by Tim Delaney | Dec 12, 2011
The New York Times DealBook blog just put out a fine piece on the collapse of MF Global: A Romance with Risk That Brought on a Panic by Azam Ahmed, Ben Protess, and Susanne Craig (December 11, 2012). It’s the most comprehensive summary of the events that led to...
by Ron Carleton | Nov 22, 2011
We’ve been running a poll on the Comments on Credit blog for the past few months asking 2 questions: It is no surprise that bankers like the debt service coverage and fixed charge coverage ratios best – they are good measures of a company’s ability...
by Tim Delaney | Nov 6, 2011
There have been movies about finance before: Wall Street and Wall Street: Money Never Sleeps, for instance. There are films about the financial crisis as well: HBO’s Too Big to Fail. But the best movie about finance has to be Margin Call, just out in theaters...
by Tim Delaney | Oct 26, 2011
Michael Woodford lost his job on October 14. He had been CEO of Olympus, the Japanese maker of medical systems and cameras, only since last July; and as recently as September, the company’s Chairman had said he was “extremely pleased” with Mr. Woodford’s performance....
by Tim Delaney | Oct 21, 2011
There are a number of worthwhile accounts of the firms that failed or nearly failed in the great financial market collapse of 2007-2009. Too Big to Fail by Andrew Ross Sorkin and All the Devils Are Here by Bethany Maclean and Joseph Nocera are two strong general...
by Tim Delaney | Apr 24, 2011
When the Deepwater Horizon blew up in April of 2010 and the Macondo well started spilling thousands of barrels of oil a day into the Gulf of Mexico, BP’s management had to deal with massive human, environmental, operational, and financial challenges. The controversy...
by Ron Carleton | Mar 16, 2011
We welcome your comments and questions. Here’s a question from one of our readers: “I frequently come across credits that have a substantial amount of non-cash interest expense related to hybrid financial instruments.Specifically, the one I have in mind...
by Tim Delaney | Feb 20, 2011
It may be disappointing, but it can’t be surprising that Borders Group went bankrupt this week. It was clear some time ago the company was heading deep into distress. What made it so clear? The six classic early warning signs of financial distress. We covered...
by Tim Delaney | Feb 11, 2011
We blogged about Borders Group back on January 4. Even though the company has a new financing commitment, it continues to have problems paying suppliers. It looks like Borders is still circling the drain. Borders’ survival is questionable, but for us the more...
by Tim Delaney | Jan 24, 2011
Jean Marie Messier became Chairman of Compagnie General des Eaux in 1996 at the age of 38. He was a graduate of elite French universities. At age 29, he held a senior post in the French Ministry of Economy and Finance. At age 32, he joined Lazard Frères, where he...
by Ron Carleton | Jan 4, 2011
The Wall Street Journal reported yesterday that Borders Group Inc. was halting payments to some suppliers, and that one publisher had stopped shipping books to Borders. The end is near. As we discussed in an earlier post, if trade creditors lose faith in a company,...
by Ron Carleton | Dec 28, 2010
Here’s our list of the top 10 topics on the minds of credit professionals in 2010: 10) Risk Management – We’ve written many times this year about risk management, both good and bad. Whether it was BP and operational risk, suppliers dealing with...
by Ron Carleton | Nov 18, 2010
The Terrible Auto Market With the success of the GM IPO, we may be tempted to forget the terrible decade the U.S. auto industry has just completed. Car sales steadily declined from 2000 through 2007, then collapsed in 2008 and 2009 to a level not seen since 1951. ...
by Tim Delaney | Oct 10, 2010
Back in July, we discussed how much progress BP seemed to be making with safety (See “BP’s Safety Warning Signs,” July 11). From 2005 through 2009, the company went from the worst record among the majors to about the best in terms of injuries, deaths, and spills. But,...
by Tim Delaney | Sep 13, 2010
Credit and equity often seem like different dimensions in the analytical universe, but they often intersect in compelling ways. Take General Motors (GM) and its plan to issue equity for example. There’s a case to be made for GM’s having a lot of equity value. To make...
by Tim Delaney | Aug 8, 2010
When Tony Hayward took over as Group CEO of BP in May of 2007, he acknowledged BP’s past failings and promised to correct them. He continued plans to make $7 billion in safety improvements. He took personal charge of BP’s group operations risk committee. He expanded...
by Tim Delaney | Jul 11, 2010
It’s tragically obvious now that BP has deep problems with operational risk management, but it’s no challenge to identify risks after the fact. For credit analysts the challenge is evaluating risks before they occur and to do it with limited information. ...
by Tim Delaney | Jun 14, 2010
The last time we looked, Hovnanian Enterprises was trying for lower financial leverage. We saw signs of progress along those lines, but we were concerned about the company’s financial flexibility. Let’s see if they made any progress in the last six months. Using cash...
by Ron Carleton | May 26, 2010
For the 7th time in 10 years, Wal-Mart is #1 on the Fortune 500 list (in the other 3 years, it was #2). The company is the largest private employer in the U.S. and accounts for 8% of total retail sales in the US. As big box retailers (including Wal-Mart, Target, The...
by Ron Carleton | May 19, 2010
The problems of the last leveraged buyout bubble are still with us. From 2004 through 2007, the U.S. experienced an unprecedented level of LBO activity. That all ended with the collapse of the debt markets in the summer of 2007 (and the disappearance of the debt...
