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International Bar Association Conference Buenos Aires, Argentina Oct. 12 -17, 2008 Credit Markets & Distressed Acquisition Opportunities in the U.S.
[object Object],A Perfect Storm: Opportunities for Foreign Buyers of Distressed U.S. Assets ©2008 Baker & McKenzie
Why Increased Opportunities For Acquiring Distressed U.S.  ,[object Object],[object Object],[object Object],[object Object],[object Object],©2008 Baker & McKenzie
Economic Conditions-Contributing Key Factors ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],©2008 Baker & McKenzie
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],©2008 Baker & McKenzie
©2008 Baker & McKenzie  PENDULUM HAS BEGUN TO SWING…..EXPECTED RISE IN CORPORATE DEFAULTS – WILL CREATE BUYING OPPORTUNITIES 8/7/08 estimate of 6.3% by mid ’09;  up to 10% in protracted recession GLOBAL CORPORATE DEFAULT RATE Default Rates S&P MOODY’S 1990-1991 Recession  IMF Projections Apr. ‘08 1932 U.S. Non-financial speculative grade 3 YR  23.2% by 2010, the worst on  record since 1981.   U.S. Speculative (Junk) Grade <3% in 2007 7.9% by 12/09 9.43% 1990   5.4% in’00 WORSE CASE 12.3% WITH A BASELINE OF 10.4% U.S. Investment Grade 0% in 2007 4.2% in 9/08 !! Highest since ´94 U.S. All corporate issuer 4.1% July of 1991 9.2% in July of 1932
If Recession, How Long Is The Road to Recovery ? ©2008 Baker & McKenzie  IMF View (4/9/08)  FED View (4/12/08) Longer Road: 2008: .5% Growth 2009: .6% Growth ,[object Object],[object Object],Recession Drivers Official End Job Growth Real Length Aug. ‘90  S&L Crisis (1) Mar. ’91 ( 8 mo’s ) Nov. ‘92 2 yrs. 3 mo’s Dec. 00 Dot Com Bubble Aug. ’01 ( 8 mo.’s ) Jul. ’03 2 yrs. 6 mo’s Dec. ’07 Subprime Crisis (2)   Aug. 2010 ? (1)  Res. & commercial real estate downturn + tight credit = increased corporate default rate (2) Subprime lending, housing bubble, consumer credit crisis spreading to commercial credit crisis, leveraged loan market freeze, and tighter credit = increasing corporate default rate 10/08 2008-2009: .0% Growth US
Process:  Favorable Changes from Increased Liquidity At Every Level of the Capital Structure ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],©2008 Baker & McKenzie

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Credit Markets & Distressed Acquisition Opportunities Buenos Aires

  • 1. International Bar Association Conference Buenos Aires, Argentina Oct. 12 -17, 2008 Credit Markets & Distressed Acquisition Opportunities in the U.S.
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  • 6. ©2008 Baker & McKenzie PENDULUM HAS BEGUN TO SWING…..EXPECTED RISE IN CORPORATE DEFAULTS – WILL CREATE BUYING OPPORTUNITIES 8/7/08 estimate of 6.3% by mid ’09; up to 10% in protracted recession GLOBAL CORPORATE DEFAULT RATE Default Rates S&P MOODY’S 1990-1991 Recession IMF Projections Apr. ‘08 1932 U.S. Non-financial speculative grade 3 YR 23.2% by 2010, the worst on record since 1981. U.S. Speculative (Junk) Grade <3% in 2007 7.9% by 12/09 9.43% 1990 5.4% in’00 WORSE CASE 12.3% WITH A BASELINE OF 10.4% U.S. Investment Grade 0% in 2007 4.2% in 9/08 !! Highest since ´94 U.S. All corporate issuer 4.1% July of 1991 9.2% in July of 1932
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