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☆ Activist Elliott makes inroads at Catalent to build value. Here’s what could happen next
▼ + stars: | 2023-09-16 | by ( Kenneth Squire | ) www.cnbc.com time to read: +7 min

This segment also handles the formulation, development and manufacturing for parenteral dose forms, including vials and prefilled syringes. Activist Commentary: Elliott is a very successful and astute activist investor, particularly in the technology sector. While as an activist Elliott will do whatever it feels is necessary to enhance shareholder value, in the past the firm has made significant use of the strategy of offering to acquire its portfolio companies as the best catalyst to enhance shareholder value. Like Catalent, Syneos is an outsourced pharma solutions company: It outsources R&D for pharmaceutical companies, whereas Catalent outsources manufacturing. If this does turn from a strategic review to an operational review, there is no guarantee that he keeps his job.

Persons: Catalent, there's, Elliott, Steven Barg, Frank D'Amelio, Stephanie Okey, Michelle Ryan, Johnson, Barg, Ryan, John Greisch, There's, Danaher, Alessandro Maselli, Ken Squire Organizations: Oral Technologies, Clinical, Pfizer, Rom Holdings, Bloomberg, Merck, Citrix Systems, Nielsen Holdings, Square, Veritas Capital, Syneos Health, 13D Locations: COOs, North America

☆ Guest view: Direct lending may be entering new era
▼ + stars: | 2023-04-13 | by ( Armen Panossian | ) www.reuters.com time to read: +5 min

NEW YORK, April 13 (Reuters Breakingviews) - Challenges in the banking system are expanding the opportunities available to direct lenders. I believe direct lenders’ market share will increase significantly in the future due to the substantial mismatch of supply and demand that has emerged in the market for funding large-scale LBOs. Direct lenders, including funds at Oaktree, are now seeking to fill this gap. Not all direct lenders will be able to take advantage of this opportunity, though. This, in turn, is attracting interest and capital from those direct lenders able to fill the massive gap.

China has routinely denied hacking into businesses or governments in other countries. State-sponsored hackers from China have developed techniques that evade common cybersecurity tools and enable them to burrow into government and business networks and spy on victims for years without detection, researchers with Alphabet Inc.’s Google found. Over the past year, analysts at Google’s Mandiant division have discovered hacks of systems that aren’t typically the targets of cyber espionage. Instead of infiltrating systems behind the corporate firewall, they are compromising devices on the edge of the network—sometimes firewalls themselves—and targeting software built by companies such as VMware Inc. or Citrix Systems Inc. These products run on computers that don’t typically include antivirus or endpoint detection software.

☆ Renewed U.S. junk bond rally ignites hope for more stuck buyout debt
▼ + stars: | 2023-02-03 | by ( Matt Tracy | ) www.reuters.com time to read: +3 min

This exercise now has more impetus on expectations that junk bond prices will continue to rally in the wake of Powell's comments, which raised hopes of slowing rate hikes and a so-called economic soft landing. Junk bond spreads on average tightened 37 basis points on Wednesday, the day of Powell's remarks, from a day earlier, according to ICE BAML data. This is around the level in September when banks sold only about half of the total $15 billion of debt through a U.S. dollar bond, leveraged loan and a Euro-denominated loan. Reuters could not confirm the exact amount sold in these sales and balance of LBO debt still left with banks. Banks could consider selling larger parcels of LBO debt in the primary bond markets where there has been a surge in new issue supply, said the sources.

A trading book includes loans banks have earmarked for sale and are thus marked-to-market, while a banking book is where a lender holds loans and other assets not intended for disposal. This implies a heavy discount of 15 pence on the pound if banks sell the loans at that level. Banks make money also by charging the borrower a fee to provide loans, then sell the loans to third party investors. Reuters could not ascertain the exact size of the hit on the loans sold. On the flipside, loans sold by banks can generate attractive gains for buyers.

☆ M&A Is Expected to Pick Up in 2023 as Companies Adapt to Tougher Conditions
▼ + stars: | 2023-01-06 | by ( Kristin Broughton | ) www.wsj.com time to read: +8 min

But many companies adapted, structuring deals to sidestep market volatility and minimize financing costs. Deal advisers expect M&A to pick up in 2023 following last year’s slump, though when that will happen remains an open question. That is especially true in the technology and healthcare sectors, where deals for high-growth companies are most common, she said. In addition to macroeconomic pressures, companies faced a tougher regulatory environment in 2022, with antitrust enforcers globally applying greater scrutiny to large transactions. Demand for such facilities in the U.S. jumped 17% in 2022 through Dec. 29 compared with the full-year 2021, to $317.3 billion, according to Dealogic.

☆ Fed Rate Increases Upended Funding Markets in 2022. Here’s What CFOs Can Expect in 2023.
▼ + stars: | 2022-12-14 | by ( Nina Trentmann | ) www.wsj.com time to read: +9 min

Here’s a look at how different financing instruments fared in 2022 and what’s ahead for 2023. Activity in the convertible debt market has picked up in recent weeks. Still, there could be financing opportunities for deals in 2023 in the form of syndicated loans, bankers said. “CFOs have to be aware of that and focus on cash conversion and margins,” he said, pointing to the increase in financing costs. “We expect deals will continue to get done,” he said, adding that those could however come with more oversight from lenders.

Banks still have to mark the loan to its market value on their books and set aside funds for losses that are reported in quarterly results. The deliberations of how some of these banks are thinking about accounting for these losses have not been previously reported. Three banking industry sources said the remaining $3 billion, which is unsecured, could lead to steeper losses for the seven Twitter banks. Some market participants expect the losses from the debt to be significant unless market conditions improve. Some $35 billion to $40 billion of such loans are stuck on banks' books, according to two fixed income bankers.

☆ JPMorgan Dodges a Buyout-Loan Bullet
▼ + stars: | 2022-11-13 | by ( Matt Wirz | ) www.wsj.com time to read: 1 min

JPMorgan Chase & Co. CEO Jamie Dimon is pleased about the bank’s level of exposure to bad buyout loans. Sometimes in investment banking, it is the deals you don’t do. JPMorgan Chase & Co. has avoided most of 2022’s so-called hung deals that have cost competitors billions of dollars in paper losses. Whether by luck or by design, the biggest U.S. bank didn’t make loans backing takeovers of companies such as Twitter Inc., Citrix Systems Inc. and Nielsen Holdings PLC, which fell in value as markets turned choppy.

☆ Banks plan to sell Tenneco buyout debt next week -sources
▼ + stars: | 2022-10-28 | by ( Matt Tracy | Shankar Ramakrishnan | ) www.reuters.com time to read: +2 min

Banks led by Citigroup Inc (C.N) and Bank of America Corp (BAC.N) aim to begin marketing a portion of the Tenneco debt package's secured portion as early as next week, said one of the sources. The package consists of a $2.4 billion leveraged loan, a $2 billion secured bond, and a $1 billion unsecured bond. This activity is rekindling hope among banks that they may not have to suffer big loses to shed junk-rated debt from their balance sheet. If the Tenneco syndication goes well, banks are sitting on plenty of junk-rated debt they may seek to offload. This includes $11 billion in debt backing the takeover of media analytics company Nielsen and $13 billion of debt for Elon Musk’s acquisition of Twitter.

Weber , which went public in August 2021 and is trading at half its offering price, is the latest example of a recent IPO to attract a bid to go private. Recent IPOs ducking for the door First, to understand why we selected these criteria, let's look at the recent deals. Kennedy Lewis' $4 per share cash offer was an 83% premium to F45's closing price ahead of the deal announcement, even though it was far below the stock's $16 IPO price. Even with the lift from the deal news, shares are only trading at less than half its $14 IPO price. Private equity company AEA Investors had a 28.4% stake in the company, and CEO Jeremy Andrus owns an 11% stake, according to FactSet.

Elon Musk photo, Twitter logos and U.S. dollar banknotes are seen in this illustration, August 10, 2022. The banks, which include Morgan Stanley and Barclays Plc (BARC.L), did not respond to requests for comment. Representatives for Musk and Twitter did not immediately respond to requests for comment. He has not revealed details on Twitter's new leadership and business plan, and many debt investors are holding back until they get more details on that front, the sources said. The debt package for the Twitter deal is comprised of junk-rated loans, which are risky because of the amount of debt the company is taking on, as well as secured and unsecured bonds.

Oct 17 (Reuters) - Bank of America Corp (BAC.N) on Monday reported a smaller-than-expected 9% drop in quarterly profit, as its interest income was bolstered by rising interest rates that offset a slump in investment banking. BofA holds a large base of consumer deposits, compared with its main rivals, making it more sensitive to any changes in interest rates. "Consumers remain resilient," Bank of America Chief Executive Officer Brian Moynihan told analysts on a conference call. The bank, however, added $378 million to its loan-loss reserves as it braces for a weakening economy. Citigroup Inc (C.N) wrote down $110 million on leveraged loans in the third quarter, down from $126 million in the previous quarter.

Bank of America holds a large base of consumer deposits, compared with its main rivals, making it more sensitive to any changes in interest rates. Its net interest income jumped 24% in the third quarter. JPMorgan Chase & Co (JPM.N) Citigroup Inc (C.N), and Wells Fargo & Co (WFC.N) also saw their net interest income rise in the same period. read moreThe bank's leveraged loan losses were lower in the third quarter than in the second, Borthwick said. Peer Citi also wrote down $110 million on leveraged loans in the third quarter, down from $126 million in the previous quarter.

NEW YORK (Reuters) -Citigroup took a $110 million writedown on leveraged loans in the third quarter, the company said on Friday as its Wall Street competitors downplayed their exposure to the sector. Banks have since pulled back from leveraged financing in the wake of losses taken on Citrix and other deals, as investors lost their appetite for riskier, floating-rate leveraged loans amid rapid interest rate hikes and fears of recession. “There are no real levels of loan write-down this quarter, and that market isn’t yet to clear,” Jamie Dimon, JPMorgan’s chief executive officer, told analysts on a conference call. So we’re very comfortable.”Morgan Stanley also scaled back its leveraged exposure in the third quarter. “They actually were quite modest marks, given the environment,” Sharon Yeshaya, Morgan Stanley’s chief financial officer, told analysts.

☆ Cybersecurity firm KnowBe4 to go private in $4.6 bln deal with Vista Equity Partners
▼ + stars: | 2022-10-12 | by ( ) www.reuters.com time to read: +2 min

Oct 12 (Reuters) - KnowBe4 Inc (KNBE.O) on Wednesday agreed to go private in a sweetened $4.6 billion deal with Vista Equity Partners, the latest cybersecurity firm to be snapped up by private equity in this year's market downturn. Private equity firms have been scooping up technology companies whose shares have taken a beating this year from worries over rising interest rates and an economic slowdown. The KnowBe4 deal, expected to close in the first half of 2023, will be financed through a mix of debt and equity financing. Morgan Stanley & Co LLC was serving as financial advisor to KnowBe4's special committee and Guggenheim Securities LLC was financial advisor for Vista. Register now for FREE unlimited access to Reuters.com RegisterReporting by Savyata Mishra in Bengaluru; Editing by Devika SyamnathOur Standards: The Thomson Reuters Trust Principles.

Typically, banks would sell the debt to investors and pocket an underwriting fee. Elon Musk vs TwitterThe debate, currently a topic of conversation among investment bankers and debt investors, provides a window into the havoc wreaked on Wall Street by Musk’s U-turn last week. Musk, however, conditioned his proposal on his ability to secure debt financing and now has until Oct. 28 to close on the transaction. VARIOUS OPTIONSThe debt financing package is comprised of leveraged loans, which are risky because of the amount of debt the company is taking on, as well as secured and unsecured bonds. In September, banks financing the Citrix buyout undertook a similar restructuring.

☆ More Companies Pause Deal-Making Amid Market Volatility, High Inflation
▼ + stars: | 2022-10-10 | by ( Kristin Broughton | ) www.wsj.com time to read: +7 min

Many companies are taking a pause on acquisitions as a cocktail of worrying economic factors, including high inflation, rising interest rates and market volatility, is sapping the confidence of buyers and sellers. Deal-making activity is expected to remain tepid overall during the fourth quarter compared with 2021, barring an improved economic outlook and lower inflation readings, M&A advisers said. For instance, spinoffs or divestitures could become more popular deal structures as companies review their business models, Refinitiv’s Mr. Toole said. Even a number of early M&A discussions, including about possible financing options, are drying up, M&A advisers said. During the latest quarter, Adobe acquired 5.1 million shares at a cost of $1.8 billion, it said.

☆ BlackBerry takes a knock as cybersecurity revenue drop clouds automotive demand
▼ + stars: | 2022-09-27 | by ( ) www.reuters.com time to read: +2 min

A sign is displayed on the building Blackberry's offices in Waterloo, Ontario, Canada, May 29, 2018. The company said in an earnings call that cybersecurity segment revenue in the third quarter is expected to be flat year-on-year. BlackBerry's QNX software is now embedded in over 215 million vehicles worldwide, helped by surging demand for electric vehicles and connected-car technologies. read moreTotal revenue fell 4% to $168 million for the quarter ended Aug. 31, compared with a consensus estimate of $166.7 million, according to IBES data from Refinitiv. Excluding items, the company posted a loss of 5 cents per share, narrower than analysts' expectations of loss of 7 cents.

☆ Banks Could Get Nudged Out of Leveraged Lending
▼ + stars: | 2022-09-26 | by ( Telis Demos | ) www.wsj.com time to read: 1 min

Many banks, such as Bank of America, have made markdowns to their deal-financing books in the second quarter. Wall Street banks finally moved a big slug of buyout debt recently, but investors shouldn’t get hung up on it. What they should be worried about is banks not doing enough deals. Investment banks across Wall Street including Bank of America Credit Suisse and Goldman Sachs are on track to share losses of more than half a billion dollars in the financing for a leveraged-buyout of Citrix Systems The Wall Street Journal has reported. Pinpointing how that will hit any individual bank is hard, but the experience could affect future deals.

☆ Stocks making the biggest moves midday: Wynn Resorts, Planet Fitness, AMC, Lyft and more
▼ + stars: | 2022-09-26 | by ( Alex Harring | ) www.cnbc.com time to read: +3 min

An exterior view shows Encore Las Vegas (L) and Wynn Las Vegas as the coronavirus continues to spread across the United States on March 15, 2020 in Las Vegas, Nevada. Las Vegas Sands, Wynn Resorts — Shares of the casino operators both soared about 11% after Macao announced its plan to allow Chinese tour groups back in the casinos as soon as November. Chegg — Shares of the educational tech company jumped more than 6% after Needham upgraded the company to a buy rating from hold. Planet Fitness - The gym stock jumped 2% after Raymond James upgraded Planet Fitness to strong buy from market perform. Lyft – Shares of the ride hailing company fell about 3% after UBS downgraded the stock to neutral from a buy.

☆ Stocks making the biggest moves premarket: Planet Fitness, PG&E, Las Vegas Sands and more
▼ + stars: | 2022-09-26 | by ( Yun Li | ) www.cnbc.com time to read: +1 min

Check out the companies making headlines before the bell:Planet Fitness — Shares of the gym franchise jumped nearly 3% in premarket trading after Raymond James upgraded the stock to strong buy from market perform. The Wall Street firm said the company has a resilient and recession-resistant business with no interest rate risk and very little near-term debtmaturities. PG&E — The utility stock climbed more than 5% premarket after S&P Dow Jones Indices on Friday said PG&E will replace Citrix Systems in the S&P 500, effective prior to the opening of trading on Monday, October 3. Lyft — Shares of the ride-hailing company fell nearly 4% premarket after UBS downgraded the stock to neutral from buy. The Wall Street firm cited its driver survey that indicates drivers prefer Uber and Lyft is not their main app.

☆ Wall Street’s banking-as-a-service has a problem
▼ + stars: | 2022-09-23 | by ( Jonathan Guilford | ) www.reuters.com time to read: +3 min

A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S. December 28, 2016. The nature of the buyout business means there are asset flips, equity offerings, follow-ons, and recapitalizations that all generate recurring fees. Private equity clients are ideal for investment banks that otherwise have to schmooze large companies like Microsoft (MSFT.O) for years before receiving a one-off deal. Follow @JMAGuilford on TwitterCONTEXT NEWSPrivate equity firms accounted for 26% of M&A deals in the first six months of 2022, according to Refinitiv, a record-high share. During that time, investment banks earned $6.5 billion in fees worldwide from providing services to financial sponsors, Refinitiv data show.

☆ Citrix Debt Deal Prices With Large Losses For Banks
▼ + stars: | 2022-09-21 | by ( Alexander Saeedy | Laura Cooper | ) www.wsj.com time to read: 1 min

Investment banks including Bank of America Credit Suisse Group and Goldman Sachs Group are on track to collectively lose more than $500 million on debt backing the largest U.S. leveraged buyout of the year after it was sold to investors at a steep discount. The $4 billion in bonds backing the $16.5 billion take-private deal for Citrix Systems were auctioned off Tuesday at a 16% discount, netting around $500 million in losses alone for underwriting banks, according to people familiar with the matter and pricing term sheets viewed by The Wall Street Journal.

☆ Banks close painful Citrix debt chapter with $700 mln loss -source
▼ + stars: | 2022-09-21 | by ( Abigail Summerville | Matt Tracy | ) www.reuters.com time to read: +3 min

Citrix Systems logo is seen on smartphone placed on U.S. While the syndication was completed successfully, it was done at a steep discount to the levels that the banks underwrote the debt. It was also buoyed by one of Citrix's acquirers, hedge fund Elliott Management, helping out by buying $1 billion in bonds, a second source said. They also sold a $4 billion three-year Citrix bond for 83.6 cents on the dollar, resulting in a higher than expected yield of 10%, the sources added. More debt syndication pain for the banks is on the way.

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