EUR/USD 1.16141
-0.097%
Gold 4434.77
-0.854%
Oil 89.430
-0.234%
USD/JPY 156.234
0.280%
GBP/USD 1.35183
-0.046%
GBP/JPY 211.206
0.242%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
Fitch: The rating upgrade reflects the strengthening of Portugals public finances, including the expected downward trend in government debt.Barclays: Oil outflows from the Middle East are higher than in the early stages of the conflict, but the market remains in a state of shortage, and the inventory buffer is now greatly reduced.According to Al Arabiya TV: Lebanese official data shows that Israeli airstrikes on southern Lebanon tonight have killed three people.On September 5th, stronger-than-expected US August jobs data triggered renewed bets on a possible Federal Reserve rate hike, but Wall Street risk assets did not show significant panic. Data showed increased resilience in the job market, leading traders to raise their expectations for a rate hike at the Feds September 16th meeting. US Treasuries experienced a sell-off, the dollar strengthened, and the S&P 500 fell on Friday but still recorded a weekly gain. Unlike previous rate hikes that often triggered capital outflows, this round of bond market adjustments has not yet spread to other risk assets. Credit spreads remain low, limiting pressure on corporate bonds and stock index markets. JPMorgan Chase stated that US Treasury liquidity has deteriorated significantly, but corporate bond ETFs and stock index futures markets have not yet experienced similar tension. Market resilience mainly stems from economic growth and corporate profits, especially as AI investment continues to drive large-scale capital expenditures by technology companies. Analysts point out that the market is currently more focused on whether yields will rise rapidly than on the jobs data itself. The market focus will shift to inflation data and whether the Fed will reconsider its rate hike path due to inflationary pressures. If yields rise further rapidly, it could force investors to reduce their risk exposure.US officials: The White House has no plans to hold an artificial intelligence meeting in mid-September.

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

Aria Thomas

Sep 22, 2022 11:00

3.png


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.

Suggestion