Arab Today, arab today risk of leveraged loan defaults rises
Last Updated : GMT 00:38:13
Arab Today, arab today
Arab Today, arab today

Risk of leveraged loan defaults rises

Arab Today, arab today

Arab Today, arab today Risk of leveraged loan defaults rises

London - Arabstoday

At least 25 per cent of unrated European leveraged buyout (LBO) companies with debt due by 2015 may default as the economy worsens and private equity owners refuse to inject capital, according to Moody\'s Investors Service. An analysis of European LBO companies found that 254 had a combined €133 billion (Dh612.87 billion) of debt due by the end of 2015, with more than half owed by 36 borrowers, Moody\'s said in a report. \"The 2014-2015 refinancing risk remains large and worrisome given our expectations of protracted macroeconomic weakness combined with the weak average credit quality of this universe,\" analysts led by London-based Chetan Modi wrote in the report. \"We do not expect that private equity sponsors will inject further capital into their own distressed companies primarily to assist their lenders.\"Concern is escalating that Greece may exit the euro, splintering the 13-year-old currency bloc and threatening global growth, as European lenders pressure the nation to meet bailout terms ahead of elections next month. The euro is trading near the lowest against the dollar since July 2010 after dropping more than 5 per cent in May, and the cost of insuring Spanish government and financial debt rose to record levels this month after Moody\'s downgraded 16 of its banks. Spanish Prime Minister Mariano Rajoy has called for Europe to \"dissipate any doubts about the euro\" as the nation\'s narrowing access to credit markets prompts the government to consider using public-debt securities rather than cash to fund a €19 billion bailout of its third-biggest lender, BFA-Bankia. The rate of European LBO defaults could more than double if companies are shut out of the high-yield bond market, according to the Moody\'s report. Issuance of new collateralised loan obligations is unlikely to recover and banks are less willing to hold leveraged loans, the ratings company said. While half of the companies studied are large enough to sell bonds, the high-yield market will be \"relatively discriminating\" given the amount of debt that needs to be refinanced, the report states. \"The multiples private equity firms were paying to buy those businesses in Europe was one, too high and two, they then loaded them up with way too much debt,\" Neil McDonald, the Hong Kong-based head of law firm Hogan Lovells International LLP\'s business restructuring and insolvency practice in Asia, said in a telephone interview yesterday. \"Now we\'re starting to see the consequences.\" Sovereign defaults At worst, a Greek departure from the common currency could spur sovereign defaults in Europe as well as bank runs, credit crunches and recessions, Pacific Investment Management Co.\'s global strategic adviser Richard Clarida predicts. Global trade and financial ties mean the pain wouldn\'t be confined to the euro area. JPMorgan Chase & Co. estimates a 1 percentage point slump in the euro countries\' economy drags down growth elsewhere by 0.7 percentage point. Financial contagion could be such that exporting nations from the UK to China would suffer. Stocks in Asia are headed for an 11 per cent decline this month, the steepest monthly slide since October 2008. The Nikkei 225 Stock Average fell in Tokyo after a government report showed Japan\'s jobless rate climbed to 4.6 per cent in April from 4.5 per cent in March. A similar risk of leveraged loan defaults doesn\'t exist in Asia, according to McDonald. \"Asian banks were much more cautious in their lending,\" he said. \"Having said that, private equity firms here are still facing all sorts of issues from putting capital into businesses with venture partners in China, and then getting burnt when those venture partners have procured a whole lot of local bank debt.\"

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today risk of leveraged loan defaults rises Arab Today, arab today risk of leveraged loan defaults rises

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today risk of leveraged loan defaults rises Arab Today, arab today risk of leveraged loan defaults rises

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today A no-frills business success

GMT 07:00 2017 Wednesday ,20 September

A no-frills business success
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Israel sees benefits in independent Kurdistan

GMT 07:58 2017 Wednesday ,20 September

Israel sees benefits in independent Kurdistan
Arab Today, arab today Saudi Arabia to unblock internet calling apps

GMT 11:31 2017 Wednesday ,20 September

Saudi Arabia to unblock internet calling apps
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Ministry seeks to improve education

GMT 14:49 2017 Sunday ,17 September

Ministry seeks to improve education
Arab Today, arab today New Zealand opposition looks

GMT 10:35 2017 Thursday ,14 September

New Zealand opposition looks
Arab Today, arab today Puerto Rico, Virgin Islands brace

GMT 12:01 2017 Wednesday ,20 September

Puerto Rico, Virgin Islands brace
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Intel chips loaded in Waymo

GMT 14:43 2017 Wednesday ,20 September

Intel chips loaded in Waymo
Arab Today, arab today Five trends at the Frankfurt auto show

GMT 12:04 2017 Monday ,18 September

Five trends at the Frankfurt auto show
Arab Today, arab today Horia Farghaly happy for success of “Case G”

GMT 12:14 2017 Monday ,18 September

Horia Farghaly happy for success of “Case G”
Arab Today, arab today France hopeful of persuading Trump

GMT 06:21 2017 Wednesday ,20 September

France hopeful of persuading Trump

GMT 06:31 2017 Saturday ,16 September

Eman Al Assy receives three offers

GMT 05:05 2017 Tuesday ,12 September

Pregnant woman's suicide roils China

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 19:18 2017 Monday ,18 September

5,000 'Dieselgate' deaths in Europe per year

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 04:26 2017 Wednesday ,20 September

Opioid overdose deaths take 2.5 months

GMT 11:40 2017 Monday ,18 September

Russia and Iraq restore air travel

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 12:56 2017 Friday ,15 September

Apple's grand plan in Ireland held up by a forest

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday