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’Merrill Lynch’s derivatives set sail for safe harbors
Over the last week, news outlets and bloggers have discussed Bank of America’s move to shift derivatives exposures from its Merrill Lynch unit to its deposit-taking, FDIC-insured bank.
A Bloomberg article kicked the whole thing off:
Municipal nut, meet your sledgehammer
What’s good enough for GM is apparently good enough for California and Illinois.
That’s the argument made by University of Pennsylvania law professor David Skeel in an op-ed in Tuesday’s WSJ:
Governors across the country are making similar promises [to balance budgets],
The Lehman flip [updated]
So the Lehman Bros estate has managed to clawback $500m worth of deposits from Bank of America — which means its sights are firmly set on its next legal pursuit.
Bloomberg, for instance, is currently running a story about the ‘next target’ of the Lehman estate — JP Morgan and its $8.6bn of collateral,
It’s official: Ambac files for Chapter 11
Not with a bang, but a whimper.
Emphasis FT Alphaville’s:
Ambac Financial Group, Inc. (NYSE: ABK) (Ambac or the Company) announced today that it has filed for a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (“Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (“Bankruptcy Court”).
Ambac in critical condition
Ambac to the … umm … Earth’s core:
Shares in the troubled bond insurer dropped 40 per cent on Monday after the firm said it had decided not to make a scheduled interest rate payment due this November 1st.
Guest post: what colour is your credit event?
Markit credit analyst Lisa Pollack explores the intricacies of CDS credit events
Before the “Big Bang” in the credit default swap (CDS) market in the spring of 2009, if you thought a credit event had occurred,
Orange County tells Harrisburg bankruptcy not so bad
On Wednesday, the mayor of Harrisburg — the capital of Pennsylvania, for those not au fait with US municipal geography — appeared on CNBC to discuss the gaping hole in the city’s finances.
The NY Times has detailed how Harrisburg torched its budget:
Igor, Igor! It’s alive, it’s alive… it’s ALIVE!
…and Dicktor Fuldenstein’s monster will walk the earth once more. Or will it? We simply couldn’t resist giving you more details of the restructuring plan for Lehman Brothers — filed in New York late on Monday,
Sleeping with private equity
There’s been considerable gnashing of teeth over the downfall of the venerable American bed maker, Simmons. Having helped people sleep better for more than 135 years, the company answered to five different private equity masters before tumbling into insolvency under its most recent owner,
CIT readies a pre-packaged Chaper 11, seeks to re-emerge within 2 months
Not that this was remotely unexpected, but commercial lender CIT on Sunday issued the following statement (emphasis FT Alphaville’s):
CIT Board of Directors Approves Proceeding with Prepackaged Plan of Reorganization with Overwhelming Support of Debtholders
Nearly 90% in Favor of Plan;
CIT, or the world’s least unexpected bankruptcy filing (UPDATED)
Alright, there are more than a few contenders to the title of the world’s least unexpected bankruptcy filing (not least Woolworths, or Thornburg Mortgage), but CIT has to be up there.
On Friday, CNBC reported the deeply troubled consumer lender would file for Chapter 11 bankruptcy protection on Sunday night.
CIT debt swap struggles, bankruptcy looms
CIT, the troubled lender to small and medium-sized businesses, is seeing little interest from bondholders in a debt exchange offer aimed at repairing its fragile balance sheet, Reuters said, citing sources familiar with the matter.
Lehman Brothers bankers claim £70m in lost pay
Six European bankers at Lehman Brothers are claiming £70m for lost pay and bonuses from the administrators of the collapsed bank, the Telegraph reported, citing court documents. Italian banker Riccardo Banchetti,
Issue negative research report, be accused of trade libel
Ever wonder why there are so many upbeat analyst reports out there? Consider the following press release from car rental company Hertz on Monday (emphasis FT Alphaville’s):
Hertz today announced that it has filed a lawsuit in the Superior Court of New Jersey,
The great Lehman derivatives muddle
Every now and then, a bit of news comes around that threatens to turn the world as we know it on its head. The purported decision by a US bankruptcy court to overrule one of the fundamental tenets of the derivatives market – the ISDA Master Agreement – may turn out to be something of a game-changer.
For Kaupthing’s creditors, ‘recovery’ means ’20 cents on the dollar’
Creditors of Kaupthing, the failed Icelandic bank with a fondness for over-the-top advertising, are unlikely to be having a good week.
As Bloomberg reported on Tuesday, those with claims on the bank will get back about 20 percent of what they are owed,
The CIT deathwatch continues
Increasingly, the question seems to be when – rather than if – troubled commercial lender CIT will file for bankruptcy.
The lender has faced a series of end-of-the-world deadlines and won an equal number of eleventh hour reprieves,
Advisers to CIT’s bondholders said to push for bankruptcy
Advisers to the bondholders that gave troubled commercial lender CIT a $3bn lifeline are recommending the company be restructured through a bankruptcy after a debt tender next month, Bloomberg said, citing a person familiar with the matter.
CIT board approves $3bn rescue package
CIT’s board on Monday approved a two-year, $3bn rescue package with a group of lenders enabling the troubled US finance group to avoid a bankruptcy filing, after round-the-clock weekend talks. The company and its creditors had to move quickly to arrest a slide into bankruptcy and prevent its best customers from defecting for fear the lender could no longer support them.
A different take on CDOs and CIT
News that CIT’s potential bankruptcy could impact a number of synthetic CDOs — in Europe in particular — hit the wires earlier this week:
NEW YORK, July 14 (Reuters) – Standard & Poor’s said on Tuesday that 1,881 synthetic collateralized debt obligations are exposed to CIT Group (CIT.N:
CIT death plunge
CIT stock is trading again after being suspended over the course of what now appear to be failed government bailout talks.
Here’s how shares in the beleaguered corporate-lender have opened:
That’s a drop of some 70 per cent to 40 cents — a market cap slide which increasingly ups the odds of the lender failing to meet its minimum capital ratios and therefore the probability of bankruptcy.
CIT would be the fourth-largest bankruptcy in US history
The short-term financing crisis over at CIT is gaining momentum after Moody’s slashed the corporate lender by four levels to B3 from Ba2 on Monday.
By the way, if you’ve not heard of CIT, this is probably a good time to get acquainted with the company.
GM owes creditors $172.8bn, has assets of $82.3bn
GM has officially petitioned for Chapter 11 bankruptcy relief, and its court filing makes for some interesting reading.
The NY Times has the CliffsNotes:
In its bankruptcy petition, G.M. said it had $82.3 billion in assets and $172.8 billion in debts.
GM to file for Chapter 11 protection
General Motors will file for Chapter 11 bankruptcy protection in New York on Monday, in a humiliating fall from grace for a symbol of America’s industrial might and the world’s biggest carmaker for much of the 20th century,
Christian Lacroix files for bankruptcy protection
The bonfire of the vanities continues: French couturier Christian Lacroix filed in Paris for court protection from creditors on Thursday. The NYTimes reports (emphasis FT Alphaville’s):
Although Lacroix’s chief executive officer,
Brace yourselves for record corporate defaults in 2009
In August last year, Moody’s issued what was then considered a gloomy outlook for corporates in the US. The ratings agency said it expected the global default rate to reach to 6.3 per cent by the following August,