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The final UK Services PMI for June will be released in ten minutes.Japanese Senator Munetoshi Kamiya: Japan must first focus on increasing demand, which is what we have been asking the Bank of Japan to consider.July 3, traders are paying close attention to the upcoming US non-farm payrolls data for June. Economists generally expect 110,000 new non-farm payrolls, up from 139,000 in the previous month, and the unemployment rate may rise slightly from 4.2% to 4.3%. Jay Hatfield, CEO of Infrastructure Capital Advisors, pointed out that if the non-farm data is lower than expected, funds may shift from high-valuation technology stocks to value stocks. He said, "There may be uncertainty in the market. In the game between the decline of technology stocks and the rise of value stocks, since technology stocks account for 40% of the market value, it often leads to an overall decline in the market." But he added that weak data may also prompt the Federal Reserve to cut interest rates in July ahead of schedule.Moodys Ratings said on July 3 that tariffs and global trade uncertainty have increased credit risks in the Asia-Pacific region, and the company downgraded the regions sovereign credit outlook from stable to negative. Tariffs have posed long-term credit risks to some Asia-Pacific economies, undermining their attractiveness and curbing foreign investment. Fiscal spending is likely to increase to help economic growth and slow or stop fiscal consolidation. Falling revenues - especially for trade-intensive countries - will further limit flexibility, while wider deficits will increase borrowing needs. If trade negotiations result in a significant reduction in tariffs, Moodys will adjust the outlook back to stable. Conversely, escalating tariffs, a sharp increase in interest rate spreads or continued geopolitical conflicts will worsen the situation.July 3, Google Vice President Sapna Chadha said Southeast Asia is becoming a global artificial intelligence center. In the "polarized world" of geopolitics, the region is developing a framework around artificial intelligence ethics and coming together to discuss to drive innovation faster than other parts of the world. Chadha said that the company does not take sides in the region, which makes it a unique opportunity space. According to Googles research, about 70% of companies in the region can see a return on their artificial intelligence investment in less than 6 months, and the speed of innovation is one of the reasons why Google has invested heavily in infrastructure in the region.

The awful chapter of Citrix debt is closed by banks with a $700 million loss

Aria Thomas

Sep 22, 2022 11:00

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According to a source with knowledge of the issue, Wall Street banks finalized the sale of $8.55 billion in loans and bonds funding the leveraged buyout of business software giant Citrix Systems Inc (NASDAQ:CTXS) by suffering a $700 million loss.


The process emerged as a major test of banks' ability to offload junk-rated debt from their books, a process necessary for them to recycle capital and comply with financial health requirements.


The effective completion of the syndication came at a large discount to the levels at which the banks underwrote the debt. A second person said that one of Citrix's acquirers, hedge fund Elliott Management, helped by purchasing $1 billion in bonds.


Private equity firms, who rely on junk-rated loans to increase returns on company acquisitions, have seen banks move back in the wake of Citrix and other deals that have strained their balance sheets. According to bankers, this is not expected to change in the foreseeable future, since rising interest rates and market volatility fueled by Russia's war in Ukraine have increased the probability that agreements they underwrite will appear mispriced within weeks.


According to sources, banks led by Bank of America Corp (NYSE:BAC), Credit Suisse Group AG, and Goldman Sachs Group Inc (NYSE:GS) sold a $4.55 billion Citrix loan to investors at a discount of 91 cents on the dollar and an annual interest rate 450 basis points above their benchmark.


According to the sources, a $4 billion, three-year Citrix bond was also issued for 83.6 cents on the dollar, delivering a higher than anticipated yield of 10%. Reuters reported last week that the loans in Citrix's capital structure were in strong demand, although the subordinated bonds were less popular.


Bank of America and Credit Suisse declined to comment. Goldman Sachs and Elliott did not respond to requests for comment immediately.


More debt syndication woes for banks are forthcoming. A $2 billion loan backing Apollo Global Management (NYSE:APO) Inc's acquisition of telecommunications assets from Lumen Technologies is provided at a discount of 92 cents on the dollar, while a $1.87 billion bond for the same transaction is issued at an exorbitant 10% interest rate.

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