonathan Brinsden with Midway and John Nicholson with Avera Companies.
The document discusses the performance of the Odey European Inc fund in December 2015. It summarizes the positive and negative contributions from various long and short equity positions. It then analyzes economic and market conditions, including concerns about bubbles in China, falling oil prices, and central banks' responses to risky lending behaviors through interest rate policies. The document warns that markets may be fragile given high valuations and falling corporate profits, and that a significant market correction is possible in the coming year.
Este documento explica qué es un hiato y las reglas de acentuación para palabras con hiatos. Un hiato es cuando dos vocales seguidas pertenecen a sílabas diferentes. Las palabras con hiatos siguen las normas generales de acentuación, excepto cuando el hiato está formado por una vocal cerrada tónica como la i o la u. El documento proporciona ejemplos de palabras con diferentes tipos de hiatos.
El documento resume los conceptos básicos sobre la sílaba en español, incluyendo su definición, estructuras silábicas, secuencias vocálicas, acentuación y clases de palabras según la posición de la sílaba tónica.
Este documento explica las reglas básicas de acentuación en español. Define el acento como la sílaba con mayor fuerza de voz dentro de una palabra. Explica que la tilde indica esta sílaba tónica y que las palabras se clasifican como agudas, graves o esdrújulas dependiendo de la posición de la sílaba tónica. También cubre casos especiales de acentuación como el hiato especial, donde la vocal cerrada recibe siempre el acento, y la acentuación diacrítica que diferencia palabras homógrafas.
Este documento resume las reglas de acentuación en español. Explica que las palabras se dividen en agudas, llanas, esdrújulas y sobresdrújulas dependiendo de la sílaba tónica. Luego detalla las reglas para saber si una palabra lleva tilde o no según su categoría y terminación. Por último, indica que los adverbios en -mente conservan la tilde del adjetivo del que derivan.
Palabras agudas, graves, esdrújulas y sobreesdrújulasfjte
Este documento explica los diferentes tipos de palabras en español según dónde recae el acento tónico: agudas (última sílaba), graves (penúltima sílaba), esdrújulas (antepenúltima sílaba) y sobresdrújulas (anterior a la antepenúltima sílaba). También describe las reglas para tildar cada tipo de palabra. Por ejemplo, las palabras agudas se tildan cuando terminan en n, s o vocal, mientras que las graves se tildan cuando no terminan en n o s.
The market for sustainable investments has grown to over $12 trillion in the U.S. and the movement of investable assets into sustainable strategies is expected to accelerate. The update reviews the growth of sustainable investing over the last decade and considers the valuation implications for your RIA.
- The document discusses the state of the US and European non-performing loan markets based on a survey conducted by Ernst & Young.
- In the US, banks have improved earnings and loan quality in recent years but still face risks from high levels of non-current loans and maturing commercial real estate loans.
- Meanwhile, the European NPL market is emerging as banks look to reduce €1 trillion in NPLs on their balance sheets, attracting both domestic and international investors, particularly to loans in Germany, the UK, Ireland and Spain.
08467 thought leadership_marine_sector_v14White & Case
Restructuring & Beyond: The marine industry’s routes to safety
Survival strategies and new opportunities for companies, banks and investors
in the marine sector
Corporate debt in emerging markets quadrupled between 2004-2014, rising to over $18 trillion. The composition of debt has shifted from loans to bonds. While greater leverage can boost growth, rapidly rising debt raises financial stability concerns. This chapter examines the factors driving emerging market leverage growth over the past decade using large databases. It finds that global factors like accommodative monetary policy in advanced economies have played a larger role than country or firm specific factors. Leverage has increased most in cyclical sectors like construction and has been associated with rising foreign currency exposure. Despite weaker balance sheets, emerging market firms have issued bonds at better terms by taking advantage of favorable global conditions. Policy recommendations include monitoring vulnerable firms and sectors closely, improving corporate debt
BoyarMiller Forum: The Current State of the Capital Markets 2016BoyarMiller
As part of its ongoing Breakfast Forum series, BoyarMiller gathered industry experts for a panel discussion on the Current State of the Capital Markets. Speakers included:
- Drew Kanaly, Kanaly Trust – Equity & the Public Markets
- Cliff Atherton, GulfStar Group – Private Equity and M&A
- John Sarvadi, Texas Capital Bank – Commercial Banking & Real Estate Lending
- Investors should expect continued market volatility in 2016 due to ongoing concerns over weak global growth.
- The advisor recommends trimming stocks, bonds, and cash and focusing on alternatives like high-yield bonds and hedged equity strategies that offer gains less correlated to traditional assets.
- High-yield bonds in particular offer attractive yields of around 7.5% that exceed stocks and Treasury bonds, and they have historically held up better than other bonds and stocks during market declines.
Mercer Capital's Value Focus: Venture Capital | Mid-Year 2016Mercer Capital
Mercer Capital's Venture Capital newsletter provides perspective on some of the most relevant market trends affecting venture capital firms and other financial sponsors.
The document discusses how specialty finance firms have filled gaps in credit availability left by major banks since the recession. Specialty finance provides credit to consumers and small businesses through non-traditional means. It plays a critical role by extending credit to higher risk borrowers who cannot access capital through traditional banks. The document outlines different types of specialty finance like consumer loans, asset-based lending, and crowd funding that provide alternative sources of capital for borrowers and investment opportunities.
This newsletter introduces a new publication called "EYE ON THE MARKETS" that will analyze macroeconomic trends, investment management, and equity market movements. The author argues that macro events have an overwhelming influence on stock markets, and periods of calm have been interrupted by market sell-offs due to crises in Europe, the US, and Asia. Investors need to carefully manage their portfolios and prepare contingency plans for different scenarios. Some positive factors are signs of recovery in corporate earnings, manufacturing, and technology, though continued global uncertainties remain.
The Canadian housing market and economy showed signs of recovery in October. Home sales and prices increased across most of Canada, with the national average home price rising 13.6% year-over-year. The strong housing market recovery has contributed to Canada being one of the first developed nations to emerge from recession. While exports may be dampened by a stronger Canadian dollar, private investment and consumer spending are expected to support continued economic growth. Overall, recent data indicates Canada is well-positioned for a sustained rebound from the economic downturn.
Office investment sales volume in the Washington D.C. area increased 36% in 2014 compared to 2013, with core assets trading at higher valuations due to low interest rates and available capital. Capitalization rates for core assets declined nearly 50 basis points from 2013 to 2014. While the leasing market remains weak with high vacancies, the capital market continues to outperform due to investment security from the large government presence. As the market transitions away from government dependence, more secondary and tertiary assets may come to market if leasing conditions do not improve. Class B assets in transit-oriented locations present opportunities for higher returns compared to core assets.
The 2015 outlook for commercial real estate and commercial mortgage-backed securities (CMBS) is positive but returns are expected to moderate. Growth will depend more on increases in net operating income rather than declining cap rates. Occupancy rates are projected to remain stable or improve across major property types except multifamily and lodging, which may have peaked. Construction pipelines are growing in some markets, which could impact vacancy levels. Demand trends vary across major and non-major markets. The industrial sector remains resilient due to e-commerce and manufacturing.
BoyarMiller Forum: Houston Commercial Real Estate Markets 2017 OutlookBoyarMiller
The document discusses trends in the Houston commercial real estate market and retail industry. It notes that Houston has experienced strong annual job and population growth. Holiday retail sales are forecast to increase 3.6% in 2016 compared to the 10-year average of 2.5%. Online and mobile shopping continue to be growth areas. Several planned and recently acquired grocery-anchored developments in the Houston area are highlighted. NewQuest Investment Company, a buyer of grocery-anchored properties, is also summarized.
Evaluating Sovereign Risk: Debt and Capital Markets. Derrill Allatt, Managing Partner, NewstatePartners, LLP
The panel will address the current state of sovereign capital markets, the realities of issuing government debt, and the future state of financing government expenditure.
BoyarMiller Breakfast Forum: The Houston Commercial Real Estate Markets – Wha...BoyarMiller
As part of its ongoing Breakfast Forum series, BoyarMiller gathered industry experts for a panel discussion on the look ahead for Houston’s Commercial Real Estate for 2017. Speakers included Allen Crosswell with NewQuest Crosswell, Jonathan Brinsden with Midway and John Nicholson with Avera Companies.
The document discusses the performance of the Odey European Inc fund in December 2015. It summarizes the positive and negative contributions from various long and short equity positions. It then analyzes economic and market conditions, including concerns about bubbles in China, falling oil prices, and central banks' responses to risky lending behaviors through interest rate policies. The document warns that markets may be fragile given high valuations and falling corporate profits, and that a significant market correction is possible in the coming year.
Este documento explica qué es un hiato y las reglas de acentuación para palabras con hiatos. Un hiato es cuando dos vocales seguidas pertenecen a sílabas diferentes. Las palabras con hiatos siguen las normas generales de acentuación, excepto cuando el hiato está formado por una vocal cerrada tónica como la i o la u. El documento proporciona ejemplos de palabras con diferentes tipos de hiatos.
El documento resume los conceptos básicos sobre la sílaba en español, incluyendo su definición, estructuras silábicas, secuencias vocálicas, acentuación y clases de palabras según la posición de la sílaba tónica.
Este documento explica las reglas básicas de acentuación en español. Define el acento como la sílaba con mayor fuerza de voz dentro de una palabra. Explica que la tilde indica esta sílaba tónica y que las palabras se clasifican como agudas, graves o esdrújulas dependiendo de la posición de la sílaba tónica. También cubre casos especiales de acentuación como el hiato especial, donde la vocal cerrada recibe siempre el acento, y la acentuación diacrítica que diferencia palabras homógrafas.
Este documento resume las reglas de acentuación en español. Explica que las palabras se dividen en agudas, llanas, esdrújulas y sobresdrújulas dependiendo de la sílaba tónica. Luego detalla las reglas para saber si una palabra lleva tilde o no según su categoría y terminación. Por último, indica que los adverbios en -mente conservan la tilde del adjetivo del que derivan.
Palabras agudas, graves, esdrújulas y sobreesdrújulasfjte
Este documento explica los diferentes tipos de palabras en español según dónde recae el acento tónico: agudas (última sílaba), graves (penúltima sílaba), esdrújulas (antepenúltima sílaba) y sobresdrújulas (anterior a la antepenúltima sílaba). También describe las reglas para tildar cada tipo de palabra. Por ejemplo, las palabras agudas se tildan cuando terminan en n, s o vocal, mientras que las graves se tildan cuando no terminan en n o s.
Este documento presenta el texto de cuarto básico de Lenguaje y Comunicación para el Ministerio de Educación de Chile. Consta de ocho unidades que abordan diversos géneros discursivos como cuentos, leyendas, mitos, fábulas y poesía. Cada unidad incluye actividades de lectura, escritura y conversación para desarrollar las habilidades comunicativas de los estudiantes.
El documento clasifica las palabras según su acentuación en tres tipos: palabras agudas, donde la última sílaba es la acentuada; palabras graves, donde la penúltima sílaba es la acentuada; y palabras esdrújulas, donde la antepenúltima sílaba es la acentuada. Proporciona ejemplos de palabras que corresponden a cada categoría.
This document summarizes alternative lending activity in Europe in Q1 2016. It finds that the number of alternative lender deals increased 8% year-over-year to 63 deals in Q1 2016. While fundraising for direct lending funds was down in early 2016, opportunities remain for more flexible lenders to take advantage of market volatility created by Brexit. The document also profiles an example company that benefited from replacing bank debt with a direct lender's flexible unitranche structure to support its growth plans.
The portfolio manager discusses the Third Avenue Focused Credit Fund. They reiterate their commitment to maximizing value in the portfolio and returning capital to shareholders in a timely manner. Eight of the top ten holdings have restructured in the past two years, reducing debt levels. The manager believes the portfolio contains significant embedded value that will be realized as market conditions normalize and corporate events occur. They intend to provide transparency to shareholders through monthly fact sheets and quarterly commentary on the fund's website. The manager also discusses recent volatility in the high yield and distressed debt markets, noting that credit spreads spiked in 2015 but it is unclear if this will lead to recession or opportunity.
The document provides an overview and analysis of capital markets activity in the summer of 2017. Some key points:
- Middle-market loan and debt issuance was robust, helped by strong M&A activity and refinancing. Leverage multiples increased.
- The Federal Reserve raised interest rates again but longer-term bond yields declined, reflecting moderating growth expectations.
- Corporate borrowing and profits remained strong despite political uncertainty. Near-term conditions remained favorable for middle-market issuers seeking financing.
No bubble trouble; stocks are still reasonably priced. This credit cycle has unique characteristics that continue to make high-yield bonds attractive. Interest-rate volatility poses greater risk than higher rates themselves.
Calling the shots_The evolution of European PE funding_Travers SmithRobert Imonikhe
The survey found that alternative debt instruments now account for two-thirds of private equity financing, with traditional bank debt making up just over one-third. Mezzanine financing and unitranche are expected to play a greater role in deals over the next 12 months due to their flexibility and favorable terms. Additionally, over half of respondents expect to see increased leverage in future deals as competition in lending and higher valuations lead sponsors to pursue buy and build strategies with looser debt restrictions.
The document summarizes trends expected in the U.S. financial sector in 2015, including:
- U.S. bank credit may remain strong, supporting profits, but credit quality could become a risk to earnings. Regulators may scrutinize lending standards as credit supply grows.
- U.S. bank revenue may be at risk from a slowing global growth outlook, though higher interest rates could boost revenue.
- Legal costs for large U.S. banks have totaled $140 billion, which could allow more capital returns to shareholders in 2015.
- Global regulations on too-big-to-fail banks may drive higher funding costs through stricter capital requirements.
During the second quarter of 2016, acquisitive middle-market issuers capitalized on lenders’ increased risk appetite by entering into attractively priced and structured financings. The dramatic rally in Treasury yields (and other safe haven assets) triggered by the “Brexit” referendum at quarter’s end, augurs well for further improvement in domestic credit market conditions.
1) The document reviews market conditions in 2009, noting the extreme pessimism and economic deterioration due to the financial crisis. While 2009 saw gradual economic improvement, conditions are still challenging, with high unemployment.
2) Conditions have improved modestly in 2010, including increased corporate spending and consumer confidence, and reopening of credit and equity markets. However, risks remain like potential inflation or regulatory changes.
3) For composting and organics recycling companies, gradually improving conditions may increase access to capital through debt or equity financing. Smaller companies should prepare for fundraising to take advantage of improving opportunities.
The U.S. banking industry is overdue for consolidation as market structure is obsolete and profitability has been weak for a decade. Regulatory pressures and competition are making it hard for most banks to grow revenues and profits. Mid-tier banks with $10-250 billion in assets are expected to see significant consolidation through M&A to gain scale and lower costs. Consolidation can yield 30-35% cost savings by shedding excess capacity, spreading fixed costs over a larger base, and investing in digital capabilities. $600 billion in M&A among mid-tier banks is estimated to boost sector returns enough to reach banks' cost of capital.
Capital Markets Industry Insights - Fall 2016Duff & Phelps
Middle-market issuers were greeted by strong demand this quarter from mainstream credit sources as well as those seeking higher degrees of risk and return. Macroeconomic fundamentals continued to improve, though the focus remained on monetary policy. With an increasingly stark dichotomy of views at the Federal Reserve, volatility persisted in anticipation of clearer guidance on the pace and timing of rate hikes.
Capital Markets Insights – Late Fall 2018Duff & Phelps
What’s been an increase in growth and acquisition-related financings and recapitalization transactions? Read the fall edition of Duff&Phelps’ Capital Markets Insights.
Project Finance - Rate Rise May Herald A Wave Of Refinancing In The Bond Mark...Yong (Xenia) Xie
Rising interest rates could boost refinancing in the infrastructure project bond market. Lower swap breakage costs due to higher rates would make refinancing existing bank loans via new bonds less expensive. Over €40 billion worth of infrastructure loans from 2010-2013 could benefit. Institutional investors are eager for infrastructure assets offering stable yields. If deal flow matches demand, financing conditions may improve further.
Canadian banking and lending 2013: A mid-year pulse checkDeloitte Canada
Early 2013 data indicates that we’ll see a strong Canadian credit market this year. Business lending is on the rise. Canadian banks are increasingly keen to lend, while Canadian companies are looking for additional funds to boost liquidity and seize investment opportunities. It’s a good sign for Canada’s banks — and Canada’s economy overall.
Despite volatility in 2016, the European leveraged debt market showed resilience, with issuance improving after a slow first quarter. However, much of the new issuance was used for refinancing rather than new lending, as muted M&A activity reduced opportunities for deals. Covenant-lite loans became more common in Europe, while payment-in-kind notes and second-lien debt gained popularity as investors sought higher yields. The convergence of European and US leveraged debt markets continued, with US companies increasingly issuing in Europe.
The document discusses recent underperformance in the US credit sector and factors driving spread widening, including fears over a Chinese economic slowdown, high corporate debt issuance, and declining oil prices. It analyzes how the metals and mining sector decline suggests China fears as the dominant factor rather than just oil prices. While the short-term market reaction has been painful, mispricings create opportunities. The document advocates a balanced approach of assessing risks and opportunities rather than reacting to short-term volatility.
After the storm- Global Financial Crisis 27 aug 2010Gaurav Sharma
Global Financial Order - Reasons for Crisis, Current Status, The BIG Shifts- Public Debt, Global De-leverage, Wealth Concetration & Creation.
Talk Delivered at Fore School Of Management, new Delhi
This document summarizes the key drivers and benefits of consolidation in the US banking industry. It notes that the industry remains fragmented compared to other nations and mid-tier banks face profitability challenges due to regulatory pressures and competition from fintech firms. Consolidation can help mid-tier banks gain necessary scale through cost reductions from branch consolidation and spreading of fixed costs. Mergers allow banks to invest in growing areas like digital services. The document predicts a wave of M&A activity among mid-tier banks seeking scale through consolidation.
Capital Markets Industry Insights - Q1 2016Duff & Phelps
Prospective middle-market issuers are being greeted with robust demand from both traditional private credit investors and crossover public market participants. While monetary policy concerns weighed heavily on market participants for much of the first quarter, the Fed’s more dovish posture of recent weeks has triggered an increase in risk appetite across the credit markets.
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STRATEGY
IN THE AGE OF
SUPERABUNDANT
CAPITAL
MONEY IS NO LONGER A SCARCE RESOURCE.
THAT CHANGES EVERYTHING.
BY MICHAEL MANKINS, KAREN HARRIS,
AND DAVID HARDING
66 HARVARD BUSINESS REVIEW MARCH–APRIL 2017
most of the past 50 years, business leaders viewed fi-
nancial capital as their most precious resource. They
worked hard to ensure that every penny went to fund-
ing only the most promising projects. A generation
of executives was taught to apply hurdle rates that
reflected the high capital costs prevalent for most
of the 1980s and 1990s. And companies like General
Electric and Berkshire Hathaway were lauded for the
discipline with which they invested.
Today financial capital is no longer a scarce
resource—it is abundant and cheap. Bain’s Macro
Trends Group estimates that global financial capital
has more than tripled over the past three decades and
now stands at roughly 10 times global GDP. As capital
has grown more plentiful, its price has plummeted.
For many large companies, the after-tax cost of bor-
rowing is close to the rate of inflation, meaning that
real borrowing costs hover near zero. Any reasonably
profitable large enterprise can readily obtain the capi-
tal it needs to buy new equipment, fund new product
development, enter new markets, and even acquire
new businesses. To be sure, leadership teams still need
to manage their money carefully—after all, waste is
waste. But the skillful allocation of financial capital is
no longer a source of sustained competitive advantage.
The assets that are in short supply at most compa-
nies are the skills and capabilities required to translate
good growth ideas into successful new products, ser-
vices, and businesses—and the traditional financially
driven approach to strategic investment has only com-
pounded this paucity. Indeed, the standard method
for prioritizing strategic investments strives to limit
the field of potential projects and encourages compa-
nies to invest in a few “sure bets” that clear high hur-
dle rates. At a time when most companies are desper-
ate for growth, this approach unnecessarily forecloses
too many options. And it encourages executives to
remain committed to investments long after it’s clear
that they’re not paying off. Finally, it leaves companies
with piles of cash for which executives often find no
better use than to buy back stock.
Strategy in the new age of capital superabundance
demands a fundamentally different approach from the
traditional models anchored in long-term planning
and continual improvement. Companies must lower
hurdle rates and relax the other constraints that reflect
a bygone era of scarce capital. They should move away
from making a few big bets over the course of many
years and start making numerous small and varied
investments, knowing that not all will pan out. They
must learn to quickly spot—and get out of—losing
ventures, while ag ...
After the global financial crisis, the global banking industry will undergo significant changes due to new regulations. Growth and profitability for banks will likely decline as equity ratios increase. Lean years are ahead for US banks as revenue growth may remain low due to reduced lending. Private equity experienced booms and busts with the economic cycle, riding high during expansions but seeing deal volumes drop sharply during recessions. The industry is starting to see signs of recovery in 2010 in both developed and emerging markets like India.
3. Even with the prospect of rising
interest rates in the U.S., however,
refinancing risk will remain low
for investment-grade corporates
for three reasons.
First, the increases look set to follow
a gradual path. The Federal Reserve’s
own projections imply rates around
2.5% by the end of 2017 and 3.5%
over the longer term – still far lower
than the peaks seen over the past
few decades.
In Europe a further round of
quantitative easing was ushered in
last year, increasing the volume of
cheap debt available for corporates.
Meanwhile the UK looks set to hold
off a little longer before it begins to
raise its rates.
No matter how you look at it, it will be
a long-time before corporates have to
worry about interest rates approaching
5%, as they were pre-crisis.
U.S. interest rate history and FOMC projections
0
1
2
3
4
5
6
7
201820162014201220102008200620042002
%
FOMC participants
median projection
for Fed Funds
Target Rate
Source: Bloomberg, Federal reserve
Fed Funds
Target Rate
www.allenovery.com
3
5. One post-crisis trend the 2015
M&A-fuelled boom in short-term
finance has reversed is the primacy of
bonds in the investment grade market.
Pre-financial crisis the value of loans
was double the value of bonds. As the
credit crunch of 2007 gave way to a
full financial crisis, markets dislocated
and investment grade corporates
turned to bonds to meet their funding
needs in record numbers.
Over the past three years the volatile
post-crisis relationship between loans
and bonds, looks to have settled with
the value of bond issues and loans to
investment grade borrowers stabilising
to a position of parity.
If, as anticipated, the short-term bridge
loans used to fund the M&A boom are
refinanced in the bond markets during
2016, bonds will most likely take pole
position again. But the difference in
value between loans and bonds will
likely remain small.
Market currents continue to fluctuate
depending on which prevailing events
and conditions have the strongest pull
on the tidal flow of funds. But one
thing is clear – corporates have
options and are willing to use any
and all of them as necessary.
Investment grade financing – global (USDm)
0
500,000
1,000,000
1,500,000
2,000,000
Bonds
Loans
2015201420132012201120102009200820072006
Loans
Bonds
www.allenovery.com
5
7. Technology and healthcare will drive IPO market in 2016
Initial public offerings (IPOs) got off to a strong start in 2015,
but momentum slowed, largely as a result of the volatility in
China during summer 2015 and the ease of raising private
funding in the U.S. – proceeds from IPOs in Asia Pacific
(excluding Japan) halved in 2015 from 2014 levels and
IPOs in the Americas were down 35%. While still well below
2006-2007 levels, Europe was by contrast a relative bright
spot – only down 9% year-on-year. Last year’s total included
the successful completion of a number of deals postponed
from the end of 2014 and a handful of large privatisations of
state-owned assets, such as the IPO of Spain’s airports
operator Aena. Activity also included a high proportion of
private equity exits, continuing a trend from 2014.
This proportion is now declining as the pipeline of good
private-equity assets that are ready for IPO shrinks. With fewer
large private equity and state-owned assets likely to come to
market, 2016 is likely to see a greater focus on mid-cap floats.
There is a significant pipeline of smaller technology companies
yet to come to market, and healthcare may also prove a
popular sector.
Is liquidity a risk for the high-yield market?
One potential concern for the U.S. high-yield bond market is
that issuance has grown at a time when the ability of banks to
act as market makers in corporate bonds has been curtailed.
In the past, banks’ bond trading desks have been willing to
hold substantial inventories of corporate bonds, allowing them
to perform a stabilising role during periods of market turmoil.
But new regulations such as the such as Dodd Frank have
made it more expensive to hold these instruments and bond
inventories have consequently declined sharply in recent years.
If investors were to exit the high-yield market due to rising rates
or increased defaults, the fear is that liquidity could suffer since
banks would be unable to fulfil their traditional role. A report by
Invesco notes that the inventory of U.S. corporate bonds held
by primary dealers has declined from a peak holding of about
10% of the market in July 2007 to just over 1% in 2015.
While this does not appear to be an immediate threat, it is
an illustration of how regulatory changes aimed at reducing
risks could have unpredictable consequences.
www.allenovery.com
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9. 0
50,000
100,000
150,000
200,000
250,000
Bonds
Loans
20202019201820172016
Bonds
Loans
0
100,000
200,000
300,000
400,000
500,000
600,000
Equity
Bonds
Loans
2015201420132012201120102009200820072006
Loans
Bonds
Equity
Asia Pacific (excluding Central Asia and Japan)
Corporate funding by source (USDm)
Corporate funding maturity by source (USDm)
There was a decline across all funding categories in
Asia excluding Japan, reflecting slower economic growth
across the region. The decline was greatest in bonds, where
issuance fell 40%, reversing the 40% increase seen in 2014
during exceptionally strong year for investment-grade
bonds. However, 2015’s total of USD320bn was still the
second-highest on record and bonds accounted for more
than 35% of corporate funding, compared to less than 20%
10 years ago. While equity was relatively flat year-on-year,
this masks the drop-off in IPOs mentioned earlier, which
fell by 48%, while follow-on offerings increased by 24%
to the highest level of USD171bn. More than USD200bn
of outstanding bonds mature in both 2016 and 2017,
the only region where the volume of bonds to be
refinanced exceeds the volume of loans.
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