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Where the next financial crisis could come from

Where the next financial crisis could come from

Following 21 a long time of creating my weekly column for the FT, I have decided to go on. When I commenced in February 2001, Enron’s “smartest fellas in the room” ended up on their way to the engineering the largest crash of the young century. Now we’re headed into nonetheless a further economic downturn and I have the perception that the excesses of our time can only be settled with an additional remarkable institutional failure.

Not the big banks this time, at least not the significant American financial institutions. My guess is that we’ll see the unexpected failure of a private fairness company, sick with concealed leverage, and with no central bank inclined to choose sole obligation for the mess.

When I labored for an expenditure financial institution in the early 80s, a person of the associates advised me to “find a firm which is value a lot more lifeless than alive”. There were a lot of zombie American firms at the time, aged names that had expanded significantly outside of their original industrial competence. They were being dealt with like medieval fiefdoms by the main executive, who had tiny cause to concern the Securities and Trade Commission or shareholders. Not incredibly, most had been globally uncompetitive and had small aim and poor interior reporting.

And their shares were being inexpensive. You come across the weak relative who just wished the revenue now so he could start his croquet profession in Palm Seaside, stop by a compliant lender (we had them on tap) and near the offer.

Within a year or two we would set up to shut down or market off the irrelevant bits, offer the chairman’s non-public golf program, and capture a current market updraft to float our newly Reagan-ised outfit, zippy new brand and all. Yet another deal trophy for the business office.

We weren’t very so arrogant as to say we had been performing God’s function — we weren’t Goldman Sachs, following all. But straight-operate “shareholder value” was the way Corporate The united states recovered from the wasteful and bureaucratised mess it experienced grow to be by the 1970s. We were assisted by financial restoration and fascination fees that declined for a long time.

It was a superior small business, operate out of a handful of workplaces in a minimal-expense warren in Rockefeller Center. We never experienced the illusion that we and a handful of other personal equity firms could make our personal weather conditions. And we ended up enthusiastic by the capital gains, not the charges.

Now, nevertheless, the global private equity businesses are in it for the fees. They are asset-collecting, not slicing forms and rationalising products traces. The private fairness companies have designed bureaucracies of their very own and the founders are no for a longer time hungry outsiders, but Palm Seaside croquet gamers. They have develop into a smaller group of self-working oligarchs.

The community sees and resents this, significantly as their house lease or dwelling charges enhance to unaffordable ranges.

A relevant group are the asset management CEOs. I was seeing just one of them do “stakeholder presentations” over a 6-thirty day period period. He manufactured himself out to be additional of a “High Priest of World Governance”, rather of another person who hired a pair of excellent functions persons and an superb lobbying team.

Perfectly, if Pride goeth ahead of a Fall, a lot of in private equity will have a extremely extended drop indeed. If they actually are the “Universal Mind”, then they really should run for business office. Settle down in a person of their homes and go out to the streets and malls to communicate with their people. If that is beneath them, they can shut up.

Again when Citigroup was in problems in March and April 2009, I was in favour of an orderly resolution. Did not come about. Post the economic disaster, we did not liquidate more than enough of our leverage and we have compensated for it with small advancement.

A recession is a time to clear away surplus borrowing and the unaccountable about-mighty. These times, individuals would be among the the personal equity companies and the giant asset managers. We really do not need oligarchs in this article.

I am grateful to my viewers and have extremely considerably appreciated your feelings and reviews. I may perhaps lead on situation to the FT. And if you want to find out what I will be up to in the potential, fall me a line.

john@johndizard.com

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US stocks rally at the end of chaotic week for markets | Financial Markets News

US stocks rally at the end of chaotic week for markets | Financial Markets News
Bloomberg logo

Regardless of the powerful gains on Friday, several traders aren’t nonetheless persuaded that equities have reached a bottom.

By Rita NazarethBloomberg

Posted On 13 May possibly 2022

Shares rallied at the conclusion of a chaotic 7 days in economical marketplaces, with a minimal support from Federal Reserve Chair Jerome Powell’s reassurance that greater charge hikes would be off the table for now even after the incredibly hot inflation readings of the earlier few times.

For a current market plagued by fears that far more aggressive monetary tightening could suggestion the economy into a recession, Powell’s remarks ended up calming frayed nerves and sparking a rebound in crushed-down hazard property. Regardless of the potent gains on Friday, lots of traders aren’t but confident that equities have reached a bottom immediately after a selloff that shaved $10 trillion from US stock values in 18 weeks. In its place, they say buyers ought to nevertheless brace for volatility as the Fed’s ability to combat selling price pressures with no creating a tough landing may perhaps rely on factors outside the central bank’s manage.

After sinking almost 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from a record and flirting with a bear industry, the S&P 500 saw a wide-primarily based rally Friday. It nonetheless posted a sixth straight week of declines — the longest dropping streak because June 2011. The Nasdaq 100 outperformed amid a rally in giants like Apple Inc., Microsoft Corp. and Amazon.com Inc. Meanwhile, Elon Musk prompted chaos around his takeover provide for Twitter Inc., initially declaring his bid was “temporarily on hold” and then maintaining he’s “still committed” to the deal — sending the social-media giant into a tailspin. Tesla Inc. jumped. Treasuries fell with the dollar.

Above the program of yet another tumultuous 7 days for economic markets, some prominent voices on Wall Road pondered on the outlook for stocks just after a impressive selloff. Peter Oppenheimer at Goldman Sachs Team Inc. explained on Tuesday that the rout had made buying alternatives, with headwinds this kind of as inflation and hawkish central banking companies presently priced in. Meantime, Morgan Stanley strategist Michael Wilson famous that equities had been however “not priced for this slowdown in advancement from present-day amounts.”

There are 5 telltale indicators that are applied to simply call a bottom in shares, which include spikes in the Cboe Volatility Index, puts considerably outnumbering calls and a dismal market sentiment, in accordance to Lindsey Bell, main marketplaces and cash strategist at Ally. When the VIX has stayed around 30, previous bear markets highlighted moves above 45. “A volatility climax is a signature of current market bottoms,” she mentioned.

Multiple Fibonacci levels are stacking up to provide support for the S&P 500

Anticipations of a complex bounce in the S&P 500 are making following the gauge’s relentless slide of the previous various weeks. Just one achievable zone of aid comes from a cluster of Fibonacci concentrations — which captures retracements of rallies in the American equity benchmark from 2020 Covid crash lows.

Equities, bonds, money and gold all observed outflows in the 7 days finished May well 11, Bank of America Corp. strategists led by Michael Hartnett wrote in a be aware, citing EPFR International knowledge. At $1.1 billion, technologies shares endured their most important withdrawals so significantly this year, 2nd only to financials, which lost $2.6 billion.

“The definition of true capitulation is investors marketing what they appreciate,” Hartnett explained, citing belongings like big tech, for illustration. “Fear and loathing counsel shares are susceptible to an imminent bear-industry rally, but we do not imagine greatest lows have been achieved.”

Some of the key moves in marketplaces:

Shares

  • The S&P 500 rose 2.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} as of 4 p.m. New York time
  • The Nasdaq 100 rose 3.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
  • The Dow Jones Industrial Ordinary rose 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
  • The MSCI Entire world index rose 2.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Currencies

  • The Bloomberg Greenback Spot Index fell .3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
  • The euro rose .2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $1.0401
  • The British pound rose .3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $1.2241
  • The Japanese yen fell .8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 129.32 per greenback

Bonds

  • The generate on 10-yr Treasuries innovative nine foundation factors to 2.93{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
  • Germany’s 10-calendar year yield superior 11 foundation factors to .95{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
  • Britain’s 10-calendar year generate innovative eight basis factors to 1.74{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

Commodities

  • West Texas Intermediate crude rose 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $110.36 a barrel
  • Gold futures fell .9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to $1,808.40 an ounce

–With support from Sunil Jagtiani, John Viljoen, Srinivasan Sivabalan, Vildana Hajric, Isabelle Lee and Akshay Chinchalkar.

 

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Asian Shares Bounce Back, Shrugging off Inflation Concerns | Business News

Asian Shares Bounce Back, Shrugging off Inflation Concerns | Business News

By ELAINE KURTENBACH, AP Enterprise Author

Asian shares bounced back again Friday from losses earlier in the 7 days, shrugging off info exhibiting U.S. wholesale selling prices soared 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in April from a calendar year before.

The regional rally followed a combined and muted near on Wall Avenue. Oil prices and U.S. futures also were being better.

Traders are puzzling above what’s subsequent with inflation and the U.S. central bank’s response to it. Trading has been volatile, with indexes prone to sharp swings as buyers test to protect their portfolios from the impact of the maximum inflation in a long time.

Federal Reserve Chair Jerome Powell, refreshing off successful Senate confirmation for a next 4-yr term, for the initial time Thursday acknowledged that superior inflation and weakness in other economies could thwart his attempts to avoid a economic downturn.

Political Cartoons

Powell had previously sought to portray the Fed’s efforts to tighten desire prices as constant with a so-referred to as “soft landing” for the economy.

Hong Kong’s Hold Seng index obtained 2.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 19,805.34 and the Nikkei 225 in Tokyo jumped 2.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 26,461.49. South Korea’s Kospi extra 1.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 2,594.95 and in Sydney, the S&P/ASX 200 state-of-the-art 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 7,046.50.

Central lender moves to battle back against cost will increase by elevating fascination charges are pulling some currencies reduced even though the greenback rises. The Japanese yen has weakened sharply in the previous several months, even though the Chinese yuan, whose benefit in opposition to other currencies is controlled, has also weakened.

The euro, furthermore, has weakened amid the fighting in Ukraine and uncertainty more than materials of Russian gasoline and oil . The euro was buying and selling at $1.0397 early Friday acquiring fallen down below the $1.0500 degree it had hovered in close proximity to for most of the 7 days.

“European hazard sentiment is finding mangled by news of Russia cutting gasoline source in retaliation for sanctions,” Stephen Innes of SPI Asset Administration claimed in a commentary.

“EUR (the euro) has crashed as a result of $1.05 and has even damaged down by $1.04 on the back again of the news. In truth, this certainly highlights the uncertainty as we advance with the menace and disruption of the Russian electrical power supply,” he reported.

The greenback was at 128.96 yen, up from 128.42. Against the Chinese yuan, it was at 6.79 per greenback, up from about 6.41 yuan a thirty day period back.

On Thursday, the S&P 500 closed .1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} lower, at 3,930.08, owning been down 1.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} before in the working day. The Dow Jones Industrial Ordinary fell .3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 31,730.30, when the Nasdaq rose .1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 11,370.96.

The indexes are on rate for sharp weekly declines, extending the market’s slump so considerably this yr. The benchmark S&P 500 is now down 17.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} this yr, though the Nasdaq is down 27.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Smaller corporation stocks held up much improved than the rest of the market. The Russell 2000 rose 1.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 1,739.38.

Yet another dire readout on inflation sparked a wave of promoting early Thursday, with technological know-how shares weighing down the S&P 500 index the most.

The Labor Department’s report that wholesale selling prices soared 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in April from a year previously adds to concerns that production expenditures are remaining handed on to customers, who could pull back on investing, crimping economic progress.

On Wednesday, the Labor Department’s report on customer prices came in hotter than Wall Road anticipated, exhibiting a even larger increase than expected in charges outside the house food and gasoline. That “core inflation” can be extra predictive of future traits.

Inflation has been worsened by Russia’s invasion of Ukraine and the conflict’s affect on climbing strength price ranges. China’s latest lockdowns amid fears about a COVID-19 resurgence have also worsened supply chain and manufacturing challenges at the center of climbing inflation.

The effects of increased selling prices for shoppers has been global. On Thursday, Britain said its economic climate grew at the slowest speed in a year in the course of the 1st quarter. That is elevating fears that the country may be headed for a recession.

In other investing, U.S. benchmark crude oil obtained $1.21 to $107.34 for every barrel in digital investing on the New York Mercantile Trade. It attained 42 cents to $106.13 for every barrel on Thursday.

Brent crude, the pricing basis for international buying and selling of crude, added $1.45 to $108.90 for each barrel.

Copyright 2022 The Connected Push. All rights reserved. This materials may well not be released, broadcast, rewritten or redistributed.

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National Bank Financial Analysts Cut Earnings Estimates for Northland Power Inc. (TSE:NPI)

National Bank Financial Analysts Cut Earnings Estimates for Northland Power Inc. (TSE:NPI)

Northland Electrical power Inc. (TSE:NPI – Get Rating) – Equities scientists at Nationwide Lender Fiscal reduced their Q2 2022 earnings estimates for Northland Electricity in a investigate report issued to consumers and buyers on Wednesday, Might 11th. Countrywide Lender Money analyst R. Merer now expects that the solar electricity supplier will article earnings per share of $.07 for the quarter, down from their previous estimate of $.13. National Lender Financial also issued estimates for Northland Power’s Q3 2022 earnings at $.07 EPS and Q4 2022 earnings at $.29 EPS.

A amount of other analysts have also not long ago weighed in on NPI. Credit history Suisse Team elevated their selling price target on Northland Power from C$50.00 to C$51.00 and gave the enterprise an “outperform” rating in a investigate observe on Wednesday, April 20th. Tudor Pickering & Holt set a C$43.00 focus on value on Northland Power and gave the inventory a “buy” ranking in a study take note on Thursday, February 10th. CIBC upped their price tag concentrate on on Northland Power from C$43.00 to C$44.00 and gave the corporation an “outperform” ranking in a report on Thursday, April 21st. CSFB lifted their price tag goal on shares of Northland Ability from C$50.00 to C$51.00 in a report on Wednesday, April 20th. Lastly, Scotiabank upped their focus on cost on shares of Northland Power from C$42.25 to C$46.25 in a report on Friday, April 8th. One particular analyst has rated the stock with a keep score and eleven have issued a obtain ranking to the stock. In accordance to knowledge from MarketBeat, the corporation presently has an normal rating of “Buy” and a consensus target rate of C$46.63.

Northland Energy stock opened at C$37.71 on Friday. The enterprise has a present ratio of 1.01, a quick ratio of .76 and a debt-to-equity ratio of 276.77. The firm has a fifty day straightforward going ordinary of C$40.57 and a 200-day straightforward moving ordinary of C$38.68. The inventory has a market place cap of C$8.56 billion and a P/E ratio of 46.16. Northland Electrical power has a 12-month very low of C$34.95 and a 12-thirty day period large of C$44.11.

Northland Power (TSE:NPI – Get Score) past issued its quarterly earnings results on Thursday, February 24th. The solar power supplier claimed C$.27 earnings for every share (EPS) for the quarter, lacking analysts’ consensus estimates of C$.31 by C($.04). The enterprise experienced profits of C$640.09 million for the quarter, in contrast to the consensus estimate of C$557.00 million.

The business enterprise also a short while ago introduced a regular dividend, which was compensated on Monday, April 18th. Stockholders of report on Monday, April 18th ended up issued a $.10 dividend. This represents a $1.20 dividend on an annualized foundation and a dividend produce of 3.18{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The ex-dividend date was Wednesday, March 30th. Northland Power’s payout ratio is at the moment 110.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Northland Power Firm Profile (Get Score)

Northland Power Inc, an independent electrical power producer, develops, builds, owns, and operates clean up and green electricity jobs in North America, Europe, Latin The usa, and Asia. The enterprise makes energy from renewable assets, these kinds of as wind, solar, or hydropower, as perfectly as clean up-burning purely natural gas and biomass for sale less than power order agreements and other profits arrangements.

See Also

Earnings History and Estimates for Northland Power (TSE:NPI)



Acquire News & Rankings for Northland Power Every day – Enter your e-mail address down below to receive a concise everyday summary of the most current news and analysts’ scores for Northland Energy and linked businesses with MarketBeat.com’s Free day by day e-mail e-newsletter.

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Stock futures rise as indexes aim to pare weekly losses

Stock futures rise as indexes aim to pare weekly losses

U.S. stocks gained Friday, shaking off some losses from earlier this week after concerns over persistent inflation and the resilience of the U.S. economy stirred up further volatility in recent sessions.

The S&P 500 rose by more than 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} intraday on Friday while the Nasdaq jumped by nearly 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The Dow added more than 350 points. The sharp move higher came after Federal Reserve Chair Jerome Powell reaffirmed in an interview with Marketplace public radio on Thursday that two more 50 basis point rate hikes were on the table for the next two Fed meetings, and that officials were not “actively considering” a more aggressive 75 basis point hike. His comments echoed what other Fed officials also said this week.

Just a day earlier, the S&P 500 had closed within striking distance of a bear market, typically defined as a close of at least 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from a recent record high. The index has declined by just over 18{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from its Jan. 3 record high through Thursday’s close, and it paced toward a weekly drop of 4.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} if levels hold through the end of Friday’s session.

The Dow Jones Industrial Average and Nasdaq Composite each also headed for weekly losses of 3.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 6.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, respectively, based on Thursday’s closing prices. Treasury yields have spiked and then pared gains back this week, with the benchmark 10-year Treasury yield hovering around 2.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Friday morning. Bitcoin prices recovered to trade above $30,000 after setting the lowest level since Dec. 2020, as a cratering in prices of Luna further reverberated across the broader cryptocurrency market.

The market gyrations this week coincided with two major inflation reports that came in hotter-than-expected. Thursday’s Producer Price Index showed an 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} year-over-year rise in wholesale prices last month, with this rate moderating only slightly from March’s all-time high rate of 11.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. And the Consumer Price Index released earlier this week showed a still-elevated 8.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annual increase in prices paid by consumers last month.

“Inflation has certainly become not only topical, but a real issue for the broader market, as the Fed has also increased its outlook for the number of [interest rate] hikes needed,” Sonali Pier, managing director and portfolio manager at Pimco, told Yahoo Finance Live on Thursday. “In terms of the effect of inflation, it’s really at this point, we’re going to see if the Fed raising rates, unwinding some of the balance sheet, can take off some of that inflation froth. Because it’s quite high, and it’s starting to impact companies — from their ability to push through from a pricing power perspective, as well as consumers, whether that’s at the gas pump or as a result of food increases and the like.”

Other strategists agreed that the Fed’s response to inflation — and how well the economy holds up as the Fed tightens financial conditions to address inflation — will be the key factor to watch going forward for the markets.

“We’re in an environment right now where inflation is high. The labor market is very tight. The Fed wants to bring inflation down. They want to sort of cool the overheating in the labor market, which means their bias is to tighten financial conditions and try and slow growth,” Jason Draho, UBS Head of Asset Allocation, said on Thursday. “In that environment, it’s not great for any sort of financial assets.”

“[Once] we get some sort of real break on inflation that people become much more comfortable that it’s moderating, and moderating [to] a sustainable level that the Fed could be more comfortable, and they don’t have to hike more aggressively … I think that’s the key catalyst,” Draho said. “Unfortunately, that might take a few more months before the data starts to clearly show inflation is definitely below its peak, and the Fed could achieve its target two years out.”

“So I think for the time being, it’s definitely a choppy market,” he added.

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10:15 a.m. ET: Consumer sentiment drops to lowest level since 2011: University of Michigan

Consumer sentiment fell to a more than decade low in early May, according to the University of Michigan, as concerns around inflation persisted.

The University of Michigan’s closely watched Surveys of Consumers index dropped to 59.1 in the preliminary May report, declining sharply from April’s reading of 65.2. The latest reading marked the lowest since 2011.

The sentiment declines “were broad based — for current economic conditions as well as consumer expectations, and visible across income, age, education, geography, and political affiliation—continuing the general downward trend in sentiment over the past year,” Joanne Hsu, director of the Surveys of Consumers, said in a press statement. “Consumers’ assessment of their current financial situation relative to a year ago is at its lowest reading since 2013, with 36{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of consumers attributing their negative assessment to inflation.”

Consumers’ inflation expectations remained elevated in May, with the survey showing one-year inflation expectations were unchanged at 5.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. However, some strategists suggested the drop in risk assets over the past several weeks played an even larger role in the drop in the headline index.

“I would argue that the drop was largely a function of the plunge in stock prices. We know U. Mich is more sensitive to markets,” Neil Dutta, head of economics at Renaissance Macro Research, wrote in an email Friday morning. “Inflation is an issue sure but the inflation expectations series were unchanged.”

—

9:33 a.m. ET: Stocks open higher

Here were the main moves in markets as of 9:33 a.m. ET:

  • S&P 500 (^GSPC): +43.33 (+1.10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,973.41

  • Dow (^DJI): +241.55 (+0.76{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,971.85

  • Nasdaq (^IXIC): +189.64 (+1.67{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,560.61

  • Crude (CL=F): +$3.05 (+2.87{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $109.18 a barrel

  • Gold (GC=F): -$24.60 (-1.35{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,800.00 per ounce

  • 10-year Treasury (^TNX): +9.8 bps to yield 2.9150{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

—

7:54 a.m. ET: Tesla shares jump in early trading after Musk says Twitter deal on pause

Shares of Tesla (TSLA) jumped by more than 6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} ahead of the opening bell Friday morning after CEO Elon Musk said his $44 billion plan to purchase Twitter (TWTR) was temporarily paused, pending more details over how much of Twitter’s use base comprises bot accounts.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of users,” Musk said in a Twitter post early Friday. He linked to a Reuters story suggesting Twitter filings showed fake or spam accounts made up fewer than 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the company’s monetizable daily active users.

In announcing his deal to buy Twitter over the past month, Musk has suggested targeting bot accounts and authenticating users was one of his priorities for the company post-deal.

Twitter shares sank 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in early trading to hover around $40 apiece.

—

7:45 a.m. ET Friday: Stock futures jump after Powell reaffirms 75 basis point rate hikes not currently under discussion

Here’s where markets were trading ahead of the opening bell Friday morning:

  • S&P 500 futures (ES=F): +46 points (+1.17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,973.25

  • Dow futures (YM=F): +262.00 points (+0.83{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,914.00

  • Nasdaq futures (NQ=F): +206.75 points (+1.73{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 12,154.00

  • Crude (CL=F): +$1.79 (+1.69{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $107.92 a barrel

  • Gold (GC=F): -$7.90 (-0.43{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,816.70 per ounce

  • 10-year Treasury (^TNX): +9.8 bps to yield 2.915{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

—

6:10 p.m. ET Thursday: Stocks open lower

Here’s where markets were trading Thursday evening:

  • S&P 500 futures (ES=F): -10 points (-0.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,917.25

  • Dow futures (YM=F): -73 points (-0.23{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,579.00

  • Nasdaq futures (NQ=F): -41 points (-0.34{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,906.25

NEW YORK, NEW YORK - MAY 12: Traders work on the floor of the New York Stock Exchange (NYSE) on May 12, 2022 in New York City. The Dow Jones Industrial Average fell in morning trading as investors continue to worry about inflation and other global issues. (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – MAY 12: Traders work on the floor of the New York Stock Exchange (NYSE) on May 12, 2022 in New York City. The Dow Jones Industrial Average fell in morning trading as investors continue to worry about inflation and other global issues. (Photo by Spencer Platt/Getty Images)

—

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.

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Logan Ridge Finance Corporation Reports First Quarter 2022

Logan Ridge Finance Corporation Reports First Quarter 2022

NEW YORK, May 12, 2022 (GLOBE NEWSWIRE) — Logan Ridge Finance Corporation (“LRFC” or the “Company”) (Nasdaq: LRFC) today announced its financial results for the first quarter ended March 31, 2022.

First Quarter 2022 Overview

  • Net asset value as of quarter end declined slightly to $106.2 million, or $39.16 per share, compared to $107.1 million, or $39.48 per share, as of December 31, 2021, despite general market conditions deteriorating and credit spreads widening.
  • The fair value of the Company’s investment portfolio grew by $8.7 million to $206.9 million as of March 31, 2022 from $198.2 million as of the prior quarter, due to net unrealized appreciation and net deployment.
  • The Company continued to judiciously redeploy capital generated from exiting the legacy portfolio, with cash decreasing by $23.2 million to $15.8 million as of March 31, 2022, from $39.1 million as of the prior quarter end.
  • During the first quarter of 2022, the Company made approximately $16.4 million of investments and had approximately $8.4 million in repayments and sales, resulting in net deployment of approximately $8.0 million for the period.
  • As of March 31, 2022, our debt investment portfolio, which represented 68.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of our total portfolio at fair value, had a weighted average annualized yield of approximately 8.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} (excluding non-accruals and collateralized loan obligations). This compares to our debt investment portfolio which represented 67.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of our total portfolio at fair value as of December 31, 2021, which had a weighted average annualized yield of approximately 8.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} (excluding non-accruals and collateralized loan obligations).
  • As of March 31, 2022, we had debt investments in two portfolio companies on non-accrual status with an aggregate cost of $12.7 million and fair value of $7.0 million, which represented 6.4 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 3.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the investment portfolio, respectively. This compared to debt investments in two portfolio companies on non-accrual status with aggregate amortized cost of $12.7 million and an aggregate fair value of $7.6 million, which represented 6.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 3.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the investment portfolio, respectively, as of December 31, 2021.
  • As of March 31, 2022, our debt-to-equity ratio was 1.18x as compared to 1.17x as of December 31, 2021.

Management Commentary
Ted Goldthorpe, Chief Executive Officer and President of LRFC, said, “Overall, we had a productive first quarter with our net asset value remaining relatively stable, especially considering the turbulence in the global markets. Despite external factors such as the war in Ukraine, inflation, and rising interest rates, we were able to stay consistent with our reinvestments. Furthermore, as we recently announced, during the second quarter we successfully refinanced Logan Ridge’s legacy capital structure, which materially lowered our cost of capital, by leveraging the size and scale of our platform and the strong working relationships we have with our lenders. We believe that we are well-positioned for a stronger 2022.”

Recent Developments:
Since the end of the first quarter, we successfully completed the refinancing of the entire legacy capital structure, one of our key strategic initiatives.

  • On April 1, 2022, we entered into a Note Purchase Agreement for the issuance of $15.0 million Convertible Notes due in April 2032. The Convertible Notes have a fixed interest rate of 5.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} per annum.
  • On May 10, 2022, we amended our existing senior secured revolving credit agreement with KeyBank (“KeyBank Credit Facility”), increasing the initial commitment from $25.0 million to $75.0 million, with an uncommitted accordion feature that would allow the Company to borrow up to an additional $125.0 million. The amended KeyBank Credit Facility will mature on May 10, 2027. Borrowings under the amended KeyBank Credit Facility will bear interest at a floating forward-looking term rate equal to term SOFR plus an applicable margin of 2.90{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, with 0.40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} SOFR Floor, during the 3-year revolving period and 3.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, with 0.40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} SOFR Floor thereafter. This compares to the current facility which bore interest at LIBOR plus 3.50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, subject to a minimum rate of 4.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

This materially lowers the Company’s cost of capital. The proceeds will be used to pay off the $52.1 million of 5.75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} convertible notes outstanding as well as the remaining $22.8 million of 6.00{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} notes outstanding, both of which mature May 31, 2022.

Selected Financial Highlights

  • Total investment income was $3.3 million for the first quarter of 2022, compared to $4.9 million for the first quarter of 2021. The decline was due primarily to lower average outstanding debt investments compared to the prior quarter.
  • Total expenses for the first quarter of 2022 were $4.4 million, compared to $5.7 million for the first quarter of 2021. Interest and financing fees decreased by $0.8 million, management fees decreased by $0.4 million while other general and administrative costs increased by $0.1 million compared to the prior quarter. The decrease in expenses quarter-to-quarter is driven primarily by lower interest and financing expenses and partially by lower base management fees.
  • Net investment loss for the first quarter decreased $0.2 million to $1.1 million compared to $1.4 million during the three months ended December 31, 2021.
  • Net realized losses on our portfolio were less than $0.1 million, or $(0.01) per share, for the quarter ended March 31, 2022. This compares to net realized losses of $14.0 million, or $(5.17) per share, during the three months ended March 31, 2021.
  • During the quarters ended March 31, 2022 and 2021, the Company report $0.2 million and $27.2 million of net change in unrealized appreciation investments, respectively.
  • The Company had a decrease in net assets resulting from operations of $0.9 million, or $(0.32) per share, during the first quarter of 2022. This compares to a net increase in net asset from operations of $12.4 million, or $4.56 per share ($4.04 diluted), for the first quarter of 2021.

The following table summarizes the amortized cost and the fair value of investments as of March 31, 2022:

($ in thousands)   Investments at
Amortized Cost		     Amortized Cost
Percentage of
Total Portfolio		     Investments at
Fair Value		     Fair Value
Percentage of
Total Portfolio		  
First Lien Debt   $ 106,929       53.7 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}   $ 100,663       48.7 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Second Lien Debt     33,168       16.7 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}     33,220       16.1 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Subordinated Debt     7,117       3.6 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}     7,115       3.4 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Collateralized Loan Obligations     8,106       4.1 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}     7,199       3.5 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Equity and Warrants     43,649       21.9 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}     58,708       28.3 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Total   $ 198,969       100.0 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}   $ 206,905       100.0 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
                                 

The following table summarizes the amortized cost and the fair value of investments as of December 31, 2021:

($ in thousands)   Investments at
Amortized Cost		     Amortized Cost
Percentage of
Total Portfolio		     Investments at
Fair Value		     Fair Value
Percentage of
Total Portfolio		  
First Lien Debt   $ 103,667       54.4 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}   $ 98,251       49.6 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Second Lien Debt     30,048       15.8 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}     30,190       15.2 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Subordinated Debt     5,050       2.6 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}     5,050       2.6 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Equity and Warrants     51,717       27.2 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}     64,698       32.6 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Total   $ 190,482       100.0 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}   $ 198,189       100.0 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
                                 

Interest Rate Risk
Based on our March 31, 2022 consolidated statement of assets and liabilities, the following table shows the annual impact on net income (excluding the potential related incentive fee impact) of base rate changes in interest rates (considering interest rate floors for variable rate securities) assuming no changes in our investment and borrowing structure:

Basis Point Change
($ in thousands)		 Increase
(decrease) in interest income		     (Increase)
decrease in
interest expense		     Increase
(decrease) in
net income		  
Up 300 basis points $ 2,258     $ —     $ 2,258  
Up 200 basis points   1,374       —       1,374  
Up 100 basis points   605       —       605  
Down 100 basis points   (135 )     —       (135 )
Down 200 basis points   (135 )     —       (135 )
Down 300 basis points   (135 )     —       (135 )
                       

Conference Call and Webcast
LRFC will discuss these results in a conference call on Friday, May 13, 2022 at 9:00 am ET.

To access the conference call, please dial (844) 616-4517 approximately 10 minutes prior to the start of the conference call and use the conference ID 3899999. A replay of the conference call will be available from May 13 through May 20. The dial in number for the replay is (855) 859-2056 and the conference ID is 3899999.

A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on the Company’s website, loganridgefinance.com, in the Investor Relations section, under Events and Presentations. The webcast can also be accessed by clicking the following link: Logan Ridge First Quarter 2022 Conference Call. The online archive of the webcast will be available on the Company’s website shortly after the call.

About Logan Ridge Finance Corporation
Logan Ridge Finance Corporation (Nasdaq: LRFC) is a business development company that invests primarily in first lien loans and, to a lesser extent, second lien loans and equity securities issued by lower middle market companies. The Company invests in performing, well-established middle market businesses that operate across a wide range of industries. It employs fundamental credit analysis, targeting investments in businesses with relatively low levels of cyclicality and operating risk. For more information, visit loganridgefinance.com.

About Mount Logan Capital Inc.
Mount Logan Capital Inc. is an alternative asset management company that is focused on public and private debt securities in the North American market. The Company seeks to source and actively manage loans and other debt-like securities with credit-oriented characteristics. The Company actively sources, evaluates, underwrites, manages, monitors and primarily invests in loans, debt securities, and other credit-oriented instruments that present attractive risk-adjusted returns and present low risk of principal impairment through the credit cycle.

About BC Partners Advisors L.P. and BC Partners Credit
BC Partners is a leading international investment firm with over $40 billion of assets under management in private equity, private credit and real estate strategies. Established in 1986, BC Partners has played an active role in developing the European buyout market for three decades. Today, BC Partners executives operate across markets as an integrated team through the firm’s offices in North America and Europe. Since inception, BC Partners has completed 117 private equity investments in companies with a total enterprise value of €149 billion and is currently investing its eleventh private equity fund.

BC Partners Credit was launched in February 2017 and has pursued a strategy focused on identifying attractive credit opportunities in any market environment and across sectors, leveraging the deal sourcing and infrastructure made available from BC Partners.

Cautionary Statement Regarding Forward-Looking Statements
This communication contains “forward-looking” statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue,” “target” or other similar words or expressions. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include those risk factors detailed in the Company’s reports filed with the Securities and Exchange Commission (“SEC”), including the Company’s annual report on Form 10-K, periodic quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC.

Any forward-looking statements speak only as of the date of this communication. The Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information or developments, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

For additional information, contact:

Logan Ridge Finance Corporation
650 Madison Avenue, 23rd Floor
New York, NY 10022

Jason Roos
Chief Financial Officer
Jason.Roos@bcpartners.com
(212) 891-5046

The Equity Group Inc.
Lena Cati
lcati@equityny.com
(212) 836-9611

Serena Liegey
sliegey@equityny.com
(212) 836-9630

Logan Ridge Finance Corporation
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share data)

    As of March 31,     As of December 31,  
    2022     2021  
    (unaudited)        
ASSETS            
Investments at fair value:            
Non-control/non-affiliate investments (amortized cost of $140,329 and $131,829, respectively)     137,341     $ 129,991  
Affiliate investments (amortized cost of $49,790 and $49,803, respectively)     62,649       61,359  
Control investments (amortized cost of $8,850 and $8,850, respectively)     6,915       6,839  
Total investments at fair value (amortized cost of $198,969 and $190,482, respectively)     206,905       198,189  
Cash and cash equivalents     15,838       39,056  
Interest and dividend receivable     1,025       929  
Prepaid expenses     3,137       3,358  
Receivable for unsettled trades     7,086       685  
Total assets   $ 233,991     $ 242,217  
LIABILITIES            
2022 Notes (net of deferred financing costs of $18 and $46, respectively)   $ 22,815     $ 22,787  
2022 Convertible Notes (net of deferred financing costs of $67 and $167, respectively)     52,020       51,921  
2026 Notes (net of deferred financing costs and original issue discount of $1,540 and $1,552, respectively)     48,460       48,448  
KeyBank Credit Facility (net of deferred financing costs of $305 and $353, respectively)     (305 )     (353 )
Management and incentive fees payable     1,027       1,065  
Interest and financing fees payable     1,595       911  
Payable for unsettled trades     1,478       9,265  
Accounts payable and accrued expenses     730       1,144  
Total liabilities   $ 127,820     $ 135,188  
Commitments and contingencies            
NET ASSETS            
Common stock, par value $0.01, 100,000,000 common shares authorized, 2,711,068 and 2,711,068 common shares issued and outstanding, respectively   $ 27     $ 27  
Additional paid in capital     188,846       188,846  
Total distributable loss     (82,702 )     (81,844 )
Total net assets   $ 106,171     $ 107,029  
Total liabilities and net assets   $ 233,991     $ 242,217  
Net asset value per share   $ 39.16     $ 39.48  
                 

Logan Ridge Finance Corporation
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)

    For the Three Months Ended March 31,  
    2022     2021  
INVESTMENT INCOME            
Interest income:            
Non-control/non-affiliate investments   $ 2,383     $ 3,197  
Affiliate investments     719       1,297  
Control investments     95       98  
Total interest and fee income     3,197       4,592  
Payment-in-kind interest and dividend income:            
Non-control/non-affiliate investments     85       71  
Affiliate investments     47       99  
Total payment-in-kind interest and dividend income     132       170  
Dividend income:            
Affiliate investments     —       155  
Total dividend income     —       155  
Other income:            
Affiliate investments     8       9  
Total other income     8       9  
Total investment income     3,337       4,926  
EXPENSES            
Interest and financing expenses     2,188       3,037  
Base management fee     1,027       1,398  
Directors expense     103       103  
Administrative service fees     120       350  
General and administrative expenses     950       821  
Total expenses     4,388       5,709  
NET INVESTMENT LOSS     (1,051 )     (783 )
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS            
Net realized loss on investments:            
Non-control/non-affiliate investments     (36 )     (14,023 )
Net realized loss on investments     (36 )     (14,023 )
Net change in unrealized appreciation on investments:            
Non-control/non-affiliate investments     (1,150 )     23,212  
Affiliate investments     1,303       3,972  
Control investments     76       (24 )
Net change in unrealized appreciation on investments     229       27,160  
Total net realized and unrealized gain on investments     193       13,137  
NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS   $ (858 )   $ 12,354  
NET (DECREASE) INCREASE IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – BASIC   $ (0.32 )   $ 4.56  
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING – BASIC     2,711,068       2,711,068  
NET (DECREASE) INCREASE IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – DILUTED   $ (0.32 )   $ 4.04  
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING – DILUTED     2,711,068       3,263,647  
DISTRIBUTIONS PAID PER SHARE   $ —     $ —