Tema: PPCC-Pisitófilos Creditófagos-Otoño 2022

[Derby]

Living in thin air...

https://www.bnnbloomberg.ca/mortgage-fund-in-canada-halts-payouts-amid-liquidity-crunch-1.1844092

Mortgage fund in Canada halts payouts amid liquidity crunch

Canadian real estate lender Romspen Investment Corp. has halted redemptions on its largest fund after a number of borrowers stopped making payments.

The Toronto-based firm will “temporarily defer payment” of redemptions until it’s clearer when borrowers will repay the loans and the fund can get cash from asset sales, according to a letter to investors dated Nov. 8. “Loan payoff activity remains suppressed.”

The move underscores the growing stress in the nation’s real estate market as a sharp rise in interest rates changes the economics of commercial projects and disrupts the housing market.

The firm, which is backed by New York-based TIG Advisors, is an established specialty manager of private mortgage funds, providing pre-development, construction and other loans for commercial and residential projects. It’s among the largest private players in that business in Canada.

The Romspen Mortgage Investment Fund had $2.8 billion (US$2.1 billion) invested in 134 mortgages at the end of June, about evenly divided between Canadian and US projects. Managers are now working to accelerate the sale of some assets to free up cash.



“Please be assured that we are working diligently to expedite a number of these portfolio transactions and remain confident in the underlying value of the fund’s assets,” Romspen said in the letter, which was signed by eight trustees.

“In many cases, however, such transactions involve coordinating the interests of a number of independent third parties, who are also affected by the present market uncertainties.”

Private lending funds gained popularity among investors hungry for yield during the era of rock-bottom interest rates. But mortgage finance vehicles have had a difficult year as rates increase. The rise in borrowing costs is also hurting developers as they seek capital to build new projects or refinance existing ones.

Romspen has cut back on its dealmaking in Canada as a result, Managing Partner Derek Jenkin told Bloomberg last month.

'CHALLENGING PHASE'

To preserve liquidity, the firm created a “runoff pool” for investors who want to get their money out as assets are sold. But that didn’t dampen redemption requests, according to the letter, which said the firm may take further measures if conditions worsen.

Romspen told investors it has still outperformed other asset classes this year, with an 8.2 per cent trailing one-year return as of June 30, according to its website. “We are confident that we will manage through this challenging phase and achieve reasonable long-term results for investors, much as we have in past periods of adversity over Romspen’s 50-plus year history,” the letter said.

When developers can’t catch up on their payments, Romspen forecloses and deploys teams to continue work on projects before selling them. Because it lends at 65 per cent loan-to-value, “the market would have to move by about 30 per cent for us to see any material loss in our book,” Jenkin said last month.

[Derby]

Donde dije digo...cómo debe ser la cosa

https://www.wsj.com/articles/binance-is-said-to-be-likely-to-walk-away-from-deal-to-buy-ftx-11668020963

Binance Says It Will Walk Away From Deal to Buy FTX

Crypto exchange’s decision comes as it conducts due diligence on FTX

Crypto exchange Binance said that it would walk away from an initial offer to acquire its competitor FTX after a review of the company’s structure and books, the crypto exchange said in a statement.

“Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance said.

https://www.ft.com/content/1174836b-9a47-44fa-b454-7943c624b04c

BREAKING: crypto

Binance bails on FTX and everything pukes

It’s over, the “it” being Sam Bankman-Fried’s FTX exchange. A statement lands from its nemesis turned savour turned nemesis:

Binance Statement Regarding Potential Acquisition of FTX

As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com. 

In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.

Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market. 

As regulatory frameworks are developed and as the industry continues to evolve toward greater decentralization, the ecosystem will grow stronger.

Bitcoin’s down 20 per cent on a 24 hour view at pixel in response, with ethereum off 23 per cent and the FTX native token FTT down 50 per cent.

[Saturio]

Y todo esto por poner los tipos al 3,75%

[Cadavre Exquis]

https://cincodias.elpais.com/cincodias/2022/11/08/fortunas/1667925554_618820.html

https://www.pressreader.com/spain/expansion-nacional/20221109/page/29/textview

Calviño: "Hemos alcanzado velocidad de crucero" con los fondos europeos

Saludos.

[Cadavre Exquis]

https://cincodias.elpais.com/cincodias/2022/11/08/companias/1667914659_821014.html

https://www.expansion.com/empresas/banca/2022/11/09/636af7fde5fdea300a8b4621.html

Saludos.

[sudden and sharp]

Y todo esto por poner los tipos al 3,75%

... y después de 2008, y de aquella nochebuena. 

[Cadavre Exquis]

https://cincodias.elpais.com/cincodias/2022/11/08/opinion/1667926269_745613.html

Saludos.

[Cadavre Exquis]

https://cincodias.elpais.com/cincodias/2022/11/08/companias/1667931455_078203.html

Saludos.

[Cadavre Exquis]

https://cincodias.elpais.com/cincodias/2022/11/08/companias/1667915636_861935.html

Saludos.

[Derby]

https://www.bloomberg.com/news/articles/2022-11-09/china-property-crisis-puts-1-6-trillion-of-lgfv-debt-at-risk

China Property Crisis Imperils $1.6 Trillion of Local State Debt

*Cities, provinces buying land, projects from troubled builders
*Credit risks could grow for such white knights, Moody’s says

China’s deepening property crisis is piling pressure on a $1.6 trillion corner of the country’s onshore bond market, as cities and local administrations step in as white knights to bail out troubled developers in a state-backed bid to aid the sector.

After replacing builders as the biggest buyers of land earlier this year, the nation’s so-called local government financing vehicles, or LGFVs, have now become the main purchasers of half-finished projects of defaulters including China Evergrande Group. Their increasing involvement in real estate has analysts raising red flags.

Moody’s Investors Service says that could weigh on the credit profile of these state funding agencies. While no LGFV has defaulted in the current cycle, Bloomberg Economics isn’t ruling out one ahead, as its data show average credit spreads on some of the worst-performing LGFV local bonds have almost doubled to nearly 10 percentage points since mid-January.

Such direct rescue efforts and tighter ties to property are raising new concerns over the health of the weakest links in China’s state sector, as a record housing slump and surging Covid-induced expenditures squeeze the already strained finances of companies reliant on government funding. A potential default could cause another convulsion in a market, where LGFVs’ 11.6 trillion yuan ($1.6 trillion) of notes account for about a third of China’s local corporate bonds.

The government needs to rely on LGFVs during an economic downturn, but “once the policy wind turns, we don’t rule out the possibility of LGFV public bond defaults,” said Zerlina Zeng, senior credit analyst at CreditSights in Singapore. “China will likely refocus on cleaning up local government debt” when growth picks up, she said, adding default risks aren’t elevated over the next six months.

David Qu and Chang Shu at Bloomberg Economics estimate total LGFV debt, including bank borrowings, to be as much as 60 trillion yuan, or about half of China’s GDP. Defaults would have major consequences, they said.

LGFVs rose to prominence in the wake of the global financial crisis, when they played a crucial role in funding roads, bridges and subways as the central government stepped up stimulus to keep the world’s No. 2 economy humming.

The phenomenon of LGFVs buying pending projects is especially acute in the southern Guangdong province, a trading hub with relatively stronger fiscal health.

Guangzhou City Construction Investment Group, backed by the city of Guangzhou, in October purchased the plot meant for a 80,000-seat football stadium after Evergrande returned it. The property giant, which is at the center of the credit crunch that’s rippled through the sector, has a significant number of projects in the city. 

With the deal, the LGFV is now responsible for finishing the sports complex, one Evergrande estimated to cost 12 billion yuan but in which it had only invested 2 billion yuan. That means extra spending on top of the 57 billion yuan of real estate projects as of March. China Lianhe Credit Rating Co. warned that the expenditure needs to be borne by the LGFV.

(...) The types of LGFVs helping out are expanding to entities affiliated to lower levels of governments as well. In adjacent Shenzhen city, a district LGFV extended help to four key projects Evergrande owns in the jurisdiction, according to the developer. While the vehicle doesn’t raise funds in the open market, bond sales by its largest shareholder Shenzhen Talents Housing Group Co. picked up pace this year, according to Bloomberg-compiled data.

Little experience with construction comes with another set of risks for LGFVs. Sales could end up being lackluster if quality standards aren’t met, denting cash flows, Zhou Yue, a bond analyst at Zhongtai Securities, wrote in a note.

Before turning into white knights, LGFVs were already lending to distressed builders. Days before Shanghai-based Greenland Holdings Corp. repaid a dollar bond in August, its LGFV shareholder Shanghai Chengtou lent 1.5 billion yuan to the company.

For now, taking on the crucial role of residential project construction reinforces investor belief that LGFVs have implicit guarantees from local governments -- which have helped LGFVs avoid defaults on public bonds, according to Tianfeng Securities Co. analysts led by Sun Binbin.

As long as more developers slip into distress with China’s longest-ever home-market slump showing no signs of abating, there will be more pressure on LGFVs to help, said Ivan Chung, an analyst at Moody’s. Cities with strained finances will feel the pinch, he added.

“LGFVs in economically weaker cities already carry higher credit risks,” Chung said. “If halted projects there have big cash holes to fill, it may bring further risks to the LGFVs overseeing their deliveries.”

[Cadavre Exquis]

https://cincodias.elpais.com/cincodias/2022/11/08/economia/1667931197_469117.html

Saludos.

[Cadavre Exquis]

https://www.expansion.com/empresas/banca/2022/11/09/636acf79e5fdeaed498b4619.html

Saludos.

[Cadavre Exquis]

https://www.expansion.com/economia/2022/11/09/636ab8e0468aebc5288b468d.html

Saludos.

[Cadavre Exquis]

https://www.pressreader.com/spain/expansion-nacional/20221109/page/31/textview

El BCE defiende que un Presupuest­o común reduciría el riesgo de la deuda

Saludos.

[Cadavre Exquis]

https://www.pressreader.com/spain/expansion-nacional/20221109/page/25/textview

COP27: la brecha de las energías renovables, oportunida­d para España

https://www.expansion.com/economia-sostenible/2022/11/09/636abfc5468aeb73758b45a7.html

https://www.expansion.com/opinion/2022/11/09/636a857e468aeb64448b4641.html

Saludos.