Archive - Mar 13, 2009

NRUC, whose $1.5 billion credit facility matured today, managed to roll the facility into a new $1 billion 364-day facility expiring on March 12, 2010, via a consortium of 12 banks. The changing bank landscape is obvious when one considers that Bank of Nova Scotia and RBS are co-lead arrangers and joint book runners instead of traditional go to secured lenders.

REIT Simon Property Group announced results of its dividend election today, which for all practical purposes could be called anything but an "election." The final outcome is that shareholders will receive a dividend of $0.90/share consisting virtually entirely of stock (90%) and the balance in cash.

Otherwise humorless White House press secretary Bob Gibbs had his first attempt at cracking jokes when he told Chinese premier Wen Jiabao that the latter doesn't have to worry about anything and that "there's no safer investment in the world than in the United States." [but to please not compare U.S.

Otherwise humorless White House press secretary Bob Gibbs had his first attempt at cracking jokes when he told Chinese premier Wen Jiabao that the latter doesn't have to worry about anything and that "there's no safer investment in the world than in the United States." [but to please not compare U.S.

Broadcaster of Mexican soap operas Univision just made credit bubble investors even more sorry to have bought into its GS underwritten March 2007 Pay In Kind (PIK) bond, after disclosing in an 8K filing last night that it would PIK the September 15 interest payment on its 9.75% Senior Notes due 2015, and the in-kind election would extend indefinitely into the future. As reason for the PIK election the company stated the following:

Some of the primary culprits for the credit bubble, created part and parcel with the ubiquitous spread of the securitization product, were the alphabet soups of assorted collateralized asset pool funds such as CDOs, CMOs and, most notably, CLOs. A week ago Zero Hedge wrote about the increasingly prominent position of CLOs in the crosshairs of rating agencies, when Moody's put all non-AAA CLO tranches on downgrade review. The action impacted funds holding about $440 billion in assets.

I am still amazed by the kind of bear market rally that a few statements of dubious propriety by CEOs of semi-nationalized banks as well as a couple of misread economic statements can generate.

The last time we wrote about amusement park operator Six Flags it was on defibrillator alert. WSJ has come out with a report in which CFO Jeff Speed confirms he has hired bankruptcy law firm and financial advisors Paul Hastings and Houlihan Lokey. Speed states that he is hoping (against hope) to arrange a consensual plan with creditors ahead of an August deadline for $319 million in equity payments.

We are surprised to have missed this the first time around.

Last night's interview is a must see for anyone who ever gets their investment (or any other kind) of advice from CNBC. While after this interview Cramer's future at the network is not so certain, maybe, just maybe, CNBC will reevaluate its role in the financial media community.

Part 1

• Global trade slowing down: US Exports fall 6.7%, trade narrows to six year low (Bloomberg)
• Angry Maxine Waters' special concealed interests (NYT)
• Goldman cuts global forecast to 1% contraction (Bloomberg)
• Swiss changing tax evasion policies, preamble to full tax evader disclosure?
  

• Gamechanger: China officially wants U.S.

I will keep harping on this theme until such time as harping is no longer necessary. Equity market rippage has resulted in essentially zero change in overall country risk profiles (and deteriorating risk in Japanese risk). There is a massive disconnect between equities and credit, especially sovereign credit which is becoming a defacto proxy for corporate risk via extended short-term guarantee programs and assumed liabilities.

I will keep harping on this theme until such time as harping is no longer necessary. Equity market rippage has resulted in essentially zero change in overall country risk profiles (and deteriorating risk in Japanese risk). There is a massive disconnect between equities and credit, especially sovereign credit which is becoming a defacto proxy for corporate risk via extended short-term guarantee programs and assumed liabilities.

Today was one of only four times in history for the Swiss National Bank to intervene alone, that last time being in the mid-1990’s.