Dominik Dumaine’s Post

Great article by Robin Wigglesworth based on some very smart work on the current sponsor vs creditor vs creditor landscape from Rogoff Bradley and Corry Short of Barclays What is left unsaid is that plummeting document quality and recoveries in 1L BSL has one simple solution: Allocate more to private credit where you have exposure to industry leading middle market borrowers, that in many cases could have accessed the BSL market,* but usually with meaningfully better documentation and structuring! Quite literally having your leveraged loan cake and eating it with double digit returns and better docs! *meaning a regular way BSL market, some 22/23 vintage deals of course could not economically access the market at that time

FT: - Internecine creditor bloodletting is one of FT Alphaville’s favourite spectator sports, so we were naturally intrigued when an interesting new report on the topic from Barclays’ credit strategists landed in our inbox. - Corry Short and Bradley Rogoff say “weak covenant protections and increasingly onerous bankruptcies have permanently changed the default landscape”. This will lead to more creditor-on-creditor violence on both sides of the Atlantic, they predict, and include a bit of a heartfelt sigh on behalf of their community. - We believe distressed exchanges and other forms of LME are challenging for the market as a whole, given that credit analysts are now allocating a larger proportion of their time to game theory rather than modelling fundamentals. - The first factor they highlight is that a 91 per cent of the entire leveraged loan market is now “covenant-lite” — lacking maintenance covenants that restrict indebtedness levels — up from under 20 per cent before the financial crisis. - At the same time, other common covenants have been eviscerated by indentures that open up various loopholes for companies to try funny business. Unsurprisingly, private equity-owned companies have particularly creditor-unfriendly loans. https://lnkd.in/ggUq-BTt

Great to see this post

The CRED iQ® analysis of the AAA loss and the SBLL sector on front page of Commercial Observer: Full story here: https://lnkd.in/eER2iyxz

Thanks to Bloomberg News Bloomberg for bringing attention to the long period of low-interest rates, which has led to an incorrectly priced opportunity cost of money and impacted asset values. As a result, those who have not left cushions in the way they have structured their business and property assets are starting to feel the bite. It's important to stay vigilant and ensure that our assets are appropriately structured to weather any changes in the market. However in most cases it is too late. That horse bolted years ago already. #InterestRates #AssetValues #BusinessAssets #PropertyAssets #MarketChanges

Exciting update about public finance investment banking capabilities at Texas Capital Securities!

In this episode of Conversations in European Credit, KBRA Head of European Research, Gordon Kerr, speaks with Kali Sirugudi from KBRA’s #RMBSratings team. Their discussion highlights the growing specialist lender market in the UK and the use of securitisation markets for funding. Can the market continue to grow? Listen Now: https://lnkd.in/e6X5QJyE | #RMBS #Europeanmarket

Fascinating to see the pie chart like this. Interesting data about the lenders that are exposed to NYC real estate

An absolute pleasure last week to spend the day with the team United Trust Bank Limited as we focussed on the ever evolving and dominant landscape of the UK broker market, and how as a lender they continue to set themselves apart by leading change in an extremely crowded market place, by putting the needs and growth objectives of their broker partners at the heart of everything that they do Nathan Mollett Astrid Michael Kerry Pickering Lauren McQuilken Alex Cooper Paul Barter CCBI Gordon McArthur Aleksandra Lesniak Jenna Forbes CB Asset Resourcing Ltd #commercialfinance #businessfinance #brokers #refinance #assetfinance #salesdevelopment #salestraining

New York Community Bank (NYCB)'s Strategic Revival with $1 Billion Capital Boost Led by Mnuchin's Firm - NYCB, a commercial real estate lender grappling with market challenges, has successfully secured an equity investment exceeding $1 billion. This strategic financial infusion spearheaded by Steven Mnuchin’s Liberty Strategic Capital, alongside Hudson Bay Capital and Reverence Capital Partners, marks a significant vote of confidence in the troubled lender, signaling a potential turnaround in its fortunes. The announcement catalyzed a rebound in NYCB's stock, which had previously experienced a notable decline. - The capital raise initiative was meticulously planned, considering the bank's risk profile and the necessity to bolster its reserves. Steven Mnuchin emphasized that this fresh injection of capital would position NYCB favorably in comparison to its peers, potentially elevating its reserve coverage ratios to meet or exceed industry standards. This strategic move underlines the investor group's confidence in NYCB's resilience and future prospects. - In a decisive leadership shuffle, NYCB welcomed Joseph Otting as its new CEO, a seasoned professional with a history of successful collaboration with Mnuchin, notably in transforming IndyMac post the 2008 crisis. This change in leadership, with Alessandro DiNello transitioning to a non-executive chairman role, introduces a new strategic direction aimed at revitalizing NYCB's operations and restoring stakeholder confidence. - The investment package comprises a mix of common shares and convertible preferred stock, alongside warrants, structured to raise a total of $1.05 billion. This capital restructuring is anticipated to fortify NYCB's financial position, enabling it to navigate the current market challenges more effectively and embark on a path of recovery and growth. - Despite the tumultuous year marked by a substantial loss in stock value, exacerbated by dividend cuts and increased loan loss provisions, this capital infusion and strategic leadership revamp are poised to rejuvenate NYCB. The bank's focus will likely shift towards addressing its identified "material weaknesses" in loan risk tracking and steering the institution towards stability and growth. #nycb #bankingsector #capitalraising #marketanalysis #financialstability #bankruptcy