Saturday, November 21st, 2009
Fallen Angels and crossover credits are often targeted by alternative investor groups like hedge funds and risk arbitrageurs who speculate on the mispricing between the various financing instruments of a company.
Characteristics of Fallen Angels:
Tags: Aids finance, Debt, economics, estate, Estate Planning, heir, income, inheritace, insurance, Interest, joit, last will, Market, market cycle, rate, tenancy
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Thursday, October 22nd, 2009
After the 1990/91 recession the US corporate sector underwent a period of massive restructuring. Balance sheet repair, rights issues to repay debt, asset disposals and measures to improve cash flow generation led not only to falling leverage, but also to low earnings growth rates. During this first phase of the debt–equity cycle, the ‘repair phase’ credit usually outperforms equities. It lays the foundation for higher growth rates due to an improved ability to generate cash flows. The subsequent recovery period is beneficial for equity markets as well as credit markets, as the years 1994–97 have shown.
Tags: Aids finance, currency cycles, Debt, economics, estate, Estate Planning, heir, income, inheritace, insurance
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Wednesday, October 21st, 2009
Clearly credit and equity investors tend to look at the corporate sector from different angles. While the focus of equity markets is primarily on earnings growth, credit investors rely on debt-related factors to make their decisions. However, if one combines both perspectives the result is a stylized debt–equity cycle that may support both parties in the process of decision-making. The four phases of the cycle depend on the degree of earnings growth (high or low) and changes in leverage (rising or falling). Changes in leverage reflect the companies’ efforts to change their capital structure as well as their ability to generate cash flows. As an example we will examine the last complete debt–equity cycle that reached from 1991 to 2003.
Tags: annuitant, Annuities, banking, banks, Bearish Patterns, Budgeting, cash, company costs, currency cycles, Debt
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