by Tim Delaney | May 23, 2018
Under pressure from rising interest rates, soaring inflation, and growing government debt, the Argentine peso has crashed in the last few weeks. The government is asking the International Monetary Fund for a credit facility of up to $30 billion to help cover imports...
by Tim Delaney | Dec 31, 2017
Modern history is littered with the corpses of collapsed banks. From the Great Depression in the 1930s to the financial crisis of 2008 banks have gone down, taking depositors’, lenders’, and shareholders’ funds with them as they fell. All too often they’ve taken the...
by Tim Delaney | Sep 27, 2017
We’ve posted several times before about the early warning signs of financial distress, most notably about Borders and about Borders again. With the recent bankruptcy of Toys R Us, this seems like a good time to return to the subject. Spotting trouble before it...
by Tim Delaney | Aug 15, 2017
Liquidity matters Liquidity problems lead to more bankruptcies than any other cause. For such an important issue, it’s surprising how much confusion there is defining liquidity and measuring it. In this post we’ll try to add some clarity to the discussion about what...
by Tim Delaney | Feb 10, 2017
Last summer Hanjin Shipping failed. It was only the sixth largest container shipping company in the world, but its bankruptcy may be the first of many in an industry caught in very heavy weather of its own making. ...
by Tim Delaney | Jun 5, 2016
The disease, not the cure In our last post, we talked about the tangle Valeant got into with its banks over financial reporting delays. But the company’s problems didn’t end with the banks, and the banks weren’t the only creditors affected. On April 12, Centerbridge...
by Tim Delaney | May 8, 2016
Valeant in trouble Valeant Pharmaceuticals has been a bit of a nightmare for customers, shareholders, and debt holders lately. Its strategy of acquiring established drugs, paying with debt, and doubling prices to cover the costs has provoked a furious response from...
by Tim Delaney | Feb 29, 2016
Citigroup analysts are calling the effect of falling oil prices on global financial markets “oilmegaddon.” We think the term works well to describe looming cash flow, dividend, and credit problems at major oil companies too. After peaking at $60.07 in June of 2015,...
by fintrain | Feb 16, 2016
A unitranche loan, as the name implies, is one tranche of debt that can replace the traditional two tiered (i.e. first-lien/second-lien, senior/subordinated or secured/unsecured) debt structure for highly leveraged companies. For those unfamiliar with this...
by Tim Delaney | Jan 21, 2016
“The only function of economic forecasting is to make astrology look respectable,” John Kenneth Galbraith. A recent article in The Economist talks about the difficulties even the world’s best economists have forecasting economic growth. Approaches based on theory or...
by Tim Delaney | Oct 1, 2015
Toshiba Corporation has been caught cooking the books, overstating pre-tax profits by ¥1.5 billion over the last seven years. The scandal began with an inquiry by Japan’s market regulator, the Securities and Exchange Surveillance Commission, in February. Toshiba...
by Tim Delaney | Sep 22, 2015
Dave Lewis has been Tesco’s CEO since September 2014. As we said in an earlier post, his challenge is to counter the growing threat from discounters in the UK like Aldi and Lidl by holding on to a core set of customers who prefer Tesco’s variety and convenience over...
by Tim Delaney | Sep 14, 2015
Tesco just agreed to sell its South Korean operations for £4 billion, taking a loss of about £150 million on the sale. The deal will reduce borrowings by £4.2 billion over the next 18 months. That’s a step in the right direction, but it’s not enough. Tesco may also...
by Tim Delaney | Jun 7, 2015
Takata Corporation is a Japanese maker of airbags and other automotive safety devices that has had a bad accident. It is recalling 53 million cars to replace defective airbag inflators that have caused six deaths and over 100 injuries around the world. The cost will...
by Tim Delaney | Apr 26, 2015
A few days ago Tesco announced its worst full-year loss ever and one that ranks among the biggest in the history of British business — £6.4 billion. The company took a cart load of special charges to account for three years of declining sales, profits, and cash flows...
by Tim Delaney | Feb 22, 2015
Credit risk at Tesco Tesco disclosed details of its turnaround plan on January 8. The company was clear about its business problem — loss of share and profitability in the UK. And it was specific about the steps it is taking to tackle that problem — price cuts, store...
by Tim Delaney | Feb 2, 2015
On January 8 Tesco announced more details of its plan to improve its competitive position in the UK, revive its profitability, and bolster its finances. It’s going to cut prices on popular brands, trim £250 million in operating costs, limit capital spending, stop the...
by Tim Delaney | Jan 24, 2015
Last December 28 AirAsia Flight 8501 left Surabaya in Indonesia bound for Singapore with 162 passengers and crew on board. An hour from takeoff the plane disappeared from radar, and five days later searchers found the wreck in the Java Sea. There were no survivors....
by Tim Delaney | Jan 5, 2015
Tesco, Britain’s largest grocer, has been having a hard time lately. Last September it had to admit to overstating its net profits by £250 million. Then in October it announced a 4.4% drop in mid-year sales, a 91.9% drop in net profit, and an increase in the profit...
by fintrain | Apr 10, 2014
Private Equity Funds often target companies with strong brand names in mature industries. These companies often have strong, stable cash flows, which can be used to repay the acquisition debt. Two transactions, both announced in February 2013, demonstrate this...
