Had Psychiatric Solutions' board begun shopping the company three years ago during the halcyon days of private equity, the negotiations may have taken a very different turn, says Cyrus Sanati.
But now cheap debt, the life blood of private equity, remains elusive. That means private equity firms need to use more of own capital to do a deal, lowering the internal rate of return of the investment. If the mix of debt and capital does not work, private equity backs off.
May 18, 2010 8:13 AM
American HomePatient (Ticker: AHOM) has entered its tenth forbearance agreement with its senior debt holders. About $226 million was due to be repaid in August 2009, and this deal gives the company until May 16. Info on the last nine agreements is available at this link.
Apr 15, 2010 7:49 AM
Rebecca Wilder frets about the scope of government assistance in propping up household incomes what that means for our collective efforts to work down our debt.
If income growth is negative, i.e., deflation, then real debt burden rises. 30-yr mortgage payments, for example, are fixed in nominal terms and become more difficult to meet as income declines. In this case, widespread default is likely.
Apr 9, 2010 11:05 AM
CNBC's David Faber says hospital chain HCA will settle on the underwriters for its upcoming initial public offering in the next few weeks and then bring its shares to market in July. Faber said the offering could reach $4.5 billion, 50 percent more than earlier reports suggested. (Hmm, that brings to mind the company's bond sale spree a year ago.) Separately, HCA also disclosed that it tweaked the terms of one of its credit lines earlier this week, extending the due date of $2 billion of loans from late 2013 to the spring of 2017.
Apr 9, 2010 7:24 AM
Debtwire reports on lenders' frustration with Gibson Guitar CEO Henry Juszkiewicz, who cycled through three CFOs last year and still owes them audited 2008 numbers. Sources say the bank group wants to push for tighter lending standards and improved governance, led by the recreation of an independent board of directors.
The only thing keeping lenders from accelerating on the debt is the IP value in Gibson’s brand, which is associated with high quality products and commands respect in the industry, all of the sources said. “It’s not yet to the point that Gibson needs to restructure, but in the absence [of curing the default], part of me wonders if they are trying to stretch this game out as long as they can before the house of cards comes falling down,” one of the sources noted.
Apr 8, 2010 2:48 PM
Barry Ritholtz is hoping the give and take on Christopher Dodd's financial reform plans doesn't end up with the root causes of the financial crisis being left untreated.
The Consumer Protection Agency might be a nice way to provide some education about finance to the average American, and help to reduce fraud, and increase transparency in consumer contracts,. However it had less to do with the cause fo the crisis than many other factors. Reducing leverage, re-regulating derivatives, maintaining adequate capital, separating insured deposits from more speculative activities are much more important.
Apr 7, 2010 10:32 AM
Citing the added financial stresses of funding the Music City Center, Fitch Ratings analysts have lowered their opinion of Metro's general obligation bonds to AA-, albeit with a stable outlook. (They'll be revised back up to AA in a few weeks because of a Fitch recallibration.) The firm also has rated as A+ the $633 million in bonds that will help build our new convention center.
Apr 6, 2010 3:10 PM
Barry Ritholtz has a few questions for lawmakers looking to tackle a number of the causes of the near-meltdown of financial markets.
It seems that each new proposal for reforming Banking and Wall Street is more banker friendly – and ineffective – than the previous one. They are milquetoast, meaningless, appeasing nonsense. The reformers are in a race to see who can offer up legislation that is least offensive to bankers.
Mar 31, 2010 8:21 AM