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April 24, 2009

 Past Issues

Cover Story

From Century City To Baghdad

Saddam Hussein has not been in power since 2003, but Iraq still struggles with the massive debt it incurred during his rule. Helping get rid of billions of dollars of that debt is a middle-market investment bank you may never have heard of -- one that actually got its start valuing mom-and-pop businesses for estate planning. Founded four decades ago, Houlihan, Lokey, Howard & Zukin Inc. still values businesses, but these days they are more likely to be owned by private equity shops. The firm has branched out into M&A banking and an extensive restructuring practice that, along with a fairness opinion and valuation business, have taken it beyond the U.S.

Capital Markets

Bondholders Get Serious

The private placement market is one that often flies below the radar. But with activity starting to pick up, IDD sister publication Private Placement Letter recently sat down with a veteran of the industry, Loeb & Loeb partner Elizabeth Majers, to discuss the role of borrower pre-designated counsel (PDC) in private placement transactions, and the increased use of independent lender counsel in modification or distressed scenarios, among other things.

Editorial

Show Them The Money!

Allow me to preface this note by saying, with some pride, that hitherto I had never heard of something called Bettyconfidential.com. Probably won't ever speak of it again after this, either, which is a shame because it (she?) bills itself as 'Your Best Friend. Only Better.' (Apparently Betty hasn't met Twitter, my personal BFF, but that's for another day.)

Fixed Income

QZABs, QSCBs Attract Attention

Although qualified zone academy bonds have garnered few headlines, market participants who have worked with the tax-credit bond program say it has been successful, and the billions of dollars in QZABs and qualified school construction bonds authorized by the $787 billion stimulus are garnering significant interest from issuers. But the new taxable tax-credit bond programs still have to clear a number of hurdles as issuers and investors alike familiarize themselves with the tools.

Weekly Yields Fall as BABs Flow Into Primary Market

The Bond Buyer's weekly yield indexes declined this week on the back of a surge of Build America Bonds in the primary market, including more than $5 billion of the new securities from California. The rally, which lasted nearly the entire week, was halted yesterday when tax-exempt yields were unchanged to slightly weaker.

California Eyes Feds

After selling a year's worth of general obligation bonds in a month, California officials now face their next market challenge -- a record-sized cash-flow borrowing for a state government that is being hammered by the recession.

Munis Flat to Lower; MTA BABs Price

The municipal market was unchanged to slightly weaker yesterday, as New York's Metropolitan Transportation Authority priced $750 million of Build America Bonds, following Wednesday's mammoth California BAB deal.

Advocates Tout Rail Financing Program

Transportation stakeholders are urging increased support from the Department of Transportation for state and local governments and railroads to take advantage of a rail financing program that provides low-interest federal loans and credit for infrastructure projects and debt refinancing.

Indiana Files Chrysler Fraud Claim

Indiana has filed a securities fraud complaint against Chrysler LLC related to the issuance of $14 million of tax-exempt revenue bonds for a proposed transmission plant whose financing has since collapsed. The $530 million plant, located in Tipton County was a joint venture between Chrysler and German transmission maker Getrag Transmission LLC.

Investment Banking

'Back To The '70s' For Street Pay

The opportunity to create wealth and earn really big numbers at large institutions likely won't return for some time.

Looking Ahead

A calendar of events taking place in the capital markets next week.

Quoted

Notable quotes from capital markets honchos during the past week.

Middle Market

Mergers Slump In Mid-Market

The U.S. middle-market M&A arena, once thought to be more resilient in the face of downturns than its large-cap counterpart, is struggling mightily.

Personnel File

Rothschild Snags Nortel Vet

Financial advisory firm Rothschild has tapped attorney David Drinkwater as chairman and head of its Canadian operations. Drinkwater has served in various senior executive corporate roles in Canada, most recently as chief financial officer of networking company Nortel.

Private Equity

Code Red For Portfolio Firms?

With the credit freeze hardly thawed, the recession firmly in place and corporate defaults blooming like springtime flowers, it is hardly a secret that most private-equity firms are spending most of their time on portfolio companies, rather than striking new deals.

PE Fundraising Comes Under Fire

When controversy erupted this past week over how private equity firms Carlyle Group and Quadrangle Group had raised money for funds, it thrust one usually quiet corner of the leveraged buyout business into the spotlight: placement agents.

Securities in Registration

Securities In Registration

The following is a list of planned new offerings that have been registered with the SEC in the past month, but have not yet come to market. Deals that have been withdrawn are excluded.