Whoodathunkit. The fashion company actually has debt... And not just any debt, but rapidly maturing one at that. BCBG has a $20 million loan payment in March which is very unlikely it will be able to make. Things are so bad even S&P came out of its rat hole and downgraded the company to CCC+"We are very concerned with BCBG's liquidity position. The company had $20 million available in cash and its revolving credit line in early January, however it also has a $20 million loan payment due in March."
"Declining sales at Max Rave, which BCBG acquired in 2006, is also likely to push the subsidiary to break minimum earnings before interest, taxes, depreciation and amortization (EBITDA) terms in its loan agreements."
"We do not expect Max Rave to meet its minimum EBITDA covenant. This does not
constitute an immediate event of default but could prove distracting for management. The 2006 acquisition of the Max Rave business added to the company's business risk and it continues to underperform because of negative sales trends."
Foamex will use chapter 11 to implement its balance sheet restructuring initiatives, which are designed to restore the Company’s business to long-term financial health, while continuing to operate in the normal course of business. Foamex anticipates that its day-to-day operations will continue as usual without interruption during the chapter 11 process, which is expected to last approximately six months.We have heard that before.
The dominatrix of doom who singlehandedly brought down Citi (with a little help from Vikram), has decided to call it quits at Oppenheimer and is starting Meredith Whitney Advisory, an "Investment Bank for the New Age". No news yet if husband John Layfield will be Head Of Compliance, or if Dick Bove will quit Rochdale after one day of employment, to start the under the dominatrix. However, one may ask, now that there are no financial firms left anymore, who will Meredith focus on? Spreading doom and gloom has lost its novelty so the business model may have to be adjusted.
For any still employed bankers, who aren't currently experiencing margin calls from their employer, and who plan on making a solid 20% on the bonanza that TBT will unlikely generate by the end of the year, here is the deal of a lifetime. For a paltry $60 million, you can buy Playboy Enterprises, which in a conference call today announced it is willing to sell itself for the right price... or the wrong price... or any price. With the stock currently trading at $1.60, the company's $60 million market cap might seem like a bargain when considering the fringe benefits. (of course you need to assume $90 million of net debt but with the HY market on fire this should be easily refinanceable. Just hire Jefferies to do it)
In practice, the trading dynamics are more complicated but fall along these lines. Dealers are usually buyers of mezzanine tranche protection and hedge by selling single-name CDS. As spreads widen, mezz-tranches become more equity like and mezz tranche hedge-ratios vs single-name CDS tend to decrease as spreads widen. This implies the size of dealers' single name hedges relative to mezz tranches might end up being too great as spreads increase and as a result dealers will need to decrease hedges by buying single-name protection. And vice versa when spreads tighten.
Sphere: Related Content
"I call on those who generated losses to live up to their responsibility. We are counting on their goodwill."Banker goodwill? Turns out bankers at DK were promised bonuses, and the concern is that they may now sue to get what is contractually theirs. More from Strutz:
“I’m optimistic that others will follow the good example”of investment bankers that have agreed to forgo bonuses, Strutz said. The bank “regrets” it won’t pay bonuses to employees at profitable divisions such as the retail and corporate banking units, he said, adding that it is “hard to explain” this to workers in those units.Dresdner hopes bankers won't leave because, as Strutz puts it, “We want employees that aren’t only interested in material things. Bankers who only look at their paycheck aren’t usually very loyal." Let's not forget the free coffee and the free German lessons. Just goes to show how deluded the administration can be. The only reason employees won't go anywhere is because they have nowhere to go. Sphere: Related Content
Another key component: a new program aimed at helping homeowners said to be "under water" — with dwellings whose value have sunk below the principal still owing on their mortgages. Such mortgages have traditionally been almost impossible to refinance. But the White House said its program will help 4 to 5 million families do just that.
Sphere: Related Content
