Archive - Mar 2009

And now for a little Moody's hatin'. The rater looks at insurance companies, and predicts that due to horrendous operating results, declining statutory capital and the weaker players' inevitably becoming swallowed by the larger/healthier ones (very curious just who these are), there will be a significant consolidation wave in the insurance industry.

You know the joke about Moody's fooling none of the people none of the time? Well, they are trying to make some bold predictions about financial companies' bondholders. And based on what they are saying senior and subordinated bank creditors should be worried... very worried...

Another long-suffering name bites the dust. Primus Telecommunications filed for bankruptcy today in Delaware (09-10867). The company listed between $500 million and $1 billion in debt. Not much in the press release and also not much of a surprise: bonds had been trading in the single digits since forever.

Skadden Arps is listed as legal advisor, while CRT, which has recently been poaching restructuring bankers left and right, including from prominent hedge funds, will be financial advisor on the case.

Zero Hedge has written much about this so no comments here. Good article from Bloomberg summarizing the upcoming pain. Some salient quotes:

In a double whammy to shareholders, Aloca announced after hours that not only would it cut its dividend to a token 3 cents from 17 cents, but also raise $1.1 billion in stock and convertible notes, thereby diluting existing bagholders.

Interesting twist in Aigbonusgate: WSJ reports that Obama will force AIG to re-repay bailout funds for money that is spent on bonuses (which of course makes no sense at all):

Interesting twist in Aigbonusgate: WSJ reports that Obama will force AIG to re-repay bailout funds for money that is spent on bonuses (which of course makes no sense at all):

Bill Ackman is all over the news today, first TGT now GGP. Bloomberg quotes the scourge of MBIA/Allied Capital as saying he "expects the shopping-mall owner to file for bankruptcy imminently." In a BTV interview earlier, Ackman had said Pershing Square had taken stakes that would give it a 25% equity position, and that he advocates a bankruptcy in which "the equity survives intact."

“Most of the time, insolvent companies go bankrupt. It’s rare for a solvent company to go bankrupt.

The chief executive officer supervising the portfolio of fastest growing credit-card delinquencies was paid a total of $27.3 million in 2008. His packages consisted of:

- $1.25 million base
- $10.2 million in stock awards

Nelson Peltz, who at one point had held high hopes for flame retardant plastics maker Chemtura, has had enough. His proxy on Chemtura's board, Ed Garden, a Vice Chairman of Peltz's Trian Fund Management, announced on Friday he was resigning from the Board of Directors.

Nelson Peltz, who at one point had held high hopes for flame retardant plastics maker Chemtura, has had enough. His proxy on Chemtura's board, Ed Garden, a Vice Chairman of Peltz's Trian Fund Management, announced on Friday he was resigning from the Board of Directors.

The company which recently lost bragging rights (at least in name) to the tallest tower in the west hemisphere, is working hard not to also lose access to precious liquidity. Sears Holdings is currently in the market to extend the March 2010 maturity of its $4 billion ABL through Bank of America and Wells Fargo. Eddie Lampert's brand name is expected to allow for not too much of a hair raising spread, as the new loan is rumored to be pricing around Libor + 400 with a Libor floor.

Manufacturing downturn continues apace

Broad-based declines in output; new lows in utilization

Industrial production fell 1.4% M/M in February for a result below consensus forecasts. Auto output partially rebounded 10.2% M/M as some factories came back on-line after extended shutdowns in January. This added 0.5 ppts to overall manufacturing production over the month, which still managed to fall 0.7% M/M with declines across a broad array of industries.

More news on Six Flags, some good some not so good... First, I reprint what Six Flags PR department would like ZH's readers to know, so we present that with no comment:

Dear Tyler,

I hope this email finds you doing well this afternoon, here is another update for you.