Archive - Mar 20, 2009 - Story

Last night S&P downgraded MGM from B- to CCC. Didn't take much more than an impending default to stir the rating agency. S&P analyst Ben Bubeck discovered what even Kirk Kerkorian has known for years (and being 90+ years old, these things are expected to take some time).

REIT Simon Property Group, which yesterday announced it was raising $500 million in bonds, will price these notes to yield 10.875%. And this is an A3/A- issue!

Black River Asset Management, which according to Hedge Fund Alert "runs many funds and at one time had $10 billion under management, [and] was hit with a slew of redemptions requests last year," has employed a spin on the reverse auction process utilized by other formerly reputable funds such as Golden Tree. The Cargill affiliate, trying to appease a wave of March 31 redemptions, has told investors to submit the largest discount they are willing to accept for their shares.

In addition to the $261 million loan BWIC reported yesterday by Debtwire, another $233 million BWIC, this time in IG bonds has hit the market. Traders have only until 11 am this morning to submit lowball bids. While loan BWICs over the past month have been increasing rapidly, bond and especially investment grade bonds have not seen wholesale blue light specials yet.

Huge CDS buy rally last week - net notional purchasing of protection skyrocketed from a mere $12 billion last week to $250 billion, with a net contract increase of 14,330 contracts compared to only 4,615 in the prior week. As ZH presumed last week, the consumer services space did in fact see significant net purchasing ($42 billion) and spread widening. Other major derisking sectors were financials ($65 billion) and sovereigns ($34 billion).

Huge CDS buy rally last week - net notional purchasing of protection skyrocketed from a mere $12 billion last week to $250 billion, with a net contract increase of 14,330 contracts compared to only 4,615 in the prior week. As ZH presumed last week, the consumer services space did in fact see significant net purchasing ($42 billion) and spread widening. Other major derisking sectors were financials ($65 billion) and sovereigns ($34 billion).

• Citi CFO Crittenden becomes chairman of winding down division Citi Holdings, Ned Kelly new CFO (Reuters)
• Bonus tax has left Wall Street scrambling for the exits (Reuters)
• IMF says US stability plan is worthless, lacks "essential details" (FT)
• A "sober" look at GECC's sad state of affairs (

• Tearing up monetary policy rulebooks in Eastern Europe (Bloomberg)
• The noose tightens: BofA was involved in Merrill's writedowns (FT)
• Leon Black says the commercial real estate black hole will cost $2 trillion.
  

Jonathan Weil of Bloomberg goes apeshit on the FASB, whom he affectionately calls the Fraudulent Accounting Standards Board, claiming that the FASB whored away its soul earlier this week when it "unveiled what may be the dumbest, most bankrupt