Did the Regulators Just Ring the Bell on the Deal making Spree of 2009-2014
Most analysts miss major changes in the financial system.
The reason for this is that they only look at the economic data for signs of what’s happening. If you’re looking for a competitive edge in your forecasts, however, you need to learn to “read between the lines” on news releases.
Which is why I believe 99% of analysts are overlooking the following story (hat tip Bill King’s King Report).
Three longtime banks for private equity firm KKR & Co LP (KKR.N) have snubbed a request for a $725 million buyout loan over concerns it is too risky to pass muster with U.S. regulators, sources familiar with the situation said on Thursday.
The banks had funded a similar deal six months earlier…
Now, the three banks have refused to bankroll a bid by KKR-owned Brickman to buy rival landscaping company ValleyCrest Companies LLC, as they seek to cut back on making new loans that do not comply with the leveraged lending guidelines, the sources said. Dell Inc DELL.O founder Michael Dell's investment firm owns ValleyCrest.
It is unusual for banks that lead the financing of a leveraged buyout of a company not to be tapped for smaller follow-on financings.
KKR is one of the premiere name brand private equity firms in the world. Here we find that “longtime” banks, or banks that have done business with KKR for decades, have decided NOT to fund a KKR deal due to new leverage guidelines.
Even the article itself notes this is unusual.
This story is of MAJOR importance as it indicates the following:
1) The deal-making spree of the last 3 years is peaking out.
2) New regulations are beginning to affect the wave of liquidity that has buoyed stocks in the last 5 years.
Does this mean stocks will collapse right now? Not necessarily. But it is a clear sign that things are changing behind the scenes in the financial system. The smart money is taking note… will the rest of the market?
This concludes this article. If you’re looking for the means of protecting yourself from what’s coming, you can pick up a FREE investment report titled Protect Your Portfolio at http://phoenixcapitalmarketing.com/special-reports.html.
This report outlines a number of strategies you can implement to prepare yourself and your loved ones from the coming market carnage.
Phoenix Capital Research
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