That's where we're heading, The Washington Post reports. There's concern that a massive wave of borrowing — with governments selling an estimated $4 trillion in new bonds — will create more debt than markets can handle.
The surge will course through the world financial system for several years as countries, corporations and banks borrow record amounts of money to repair the damage from the financial crisis and pay back loans from the boom that preceded it. One crucial concern about the nascent economic recovery is whether markets can smoothly absorb that new debt, or whether it will force less-creditworthy governments into a Greek-style crisis, push weaker banks and corporations into default, and possibly trigger another downturn. ... "The dollar amounts around the world that we are looking at are unprecedented," said Standard & Poor's Managing Director John J. Bilardello. "It was debt issued during the peak years [that] . . . originated in a fairly strong market" but is coming due in a much weaker one.
Jul 15, 2010 9:02 AM
Vanguard Health Systems today said it closed the private placement offering of $225 million in 8 percent senior notes. The Nashville hospital company plans to use the debt, in conjunction with cash on hand and, to fund its acquisition of nonprofit eight-hospital health system Detroit Medical Center. The company plans to close on the acquisition sometime between October 1 and November 1.
Jul 14, 2010 11:57 AM
High unemployment and difficulty in securing new credit have helped push consumer credit scores to a new low. In April more than a quarter of Americans, or 43.4 million people, had credit scores below 600 — 10 percent more people than the norm, according to FICO Inc.
"Until the labor market turns around, people will remain unable to pay bills," DeRitis said. "Lowered consumption will only add extra friction to the economy."On the other hand, the percentage of people with credit scores above 800 climbed to 17.9 percent. The historical average is 13 percent.
Jul 13, 2010 11:29 AM
Fitch Ratings recently affirmed its 'AA+' rating on Nashville Electric Service's $520.9 million in outstanding revenue bonds. It's the second time the public utility has received the high rating from Fitch.
NES President & CEO, Decosta Jenkins, said that he is “gratified that this respected rating agency expressed such a high level of confidence in our ability to succeed. Our commitment is to deliver the highest level of customer service and reliability at the lowest reasonable price.”NES distributes energy to more than 700,000 Middle Tennessee customers
Jul 12, 2010 11:20 AM
Following Vanguard Health Systems' sale of $225 million of senior unsecured notes, Standard & Poor's reaffirmed the company's stable, 'B' corporate credit rating and raised its ratings on the company's unsecured debt and senior secured credit facilities. For Vanguard's $815 million senior secured term loan and $260 million revolving credit facility S&P raised the issue ratings to 'BB-' from their 'B+' rating. The agency also raised its rating on the company's $1.175 billion in senior unsecured notes, including the $225 million add-on, to 'B-' from a 'CCC+' rating.
"The issue-level ratings were raised because our estimate of the value of the company in a default scenario, including the acquisition of the Detroit Medical Center, has improved," said Standard & Poor's credit analyst David Peknay. The speculative-grade ratings on Vanguard reflect its relatively undiversified portfolio of hospitals and its highly leveraged financial profile. The pending addition of the eight-hospital Detroit Medical Center (DMC) would add another major market to San Antonio and Phoenix, which now account for the majority of the company's cash flow. However, the acquisition, which would expand the revenue base from the current 15-facility hospital portfolio by about 60%, will be challenging."
Jul 12, 2010 7:57 AM
Consumers are continuing to use less credit and cut down thier debt. May figures show consumers' outstanding debt fell by $9.1 billion — about $7 billion more than expected, led by a $7.3 billion decline in revolving credit outstanding. Non-revolving credit fell by $1.8 billion.
Overall consumer credit outstanding now stands at $2.415T, the lowest since March ‘07 and has fallen for 18 of the last 20 months. A combination of debt paydown, more savings and reduced credit access has the consumer doing the tough but rational thing of deleveraging. The resulting higher savings rate, while a crimp to consumer spending, is the seed of investment and is the long term offset to the short term economic impact to 70% of the US economy.
Jul 9, 2010 7:53 AM
A week after its shareholders voted to reincorporate the company in Nevada, home health care company American HomePatient announced a stock tender offer designed to buy back as many shares as possible that aren't already owned by Highland Capital Management. Highland will pay 67 cents per share for HomePatient's stock (Ticker: AHOM) starting today. Highland's deal to take the debt-burdened company private was first announced in April.
Jul 7, 2010 11:48 AM
What if colleges and universities waived tuition and fees for medical school students in favor of collecting a percentage of their income later? Health Blog has a nice discussion of this idea, proposed in the American Journal of Obstetrics & Gynecology earlier this month. The goal is to reduce medical students' debt load — about $145,000 for public-school graduates and $180,000 for private-school goers — thus opening the door to more would-be doctors and allowing them to more freely choose among specialties.
Jul 7, 2010 8:19 AM
With a shareholder vote to reincorporate in Nevada, home health care company American HomePatient took a step in the direction of becoming a private company. Debt-burdened HomePatient (Ticker: AHOM) in April announced a deal to be taken private by its largest investor, Dallas-based Highland Capital Management for 67 cents per share. The Brentwood-based company is one of the country's largest home health operators, working in 33 states.
Jul 1, 2010 7:14 AM
The credit analysis team at Morningstar has begun covering the debt of Goodlettsville-based Dollar General with a BB+ rating. The analysts say the retailer can't continue to count on the spending tailwinds it's gotten during the recession and that it will likely have to refinance some of the almost $2 billion in debt it has coming due in starting in 2013.
Jun 14, 2010 12:09 PM