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☆ On the precipice: How Credit Suisse's day of drama unfolded
▼ + stars: | 2023-03-16 | by ( ) www.reuters.com time to read: +5 min

Fifteen years later, Credit Suisse Group AG found itself on a similar precipice. By the time traders in New York were switching on screens on Wednesday, Credit Suisse had lost more than a fifth of its value. Credit Suisse did not comment for this story but noted recent interviews given by its CEO saying the bank was strong. STILL SMOLDERINGMarkets seemed to calm, but the fresh drama around Credit Suisse jogged memories that the financial system was not out of the woods yet. "We welcome the statement of support," Credit Suisse said.

Rising CDS spreads signal investors are hedging bets on a deterioration in credit quality. In money markets, a closely watched indicator of credit risk in the U.S. banking system edged up on Monday. With investors worried about possible bank runs, the Federal Reserve on Sunday unveiled a new program to ensure banks can meet needs of all their depositors. "Hedge funds are probably the ones that are buyers in this case," said Dan Bruzzo, a strategist at Santander US Capital Markets. Other banks with California exposure were taking the brunt of the selloff in the debt capital markets, he added.

☆ VIEW US intervenes to shore up SVB deposits, stem financial fallout
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +10 min

March 13 (Reuters) - The U.S. government announced actions to shore up deposits and stem any broader financial fallout from the sudden collapse of tech startup-focused lender Silicon Valley Bank (SIVB.O) (SVB), sending U.S. stock futures higher. "The market turbulence sparked by SVB has upended rising market expectations on the Fed rate path. The fact that SVB and Signature Bank depositors will be made whole is critical in maintaining trust in the financial system and should help stem contagion fears this week. But it also means that 50 basis points (a possible Fed interest rate hike) is off the table." Given what's happened in the U.S. financial system, a 25 basis point hike is more likely than a 50 basis point hike."

☆ Instant view: US intervenes to shore up SVB deposits, limit financial fallout
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +11 min

March 13 (Reuters) - The U.S. government announced actions to shore up deposits and stem any broader financial fallout from the sudden collapse of tech startup-focused lender Silicon Valley Bank (SIVB.O) (SVB), sending U.S. stock futures higher. ALVIN TAN, HEAD OF ASIA FX STRATEGY, RBC CAPITAL MARKETS, SINGAPORE:"Markets remain unsettled from the SVB failure. "The market turbulence sparked by SVB has upended rising market expectations on the Fed rate path. ANTHONY SAGLIMBENE, CHIEF MARKET STRATEGIST, AMERIPRISE FINANCIAL, TROY, MICHIGAN:"It was imperative that regulators stepped in and decisively acted before markets around the world opened for the week. GREG MCBRIDE, CHIEF FINANCIAL ANALYST, BANKRATE:"While the Fed has talked about a lot in the past year, until today it has been in the context of monetary policy.

NEW YORK, March 13 (Reuters) - Credit risk indicators flashed red on Monday, as investors worried about contagion risks across corporate debt markets after the collapse of Silicon Valley Bank (SVB) and New York's Signature Bank in the space of 72 hours. Investment grade credit spreads, which indicate the premium investors demand to hold corporate bonds over safer government debt securities, have also been widening. The BlackRock Investment Institute said that after recently trimming its 'overweight' recommendation for investment grade credit, it was reassessing its view due to tighter financial conditions. In money markets, a closely watched indicator of credit risk in the U.S. banking system edged up on Monday. Other banks with California exposure were taking the brunt of the sell-off in the debt capital markets, he added.

☆ In the midst of the AI boom, investors are doubling down on diligence. Here are the five questions VCs are asking every generative AI startup during pitches.
▼ + stars: | 2023-03-02 | by ( Stephanie Palazzolo | ) www.businessinsider.com time to read: +7 min

Buzzy generative AI startups have so far avoided the troubles plaguing the rest of the tech world. Here are the five diligence questions investors are asking generative AI startups, according to VCs. But for generative AI startups, 2023 has been much of the same — and that hasn't been a bad thing. Insider spoke with eight of these VCs about the top five questions they're asking generative AI startups during diligence processes. One hallmark of generative AI startups are their eye-staggering round sizes.

☆ US companies rush to issue corporate debt, busiest February ever
▼ + stars: | 2023-02-28 | by ( Matt Tracy | ) www.reuters.com time to read: +2 min

Companies have been rushing to issue bonds as yields spiked to touch new highs with the Federal Reserve looking to keep interest rates higher for longer. The average yield on U.S. investment grade bonds rose to 5.55% on Monday from just 4.94% on Feb. 1. "There's much more yield now to be had in corporates," said David del Vecchio, co-head of the U.S. investment grade corporate bond team at PGIM Fixed Income. Investors still had plenty of cash, despite the flurry of issuance, said Blair Shwedo, head of IG corporate bond trading at U.S. Bank. "With more volatility, you may see some short term negative returns but overall, we’re well positioned to have a very nice positive total return in investment grade credit in 2023," said Natalie Trevithick, head of investment grade credit strategy at investment management firm Payden & Rygel.

☆ Analysis: Some highly rated US companies take unusual funding route as rates rise
▼ + stars: | 2023-02-27 | by ( Shankar Ramakrishnan | ) www.reuters.com time to read: +4 min

Credit-worthy companies have found in the past that they can raise funds more cheaply in investment-grade bond markets. They were able to issue the securities at much lower interest rates than what they would have had to pay on a bond. In interviews, two bankers and an investor said that uncertainty has made convertible bonds an attractive option to raise money for some investment-grade companies. Earlier this week, for example, investors bought PPL’s convertible bond at 100 cents on the dollar, or at par. Because defensive stocks such as utilities like PPl could benefit if interest rates keep rising, potential returns for investors in convertible bonds could be boosted.

☆ Analysis: To raise prices or not? Consumer goods makers weigh bets on buyer strength
▼ + stars: | 2023-02-20 | by ( Jessica Dinapoli | Thomson Reuters | New York-Based Reporter Covering U.S. Consumer Products Spanning Paper Towels To Packaged Food | ) www.reuters.com time to read: +6 min

But, there are small signs the pressure is easing, with U.S. consumer prices a month earlier declining for the first time in two-and-a-half years, due in part to gas prices. Price hikes - or halts - are set to take center stage at the Consumer Analyst Group of New York annual conference on Feb. 20 in Boca Raton, Florida. DIFFERENT PREDICTIONSAfter more than a year of consistent price hikes, some consumer goods makers such as Kraft Mac & Cheese manufacturer Kraft Heinz Co (KHC.O) are pressing pause as they weigh consumer demand for their items. Frozen pizza prices have risen about 14% in the last year, according to IRI data. "Retailers cannot truly push back on prices … if the company has an important brand," Bernstein analyst Bruno Monteyne said.

☆ Analysis: Bed Bath's novel deal is no universal dodge-bankruptcy card
▼ + stars: | 2023-02-17 | by ( Shankar Ramakrishnan | ) www.reuters.com time to read: +5 min

It's unclear whether Bed Bath can capitalize on the breathing room to turn around its business, which has been battered by competition from other online and brick-and-mortar retailers. A spokesperson for Hudson's Bay declined to comment, while Bed Bath & Beyond did not respond to requests for comment. To secure the Hudson's Bay investment, Bed Bath offered a deal that guarantees the hedge fund a lucrative return in most circumstances. It is not clear how much of the stock Hudson's Bay has converted and sold since it inked the deal with Bed Bath on Feb. 6. The deal is very dilutive for other Bed Bath investors, who will end up owning 80% less if the company survives.

One U.S. holder of Adani bonds looked to buy more this week but said his trade orders were not being executed because of lack of available paper. Another U.S. based emerging markets focused money manager who held Adani bonds said he was sitting tight on his position. Indian companies have not been prolific issuers of U.S. dollar bonds and Adani's bonds with secured assets were seen as providing direct, quality exposure to the fast-growing economy. Another source, a U.S. based hedge fund manager, said he was looking to short Adani's dollar bonds after the Hindenburg report but was finding it difficult to borrow bonds to sell. Bid-offer spreads, a measure of liquidity, widened significantly after the Hindenburg report, Tradeweb data showed.

☆ Apollo launches new credit firm with bulk of Credit Suisse' assets
▼ + stars: | 2023-02-09 | by ( ) www.reuters.com time to read: +1 min

Feb 8 (Reuters) - Apollo Global Management Inc (APO.N) said on Wednesday it is creating a new credit unit that now oversees majority of assets it purchased from Credit Suisse Group (CSGN.S) as a part of the sale of Securitized Products Group (SPG). Apollo bought most of the SPG assets held by Credit Suisse in November last year as a part of a sweeping revamp for the Swiss bank, without disclosing the sale price at that time. The newly created unit, Atlas SP Partners, will focus on asset-backed financing and capital markets solutions under the leadership Credit Suisse's Jay Kim, with Apollo owning the majority of the unit. "At Apollo, we are excited to partner with ATLAS SP and accelerate our strategy to invest in more long-term, investment grade quality assets for our clients and strategic partners," Apollo's co-President Jim Zelter said in a statement. Reporting by Lavanya Ahire and Shankar Ramakrishnan; Editing by Lincoln Feast.

Bed Bath said it was planning to raise just over $1 billion through sales of preferred stock and warrants and from securities when the warrants are exercised. Bed Bath will receive a waiver on its recent bank default should the proposed offering succeed, the company said. Bed Bath & Beyond also appointed Holly Etlin, a bankruptcy expert, as interim chief financial officer. "It’s a similar situation in which a deeply financially distressed company is attempting to sell securities," said Lynn LoPucki, a professor at the University of Florida. Sources have told Reuters that Bed Bath & Beyond has lined up liquidators to close additional stores unless a last-minute buyer emerges.

☆ 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.

Adani Ports and Special Economic Zone Limited paid coupons, the two sources, speaking on condition of anonymity, said. The source with knowledge of the firm's strategy said Adani Transmission also processed bond payments on Thursday. Adani Group plans to issue a credit report by Friday which will address concerns raised by the Hindenburg report about its liquidity, the same source said. Brokerage CLSA estimated in a Jan, 26 report that consolidated debt of the top five Adani Group companies -- Adani Enterprises, Adani Ports, Adani Power, Adani Green and Adani Transmission, with some element of double counting – stood at 2.1 trillion Indian rupees ($25.60 billion). The U.S. dollar-denominated bonds of Adani Ports and Special Economic Zone (APSE.NS), Adani Transmission (ADAI.NS) and Adani Electricity Mumbai were also trading lower.

[1/2] Indian billionaire Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port earlier in January 2023, in Haifa port, Israel January 31, 2023. On Wednesday, a $2.5 billion sale of shares by one of its companies Adani Enterprises ADEL.NS was called off. Adani Group and the stock market regulator the Securities and Exchange Board of India (SEBI) did not respond to a request for comment. Cracking the code of how Hindenburg did the trade could lead to more short sellers taking positions against Indian companies, which have been rare, analysts said. But several bankers familiar with trading in Indian securities said the more profitable piece of the short seller’s bet would likely lie in the derivative trades it had placed.

☆ Back-to-back California shootings reflect an American tragedy, not an ‘Asian issue,’ experts say
▼ + stars: | 2023-01-25 | by ( Kimmy Yam | Https | Media-Cldnry.S-Nbcnews.Com Image Upload Newscms Mirna-Alsharif-Byline-Jm.Jpg | ) www.nbcnews.com time to read: +8 min

Gun violence isn’t innate in Asian culturesGun violence, experts note, is not inherent in the Asian diaspora's culture. So Ho condemned those attempting to paint the Asian American community with a broad brush due to the pair of tragedies. Gun control organizations haven’t invested enough time and resources in the Asian American community, Ramakrishnan said. And campaigns and parties have often targeted Asian American voters with a focus on education and affirmative action, he said. And Dhingra said he fears that, as more attacks occur in Asian American spaces, it could lead to more Asian Americans purchasing weapons for self-defense, leading to more firearms to be used and misused.

"Credit spreads have rallied across the board since the beginning of the year despite heavy (new bond) issuance and are at multi-month tights. This puts the credit market at odds with economic forecasts and the rates market," Barclays strategists said in a recent note. They said U.S. investment grade bonds rated BBB implied a 30% chance of recession, and CCC rated bonds implied a 35% chance. In the most bullish scenario, investment-grade bond spreads could tighten another 20 to 30 basis points, but they could widen much more if the economic downturn is deeper than anticipated, he added. Reporting by Davide Barbuscia and Matt Tracy; Editing by Shankar Ramakrishnan and Andrea RicciOur Standards: The Thomson Reuters Trust Principles.

☆ Tough road ahead for U.S. fintech lenders as default risk rises
▼ + stars: | 2023-01-13 | by ( Matt Tracy | ) www.reuters.com time to read: +2 min

During the pandemic, many fintech startups emerged as lenders to borrowers with imperfect credit. Using artificial intelligence, their screening tools were more likely to recommend these loan requests than traditional lenders'. The lenders' ABS were among bonds that raised $36 billion in 2021 and 2022 by pooling consumer and marketplace loans, according to FinSight data. The losses on subprime loans that are assumed to be uncollectible debt or charge-offs rose on average by some 20% by the third quarter of 2022 from 2019 levels, said Moody's. But the lenders' securities have not lost investor appeal as yet, said Theresa O’Neill, ABS strategist at BofA Securities.

Spreads indicate the premium investors demand to hold corporate bonds rather than safer government debt. However, some investors expect credit spreads may widen again to reflect a recession potentially ahead. Hedge funds and some asset managers short credit, meaning they are betting on a fall in a bond's price, by buying products like credit default swaps (CDS), which rise in value if the risk of a credit default event increases. Primary markets indicate there is no lack of demand for corporate bonds. They expect credit spreads to widen in the first half of this year.

☆ Corporate Tech Leaders Untangle Their Cybersecurity Roles
▼ + stars: | 2022-12-22 | by ( Belle Lin | ) www.wsj.com time to read: +6 min

Information technology and cybersecurity chiefs grew closer than ever in 2022, a dynamic allowing for more comprehensive threat mitigation, but raising new questions over responsibilities. About 50% of the company’s threat planning simulations, in which IT plays an active role, involve ransomware scenarios, according to Ms. Smart. Ms. Allison is retiring at the end of the year, the company said, and will be succeeded by Gary Harbison. Photo: Adobe Inc.Prasad Ramakrishnan, the CIO and former CISO of software maker Freshworks Inc., said IT and security have shared roles in evaluating the cybersecurity resiliency of corporate software purchases. And in securing a hybrid work environment, his joint cybersecurity and IT roles included adding a new cybersecurity layer on top of cloud-based software on company laptops.

Dec 20 (Reuters) - Private U.S. oil and gas companies are increasingly turning to a niche financing structure that securitizes their production, providing a funding avenue for producers and owners as traditional sources become more expensive or simply dry up. With banks pressured by stakeholders to restrict loans to the oil and gas sector over its environmental impact, private energy producers - more reliant on bank lines than listed peers - are able to maintain access to outside finance through this niche product. While the first rated PDP securitization was completed in September 2019 by Raisa Energy, volatile commodity prices and a wave of producer bankruptcies in 2020 stymied its initial application. The investment bank helped arrange, among others, a $750 million ABS sold by Jonah Energy in October - currently the largest PDP securitization completed. GROWING APPEALAs well as financing day-to-day operations, private equity firms that own energy producers are exploring using PDP securitizations as an investor pay-day.

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.

☆ Asian Americans heavily favored Warnock in Georgia runoff, exit poll shows
▼ + stars: | 2022-12-08 | by ( Kimmy Yam | Kimmy Yam Is A Reporter For Nbc Asian America. | ) www.nbcnews.com time to read: +5 min

Asian American voters in Georgia showed strong Democratic lean in the recent Senate runoff election, according to one exit poll. “I think there is a risk of losing folks if they take voters for granted.”For the exit poll, the organization surveyed 337 Asian American voters across DeKalb, Fulton and Gwinnett counties at five key, high-Asian American precincts. Nguyen emphasized that political opinions across the electorate are far from monolithic, pointing to the poll’s breakdown of Asian American voters by age. Polling occurred in areas with a higher-density Asian American voters, which tend to skew Democrat. Nguyen similarly noted that in the Atlanta area, voters heavily favored Warnock.

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