This week’s Coffee Time Reads feature bubble talk, global insolvency expectations (Europe does well), a sobering take on the economic recovery, inequality and the “balkanization” of the global economy by Nouriel Roubini. Howard Marks was out with his latest memo – arguing its no longer growth vs. value but growth AND value approaches that are needed to value today’s companies.
2 Pieces on restructuring – one from Forbes on the use of DIP financing as a means of control and the second from 9Fin documenting the first cross class cram down under the new UK restructuring laws. A study of Large corporate bankruptcies in the US (a Who’s Who of Who has Gone Pop) highlights on the corporate scalps CoVid has claimed.
Aswath Damodaran has updated his valuation database, – well worth a look and a piece from S&P on machine learning to model Credit Risk provides a simple into to the topic and its implementation.
Finally there is an excellent podcast with Dr Di Martino Booth and Jesse Felder on the Fed, why policy has ended up where it is, where it is going and what it could mean.
Click on the links in the tweets to be taken to the relevant read. If you are on twitter follow us: @EuroYield
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Coffee time read:— EuroHighYield (@EuroYield) January 11, 2021
"the lowest expected increases in insolvencies are all found in Europe. “In Germany, France, Austria, Belgium, Switzerland and Italy, insolvencies are likely to go up by percentages ranging from 6 percent to 20 percent."https://t.co/fBI4ATzMVw
DIP -> Control— EuroHighYield (@EuroYield) January 13, 2021
"A fascinating 2020 study by Kenneth Ayote (UC Berkeley) and Jared Ellias (UC Hastings) concludes that corporate restructurings are increasingly imposed by, and designed to maximize recovery for, pre-petition senior creditors alone"https://t.co/W4LBvaGbEx
AKA, the limits of monetary policy...— Topdown Charts (@topdowncharts) January 13, 2021
Central banks have been cutting interest rates, but commercial banks have been increasing the credit quality hurdle -- meaning: rates may be low, but you might not be able to even get a loan.
more: https://t.co/cXbgjQ8gPD pic.twitter.com/givpoaLkGZ