Finance Archives - Page 13 of 34

May 11, 2022

Portman Ridge Finance Corporation Announces First Quarter

Well Positioned to Further Improve Portfolio Performance and Increase Investment Income in 2022;
Refinances JPMorgan Chase Bank (“JPM”) Credit Facility and Reduces Cost of Capital

Declares Quarterly Distribution of $0.63 Per Share

NEW YORK, May 10, 2022 (GLOBE NEWSWIRE) — Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company” or “Portman Ridge”) announced today its financial results for the first quarter ended March 31, 2022.

First Quarter 2022 Highlights

Net asset value (“NAV”) for the first quarter of 2022 remained relatively flat at $278.3 million ($28.76 per share¹) as compared to $280.1 million ($28.88 per share) in the fourth quarter of 2021, despite pervasive market volatility and other macro-economic and political factors.
Total investment income the first quarter of 2022 was $16.9 million, of which $13.0 million was attributable to interest income from the debt securities portfolio.
Excluding the impact of purchase price accounting, core investment income² for the first quarter of 2022 was $15.1 million.
Net investment income (“NII”) for the first quarter of 2022 was $7.9 million ($0.82 per share).
Total investments at fair value as of March 31, 2022 was $568.0 million; when excluding CLO Funds, Joint Ventures and short-term investments, these investments are spread across 30 different industries and 116 entities with an average par balance per entity of approximately $3.3 million.
As of March 31, 2022, six of the Company’s debt investments were on non-accrual status compared to seven as of December 31, 2021.
As of March 31, 2022, par value of outstanding borrowings was $352.4 million with an asset coverage ratio of total assets to total borrowings of 180{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. On a net basis, leverage as of March 31, 2022 was 0.97x.³
During the quarter, the Company restructured its stock buybacks and repurchased 22,990 of shares under its Renewed Stock Repurchase program at an aggregate cost of approximately $545 thousand.

_____________________________¹ NAV per share as determined in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, was decreased 5 cents per share due to the impact of a one-time quarterly tax provision.
² Core investment income represents reported total investment income as determined in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, less the impact of purchase price discount accounting in connection with the Garrison Capital Inc. (“GARS”) and Harvest Capital Credit Corporation (“HCAP”) mergers. Portman Ridge believes presenting core investment income and the related per share amount is useful and appropriate supplemental disclosure for analyzing its financial performance due to the unique circumstance giving rise to the purchase accounting adjustment. However, core investment income is a non-U.S. GAAP measure and should not be considered as a replacement for total investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, core investment income should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge’s financial performance.
³ Net leverage is calculated as the ratio between (A) debt, excluding unamortized debt issuance costs, less available cash and cash equivalents, and restricted cash and (B) NAV. Portman Ridge believes presenting a net leverage ratio is useful and appropriate supplemental disclosure because it reflects the Company’s financial condition net of $83.6 million of cash and cash equivalents. However, the net leverage ratio is a non-U.S. GAAP measure and should not be considered as a replacement for the regulatory asset coverage ratio and other similar information presented in accordance with U.S. GAAP. Instead, the net leverage ratio should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge’s financial condition.

Subsequent Events

Declared a stockholder distribution of $0.63 per share for the second quarter of 2022, payable on June 7, 2022 to stockholders of record at the close of business on May 24, 2022.
On April 29, 2022, the Company refinanced its Revolving Credit Facility with JPMorgan Chase Bank as administrative agent. The amended agreement places three-month SOFR as the benchmark interest rate and reduces the applicable margin to 2.80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} per annum from 2.85{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} per annum. Other amendments include the extension of the reinvestment period and scheduled termination date to April 29, 2025 and April 29, 2026, respectively.

Management Commentary
Ted Goldthorpe, Chief Executive Officer of Portman Ridge, stated, “Despite operating in an environment with rising interest rates, market volatility, and the war in the Ukraine, we reported a relatively unchanged NAV per share for the first quarter, reduced our non-accruals, and maintained our dividend of $0.63 per share. While many of our peers have seen raised interest rates on their lines of credit and outstanding debt, we have been able to restructure our agreement with JPMorgan Chase and lower the interest rate, shift from LIBOR to SOFR, and extend the maturity date by 2 ½ years. Although investment activity and originations were lower in the first quarter of 2022 as compared to the second half of 2021, a sector-wide trend, subsequent to quarter end we have deployed approximately $35 million of our available cash in new investments and have a pipeline of an additional $20 million to $30 million we expect to deploy before the end of the second quarter. We are also pleased to announce that we have added two new seasoned members to our board. Overall, we believe that we are well-positioned to further improve our portfolio performance and increase investment income in 2022.”

Select Financial Highlights

	For the Three Months Ended March 31,
	2022			2021
Total Investment Income		16,944			18,305
Total Expenses		9,036			10,092
Net Investment Income		7,908			8,213

Net realized gain (loss) on investments		(5,553	)		(5,086	)
Net unrealized gain (loss) on investments		2,143			6,745
Tax (provision) benefit on realized and unrealized gains (losses) on investments		(440	)		–
Net realized and unrealized appreciation (depreciation) on investments, net of taxes		(3,850	)		1,659
Realized gains (losses) on extinguishments of debt		–			(1,835	)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	4,058		$	8,037
Net Increase (Decrease) In Stockholders’ Equity Resulting from Operations per Common Share ⁽⁴⁾:
Basic and Diluted:	$	0.42		$	1.07
Net Investment Income Per Common Share⁽⁴⁾:
Basic and Diluted:	$	0.82		$	1.09
Weighted Average Shares of Common Stock Outstanding—Basic and Diluted ⁽⁴⁾		9,698,099			7,517,453

⁴ The Company completed a Reverse Stock Split of 10 to 1 effective August 26, 2021. As a result, the share and per share amounts have been adjusted retroactively to reflect the split for all periods prior to August 26, 2021.


($ in thousands)	For the Three Months Ended March 31, 2022
Interest from investments in debt excluding accretion	$	9,812
Purchase discount accounting		1,812
PIK Investment Income		1,382
CLO Income		1,634
JV Income		2,108
Service Fees		196
Total Investment Income		16,944
Less: Purchase discount accounting		(1,812	)
Core Investment Income		15,132

Total investment income for the three months ended March 31, 2022 and March 31, 2021 was $16.9 million and $18.3 million, respectively. Total expenses for the three months ended March 31, 2022 and March 31, 2021 were $9.0 million and $10.1 million, respectively.

At both March 31, 2022 and December 31, 2021, the weighted average contractual interest rate on our interest earning debt securities portfolio was approximately 8.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Investment Portfolio Activity
The composition of our investment portfolio as of March 31, 2022 and December 31, 2021 at cost and fair value was as follows:


($ in thousands)	March 31, 2022 (unaudited)							December 31, 2021
Security Type	Cost/Amortized Cost		Fair Value		{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}⁽⁵⁾			Cost/Amortized Cost		Fair Value			{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}^(¹)
Senior Secured Loan	$	394,552	$	395,062		69		$	361,556	$	364,701			66
Junior Secured Loan		69,795		60,976		11			82,996		70,549			13
Senior Unsecured Bond		416		43		0			416		43			0
Equity Securities		24,637		22,633		4			26,680		22,586			4
CLO Fund Securities		51,163		29,057		5			51,561		31,632			6
Asset Manager Affiliates⁽⁶⁾		17,791		—		—			17,791		—			—
Joint Ventures		65,305		60,217		11			64,365		60,474			11
Derivatives		31		23		—			31		(2,412	)		—
Total	$	623,690	$	568,011		100	{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}	$	605,396	$	547,573			100	{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

⁵Represents percentage of total portfolio at fair value.
⁶Represents the equity investment in the Asset Manager Affiliates.

As of March 31, 2022, six of the Company’s debt investments were on non-accrual status compared to seven investments on a non-accrual status as of December 31, 2021. Investments on non-accrual status as of March 31, 2022 decreased to 0.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 1.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the Company’s investment portfolio at fair value and amortized cost, respectively, compared to 0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 2.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} as of December 31, 2021.

Liquidity and Capital Resources
As of March 31, 2022, we had $352.4 million (par value) of borrowings outstanding with a weighted average interest rate of 3.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, of which $108.0 million par value had a fixed rate and $244.4 million par value had a floating rate. Portman Ridge expects future portfolio investments to predominately be floating rate investments.

As of March 31, 2022, the Company had unrestricted cash of $20.5 million and restricted cash of $63.1 million. This compares to unrestricted cash of $28.9 million and restricted cash of $39.4 million as of December 31, 2021. As of March 31, 2022, we had $34.4 million of available borrowing capacity under the Senior Secured Revolving Credit Facility, and $25.0 million of borrowing capacity under the 2018-2 Revolving Credit Facility.

Total assets and shareholder’s equity as of March 31, 2022 were $660.9 million and $278.3 million respectively, as compared to $648.3 million and $280.1 million, respectively as of December 31, 2021.

As of March 31, 2022 and December 31, 2021, the fair value of investments and cash were as follows:

($ in thousands)
Security Type	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	20,524	$	28,919
Restricted Cash		63,094		39,421
Senior Secured Loan		395,062		364,701
Junior Secured Loan		60,976		70,549
Senior Unsecured Bond		43		43
Equity Securities		22,633		22,586
CLO Fund Securities		29,057		31,632
Joint Ventures		60,217		60,474
Derivatives		23		(2,412	)
Total	$	651,629	$	615,913

Interest Rate Volatility
The Company’s investment income is affected by fluctuations in various interest rates, including LIBOR and prime rates.

As of March 31, 2022, approximately 87{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the Company’s debt securities portfolio were either floating rate with a spread to an interest rate index such as LIBOR or the prime rate. 76.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of these floating rate loans contain LIBOR floors ranging between 0.50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 2.00{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

In periods of rising or lowering interest rates, the cost of the portion of debt associated with the 4.875{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Notes Due 2026 would remain the same, given that this debt is at a fixed rate, while the interest rate on borrowings under the Revolving Credit Facility would fluctuate with changes in interest rates.

Generally, an increase in the base rate index for floating rate investment assets would increase gross investment income and a decrease in the base rate index for such assets would decrease gross investment income (in either case, such increase/decrease may be limited by interest rate floors/minimums for certain investment assets).

	Impact on net investment income from a change in interest rates at:
	($ in thousands)
	1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}		2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}		3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}
Increase in interest rate	$	1,523	$	3,167	$	4,814
Decrease in interest rate	$	746	$	746	$	746

Net investment income assuming a 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase in interest rates would increase by approximately $1.5 million on an annualized basis. If the increase in rates was more significant, such as 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} or 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, the net effect on net investment income would be an increase of approximately $3.2 million and $4.8 million, respectively.

On an annualized basis, a decrease in interest rates of 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} or 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} would result in an increase in net investment income of approximately $746 thousand. The effect on net investment income from declines in interest rates is impacted by interest rate floors on certain of our floating rate investments, as there is no floor on our floating rate debt facility and the 2018-2 Secured Notes.

Conference Call and Webcast
We will hold a conference call on Wednesday, May 11, 2022 at 9:00 am Eastern Time to discuss our first quarter 2022 financial results. To access the call, stockholders, prospective stockholders and analysts should dial (866) 757-5630 approximately 10 minutes prior to the start of the conference call and use the conference ID 5981065.

A replay of this conference call will be available from approximately 12:00 p.m. ET on May 11 through May 18. The dial in number for the replay is (855) 859-2056 and the conference ID is 5981065.

A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis on the Company’s website www.portmanridge.com in the Investor Relations section under Events and Presentations. The webcast can also be accessed by clicking the following link: Portman 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 Portman Ridge Finance Corporation
Portman Ridge Finance Corporation (Nasdaq: PTMN) is a publicly traded, externally managed investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. Portman Ridge’s middle market investment business originates, structures, finances and manages a portfolio of term loans, mezzanine investments and selected equity securities in middle market companies. Portman Ridge’s investment activities are managed by its investment adviser, Sierra Crest Investment Management LLC, an affiliate of BC Partners Advisors, LP.

Portman Ridge’s filings with the Securities and Exchange Commission (the “SEC”), earnings releases, press releases and other financial, operational and governance information are available on the Company’s website at www.portmanridge.com.

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. For more information, please visit www.bcpartners.com.

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 press release contains forward-looking statements. The matters discussed in this press release, as well as in future oral and written statements by management of Portman Ridge Finance Corporation, that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements.

Forward-looking statements relate to future events or our future financial performance and include, but are not limited to, projected financial performance, expected development of the business, plans and expectations about future investments and the future liquidity of the Company. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “outlook”, “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. 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.

Important assumptions include our ability to originate new investments, and achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this press release should not be regarded as a representation that such plans, estimates, expectations or objectives will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) uncertainty of the expected financial performance of the Company; (2) expected synergies and savings associated with merger transactions effectuated by the Company; (3) the ability of the Company and/or its adviser to implement its business strategy; (4) evolving legal, regulatory and tax regimes; (5) changes in general economic and/or industry specific conditions; (6) the impact of increased competition; (7) business prospects and the prospects of the Company’s portfolio companies; (8) contractual arrangements with third parties; (9) any future financings by the Company; (10) the ability of Sierra Crest Investment Management LLC to attract and retain highly talented professionals; (11) the Company’s ability to fund any unfunded commitments; (12) any future distributions by the Company; (13) changes in regional or national economic conditions, including but not limited to the impact of the COVID-19 pandemic, and their impact on the industries in which we invest; and (14) other changes in the conditions of the industries in which we invest and other factors enumerated in our filings with the SEC. The forward-looking statements should be read in conjunction with the risks and uncertainties discussed in the Company’s filings with the SEC, including the Company’s most recent Form 10-K and other SEC filings. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required to be reported under the rules and regulations of the SEC.

Contacts:
Portman Ridge Finance Corporation
650 Madison Avenue, 23rd floor
New York, NY 10022
info@portmanridge.com

Jason Roos
Chief Financial Officer
Jason.Roos@bcpartners.com
(212) 891-2880

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

Serena Liegey
The Equity Group Inc.
sliegey@equityny.com
(212) 836-9630

PORTMAN RIDGE FINANCE CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)

	March 31, 2022			December 31, 2021
	(Unaudited)
ASSETS
Investments at fair value:
Non-controlled/non-affiliated investments (amortized cost: 2022 – $490,597; 2021 – $479,153)	$	464,754		$	452,482
Non-controlled affiliated investments (amortized cost: 2022 – $74,951; 2021 – $74,082)		75,129			74,142
Controlled affiliated investments (cost: 2022 – $58,142; 2021 – $52,130)		28,128			23,361
Total Investments at Fair Value (cost: 2022 – $623,690; 2021 – $605,365)		568,011			549,985
Cash and cash equivalents		20,524			28,919
Restricted cash		63,094			39,421
Interest receivable		3,119			5,514
Receivable for unsettled trades		2,153			20,193
Due from affiliates		592			507
Other assets		3,365			3,762
Total Assets	$	660,858		$	648,301
LIABILITIES
2018-2 Secured Notes (net of discount of: 2022 – $1,358; 2021 – $1,403)		162,504			162,460
4.875{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Notes Due 2026 (net of discount of: 2022 – $2,046; 2021 – $2,157; net of deferred financing costs of: 2022 – $977; 2021 – $951)		104,977			104,892
Great Lakes Portman Ridge Funding LLC Revolving Credit Facility (net of deferred financing costs of: 2022 – $640; 2021 – $732)		79,930			79,839
Derivative liabilities (cost: 2021 – $31)		–			2,412
Payable for unsettled trades		21,622			5,397
Accounts payable, accrued expenses and other liabilities		5,101			4,819
Accrued interest payable		3,325			2,020
Due to affiliates		1,286			1,799
Management and incentive fees payable		3,812			4,541
Total Liabilities		382,557			368,179
COMMITMENTS AND CONTINGENCIES
NET ASSETS
Common stock, par value $0.01 per share, 20,000,000 common shares authorized; 9,867,998 issued, and 9,676,705 outstanding at March 31, 2022, and 9,867,998 issued, and 9,699,695 outstanding at December 31, 2021		97			97
Capital in excess of par value		733,327			733,095
Total distributable (loss) earnings		(455,123	)		(453,070	)
Total Net Assets		278,301			280,122
Total Liabilities and Stockholders’ Equity	$	660,858		$	648,301
NET ASSET VALUE PER COMMON SHARE ⁽⁴⁾	$	28.76		$	28.88

(4) The Company completed a Reverse Stock Split of 10 to 1 effective August 26, 2021, the common shares and net asset value per common share have been adjusted retroactively to reflect the split for all periods presented.

PORTMAN RIDGE FINANCE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)

	For the Three Months Ended March 31,
	2022			2021
INVESTMENT INCOME
Interest income:
Non-controlled/non-affiliated investments	$	12,667		$	14,470
Non-controlled affiliated investments		591			233
Total interest income		13,258			14,703
Payment-in-kind income:
Non-controlled/non-affiliated investments		1,126			1,132
Non-controlled affiliated investments		256			–
Total payment-in-kind income		1,382			1,132
Dividend income:
Non-controlled affiliated investments		945			814
Controlled affiliated investments		1,163			1,226
Total dividend income		2,108			2,040
Fees and other income		196			430
Total investment income		16,944			18,305
EXPENSES
Management fees		2,135			1,793
Performance-based incentive fees		1,678			2,094
Interest and amortization of debt issuance costs		3,344			3,380
Professional fees		845			1,494
Administrative services expense		847			613
Other general and administrative expenses		187			718
Total expenses		9,036			10,092
NET INVESTMENT INCOME		7,908			8,213
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains (losses) from investment transactions:
Non-controlled/non-affiliated investments		(3,670	)		(5,195	)
Non-controlled affiliated investments		212			109
Derivatives		(2,095	)		–
Net realized gain (loss) on investments		(5,553	)		(5,086	)
Net change in unrealized appreciation (depreciation) on:
Non-controlled/non-affiliated investments		829			6,263
Non-controlled affiliated investments		117			331
Controlled affiliated investments		(1,245	)		625
Derivatives		2,442			(474	)
Net unrealized gain (loss) on investments		2,143			6,745
Tax (provision) benefit on realized and unrealized gains (losses) on investments		(440	)		–
Net realized and unrealized appreciation (depreciation) on investments, net of taxes		(3,850	)		1,659
Realized gains (losses) on extinguishments of debt		–			(1,835	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	4,058		$	8,037
Net Increase (Decrease) In Stockholders’ Equity Resulting from Operations per Common Share ⁽⁴⁾:
Basic and Diluted:	$	0.42		$	1.07
Net Investment Income Per Common Share⁽⁴⁾:
Basic and Diluted:	$	0.82		$	1.09
Weighted Average Shares of Common Stock Outstanding—Basic and Diluted ⁽¹⁾		9,698,099			7,517,453

May 5, 2022May 13, 2022

‘Florida needs Disney,’ says Harvard professor

Disney (DIS) versus DeSantis.

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But several imagine it was just way too very little, also late.

“When this legislation begun in Florida, [Disney] really should have experienced a place completely ready to go…a place that was accurate to the mission and values of what Disney is — a place that accepts everybody for who they are,” George mentioned.

FILE PHOTO: Bob Chapek, chairman of Walt Disney Parks and Resorts, speaks during the 10th anniversary ceremony of Hong Kong Disneyland in Hong Kong, China September 11, 2015. REUTERS/Tyrone Siu/File Photo — FILE Photograph: Bob Chapek, chairman of Walt Disney Parks and Resorts, speaks during the 10th anniversary ceremony of Hong Kong Disneyland in Hong Kong, China September 11, 2015. REUTERS/Tyrone Siu/File Image

Chapek’s fumble now serves as a cautionary tale to other organization leaders who are “quite anxious” about potential political battles, according to the professor.

Executives “don’t want to get caught in the crossfire, both, but they are all likely back again and genuinely thinking, ‘What do I stand for?’ ‘What problems must I get included in?’ ‘When need to I get associated?’ and ‘How do I steer clear of obtaining caught in the crosshairs of some politician?’ George discussed.

“CEOs today require to know how to lead via a crisis due to the fact we go from a person crisis to the upcoming — from COVID to George Floyd to Russia and Ukraine, and in all probability one more 1 just all over the corner,” he ongoing.

“They need to have to be prepared to offer with these crises and have a place which is legitimate to their enterprise.”

‘Vatican with mouse ears’

ORLANDO, FL - MARCH 22: Disney employee Nicholas Maldonado holds a sign while protesting outside of Walt Disney World on March 22, 2022 in Orlando, Florida. Employees are staging a company-wide walkout today to protest Walt Disney Co.'s response to controversial legislation passed in Florida known as the “Don’t Say Gay” bill. (Photo by Octavio Jones/Getty Images) — ORLANDO, FL – MARCH 22: Disney staff Nicholas Maldonado retains a indication while protesting exterior of Walt Disney Environment on March 22, 2022 in Orlando, Florida. Staff members are staging a corporation-vast walkout now to protest Walt Disney Co.’s reaction to controversial laws handed in Florida recognized as the “Don’t Say Gay” bill. (Photo by Octavio Jones/Getty Visuals)

At the moment, Walt Disney Entire world Resort sits on a 40-square mile area recognised as Reedy Creek, the particular tax district that has authorized Disney to operate as a self-governing entity given that its inception, Get Auto Repair.

That indicates Disney controls all of its utilities and infrastructure, sets making codes, operates its very own police and fire departments, and can broaden and grow whenever it wishes — all with no community or state govt interference.

“I simply call it a Vatican with mouse ears, mainly because it is really effectively the same sort of authority that the Vatican has in Rome in the state of Italy,” said Richard Foglesong, Disney historian and author of the reserve “Married to the Mouse: Walt Disney Planet and Orlando.”

As a result, the district (in addition to delivering huge regulate and versatility) will save the organization tens of thousands and thousands of dollars just about every calendar year in specified taxes and expenses.

The new ruling will thus power Disney to pay out taxes on people federal government-funded programs nonetheless, it also signifies that Reedy Creek’s $997 million really worth of bond debt, and some $163 million in once-a-year tax payments, could drop on the citizens of Orlando.

U.S. Florida Governor Ron DeSantis speaks at the Conservative Political Action Conference (CPAC) in Orlando, Florida, U.S. February 24, 2022. REUTERS/Octavio Jones

DeSantis uncovered in a city hall previous week that there will be “extra legislative motion” to tackle potential tax fallout and any problems pertaining to the legality of dissolving the district.

“We’ve contemplated that. We know what we are going to do, so stay tuned. That’ll all be evident,” the governor stated.

Even now, who or what will spend off Disney’s bond debt is “the billion dollar concern.”

“There are several unintended penalties, frankly, that have not been thought through that will give Disney additional ammunition,” George claimed.

‘Florida demands Disney’

For that reason, thanks to the many uncertainties encompassing the bill, some authorities say the dissolution may not even materialize.

“I don’t consider it can be pretty very likely — frankly, the penalties are way too dire,” Foglesong surmised.

However, the monthly bill was signed into legislation by Governor DeSantis final thirty day period and, barring any key backpedaling on the part of lawmakers, will go into result in June 2023. Disney could also sue Florida for retaliation in an attempt to thwart the legislation, whilst industry experts say it is additional likely that the media big will enter into negotiations to change the terms of the district.

“Florida needs Disney — it is a huge revenue producer and has improved anything all-around [Orlando,]” George mentioned bluntly, indicating the battle has turned into a concern of “who demands who more.”

“Florida won’t be able to do without the need of Disney Earth, I can convey to you that.”

Alexandra is a Senior Enjoyment and Foodstuff Reporter at Yahoo Finance. Stick to her on Twitter @alliecanal8193 or e mail her at alexandra.canal@yahoofinance.com

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May 3, 2022

B2B Finance Company eCapital Buys CNH Finance

Finance company eCapital has obtained CNH Finance, a Connecticut-dependent specialty finance enterprise doing the job in health care, the organizations announced Monday (Could 2).

The offer will help even more eCapital’s long-term development method of bolstering its specialty finance business by attaining corporations that in good shape its progress model, according to the push release. Additionally, eCapital explained it will make this a “seamless” changeover for clientele, team and associates.

“The addition of CNH Finance complements our latest presenting and supports our expansion technique as we proceed to advance our situation in the finance industry,” said Marius Silvasan, CEO of eCapital. “CNH Finance has deep skills and a talented staff that will be vital as we develop into the healthcare industry.”

This is eCapital’s 12th choice finance sector acquisition in 4 decades, according to the launch.

“We have built a successful, specialised lending firm more than the last 12 years,” claimed Tim Peters, CEO of CNH Finance. “Now is the ideal time in our evolution to develop into section of a bigger business with access to the cash, technologies and arrive at we require to scale.

“We search forward to being section of the eCapital household and increasing our prospects to provide the healthcare business.”

In other healthcare-linked information, HashCash Consultants, a blockchain advancement company, will be operating on a new non-fungible token (NFT) venture involving the healthcare field and peoples’ health and fitness information.

Study much more: Blockchain Organization HashCash Joins Healthcare-Targeted NFT Challenge

This challenge will require people volunteering to have their well being knowledge made into NFTs, which they can perhaps share with healthcare providers to take part in scientific tests or study.

The business mentioned when an person does matters like buying a DNA screening kit or getting a genetics-centered diet system, they share details and history with organizations who can often then use it for their own applications. The NFT venture aims to observe that information, permitting buyers to see who is making use of it without the need of their permission.

HashCash claimed it is partnering with a U.K. enterprise on the idea, though the corporation was not named.

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NEW PYMNTS Facts: THE Truth ABOUT BNPL AND Keep Playing cards – APRIL 2022

About: Buyers who have shop playing cards use them for 87{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of all qualified purchases — but this doesn’t indicate stores should boot buy now, pay back afterwards (BNPL) selections from checkout. The Truth of the matter About BNPL And Retail store Cards, a PYMNTS and PayPal collaboration, surveys 2,161 buyers to locate out why furnishing each BNPL and retail store playing cards are key to assisting retailers maximize conversion.

May 1, 2022

How to manage your money during a recession, according to personal finance experts

Threats to the U.S. overall economy have drastically elevated through the initial 4 months of 2022, leaving a lot of buyers asking yourself how to best safeguard their portfolios.

From the war in Ukraine and rising curiosity prices to sky-significant inflation and falling economic growth, warning signals of a probable economic downturn are plentiful—to say the least—and both Wall Street and most important avenue have taken observe.

Billionaire investors like Carl Icahn and Leon Cooperman were some of the 1st to seem the alarm about the growing potential for a U.S. economic downturn, but now, previous Federal Reserve officials and best financial investment financial institutions are adding to a growing refrain of economic downturn predictions.

Wall Street’s constant warnings have led 81{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of U.S. older people to say they believe the U.S. economic climate is probable to practical experience a recession this calendar year, in accordance to a CNBC survey, done by Momentive. And a new Reuters poll showed that 40{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of economists consider the U.S. economic climate will slide into a recession within the up coming 24 months.

If they are correct, investors should be ready for the worst. Here’s what a several major financial investment advisors suggest investors do to guard their portfolios in a worst-circumstance state of affairs.

Imagine extended-phrase and comply with an expense approach

To start with and foremost, buyers should really assume extensive-phrase in instances of economic turmoil, and adhere to their financial commitment options. Actively investing in stocks and properly timing sector downturns is a tough game—just question hedge fund supervisors.

From 2011 to 2020, a very simple financial investment in the S&P 500 returned nearly three moments as substantially as the regular hedge fund, in accordance to knowledge from the American Organization Institute.

“Investors really should be investing for the lengthy time period primarily based off a economical program seeking at their hazards, goals and time horizons,” Brett Bernstein, the CEO and co-founder of the money organizing business XML Economic Group, instructed Fortune. “If a economic downturn ended up to arrive, it’s a lot more about protecting the acceptable asset allocation and building tweaks to the portfolio primarily based on the current marketplace situations.”

Avoiding worry offering is important to extensive-term investing results, industry experts say. Right after all, heading again to 1927, if an trader place $100 in the S&P 500 and stayed invested, their portfolio would have been value in excess of $16,800 by May possibly 2020. But missing the 10 most significant daily inventory marketplace rallies would slice that worth down to just $5,576, according to UBS.

“Clients should really be relaxed with their allocations and not check out to improve them when a economic downturn begins,” John Ingram, CIO and Associate of the investment advisory and prosperity administration agency Crestwood Advisors, informed Fortune. “Given the tendency for investors to promote close to stock marketplace bottoms (and skip the market’s rebound), ‘de-risking’ portfolios to safeguard cash will very likely lose income as purchasers switch a short term market decline into a everlasting one particular.”

Secure-haven assets

That doesn’t imply traders need to just sit on their arms during a recession, nonetheless. There are so-known as “safe-haven assets” that can help reduce portfolio chance. But industry experts say it is important to get into these belongings ahead of a economic downturn commences, not immediately after.

“Since markets price reduction the long term, investors require to acquire motion just before the recession hits. A wholesome dose of dollars as nicely as bonds with a short maturity (2 decades or so) would offer you defense,” J. Douglas Kelly, a lover and portfolio supervisor at Williams Jones Wealth Management told Fortune.

Joseph Zappia, the co-main investment officer at the expense advisory company LVW Advisors, also stated acting in advance of a recession commences to safeguard financial savings is essential. He encouraged buyers look to collection I financial savings bonds, which are backed by the U.S. federal government and return the fee of inflation on an annual foundation, to defend their portfolios as customer prices soar.

“It is far more about owning a plan in advance of a recession. The previous adage that Noah did not wait around for it to commence raining before he crafted his ark rings true now,” Zappia said.

Then there is the most frequent safe and sound-haven asset of all, gold. Gold tends to outperform stocks in situations of economic turmoil, facts demonstrates. For instance, throughout the Excellent Economic downturn, the price of gold enhanced dramatically, surging 101.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from 2008 to 2010, in accordance to a report from the Bureau of Labor Data.

“As a harmless haven asset, a small allocation to gold could have a significant impression to all round portfolio volatility and effectiveness for long-term traders who find security in adverse industry environments and exogenous shocks to the capital marketplaces,” Jeff Wagner, a senior spouse at LVW Advisors, informed Fortune.

Diversify your portfolio

A effectively-diversified portfolio is another way to assistance prevent critical losses throughout a economic downturn, gurus say.

“The sage advice is to create a portfolio that can climate the volatility by becoming nicely-diversified (which includes set cash flow, equities, alternative investments, non-public fairness, and genuine property),” Jon Ekoniak, CFP, a taking care of associate at the unbiased expenditure advisory company Bordeaux Prosperity Advisors, advised Fortune.

While lots of traders have flocked to large-flying tech stocks and trade-traded resources about the past number of years, it’s significant to try to remember that traditionally, the tech-significant Nasdaq has underperformed throughout recessions.

The index fell additional than 80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} next the dot-com bubble in excess of the program of a several yrs, and through the Good Economic downturn, it sank 46{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from November 2007 to November 2008 alone.

That is why it may well make sense to target on diversification, and seem to options to reduce losses.

“A effectively-diversified portfolio of high quality shares, risk-free fastened cash flow which includes inflation-safeguarded U.S. Treasury securities, and diversifiers these as genuine estate (or other solutions for competent buyers) can be beneficial in minimizing losses,” Zappia stated.

Keep in mind that not just about every economic downturn is the Terrific Economic downturn

Even though recession fears are spreading like wildfire, it’s also valuable to recall that not every economic downturn is as painful as the Great Economic downturn.

“It is vital to distinguish between the differing severity of recessions,” John Ingram of Crestwood Advisors stated.

Ingram noted that the Good Recession of 2008/09 was a banking disaster that led to a deep, lengthy-lasting recession. But in today’s economic system, U.S. banks’ equilibrium sheets continue to be potent, which will make it “unlikely” that the U.S. will experience the kind of recession it did then.

“Clients ought to realize that provided the very low growth outlook, recessions could develop into additional common and will, most probable, be much less impactful to portfolios than the 2008/09 Terrific Recession,” Ingram stated. ”Perhaps investors can move earlier some of the dread involved with recession.”

This tale was originally showcased on Fortune.com

May 1, 2022

Tips For Small Businesses To Finance Their Holiday Marketing And Inventory Now

The getaway buying time is a crucial time for most stores. In truth, Black Friday, the working day after Thanksgiving that is usually regarded as the initial day of the vacation procuring season, got its title for the reason that it historically commences the period of time when suppliers go from staying “in the red” and “into the black” (profitability).

Retailers are hoping for a strong Christmas year. (Image by Sean Gallup/Getty Images)

Getty Visuals

Just how essential is the getaway year to vendors? Even though it varies by marketplace, some vendors are far more dependent on fourth quarter sales than other people. For occasion, toy suppliers and jewelers retailers generally deliver additional than a person-3rd of their yearly product sales (35{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) all through the fourth quarter of the yr, in accordance to U.S. Census Bureau details. Other vendors whose achievement hinges on a successful fourth quarter include section outlets, electronics merchants, and outfits retailers.

Even though Christmas procuring seems like a long way off, little enterprises need to get ready for it now. Holiday break period internet marketing normally takes up a major part of a business’s once-a-year budget, and modest small business homeowners considerably be guaranteed to make investments in their website, social media, e-mail marketing and advertising, signage and fliers, exclusive activities and other p.r. attempts.

Further more, with charges increasing for just about each and every kind of product and provide chain troubles stalling the movement of stock, intelligent business enterprise homeowners should be securing what they require and putting orders effectively in progress of the getaway period. Selecting staff is a lot more pricey than in years past, in component, due to the fact the competitiveness to employ the service of staff has driven up labor costs. Personnel are hunting for larger salaries and in purchase to stay clear of being quick-staffed, business enterprise house owners have tiny option but to pay them.

The summer time months can be a sluggish period for many forms of businesses, which may perhaps not have the money on hand to get gain of pre-payment bargains and other special delivers that can assistance them lessen the price tag of superior offered. As additional and far more buyers choose procuring on the net for presents, suppliers must be prepared to purchase delivery materials and postage to have completely ready for the expected inflow of inventory gross sales.

So how can a tiny organization on tight margins program to spend for 12 months-close small business costs?

There are a selection of solutions.

Enterprise credit score cards. Plastic is superb, in particular for cash-strapped tiny company homeowners who want to buy inventory and supplies now and pay for them later. The important issue is to only invest in what can be paid off quickly, since credit cards generally appear with large desire prices. In the small-phrase, making use of credit score cards is a feasible option IF you are ready to spend them off quickly – without the need of owning to incur significant finance fees that eventually drive up the price of calendar year-finish materials. Even more, if you are late in shelling out or skip a payment solely, it will negatively influence your credit score scores.

Company line of credit history. For these organizations that now have a enterprise line of credit rating set up, using the line can assistance rapidly spend for considerable purchases of conclusion-of-year inventory. As opposed to a business personal loan, a line of credit rating acts as all set money in times of have to have. In lots of ways it is similar to a enterprise credit history card. A line of credit can be a small business lifeline in situations of unexpected emergency or even seasonal money move tightening. With a with a line of credit history, a business enterprise operator borrows only what is necessary and only pays curiosity on the amounts borrowed. In most cases, the desire on a company line of credit rating is much lower than that of a credit rating card.

Smaller enterprise financial loans. Small business homeowners who strategy nicely more than enough in progress, can use to safe a compact company bank loan that can help fork out for getaway expenses. If you have a superior credit history rating (700 or above), you must be ready to safe a financial loan at a acceptable fascination amount. Anyone taking into consideration this funding selection need to act now for the reason that the Federal Reserve has been signaling for months that it programs to raise curiosity fees in an exertion to consist of inflation to its 2.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} goal rate. Lots of economists forecast that the Fed will elevate rates aggressively in coming months.

The down side of implementing for a smaller organization personal loan is that a company operator could not be ready to acquire the revenue as quickly as needed to pay back for enhanced fees at year’s end. Classic lender loans and SBA financial loans can consider months to process loan requests.

On the internet (non-bank) creditors. Non-financial institution creditors typically are ready to quickly make a decision and deposit personal loan money in a company checking account or financial savings account in considerably less than a day. These so-named “alternative lender” solutions involve Account Receivables Funding or Bill factoring. The way it works is that a business enterprise sells remarkable accounts receivable (invoices) to a 3rd-get together that will then pay back the enterprise all over 85 to 95{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the benefit of the bill. The big difference is called the “factoring charge.”

With soaring prices, provide chain difficulties, and other issues, compact company entrepreneurs will be intelligent to program ahead now and secure the cash they have to have for 4Q fees now, fairly than ready until it may possibly be too late.

April 30, 2022

Elon Musk’s bank loans show the divide in American finance

As a business make a difference, it is easy to see why banking companies agreed to supply Elon Musk with $25.5bn in financial loans for his Twitter takeover bid. With hundreds of billions of dollars in shares and maybe some cryptocurrency like dogecoin in reserve, the Tesla founder is a creditworthy fellow. A serial entrepreneur, he also stands to pay back large fees for financial companies in the several years to come.

However there is one thing worrisome about what just happened. The pink carpet unfurled for Musk on Wall Road contrasts with the roadblocks entrepreneurs of much more modest usually means deal with when they seek out financial institution financial loans — and factors to a growing divide in between credit rating haves and have-nots in the US company community.

Banks, of class, have never ever been social-welfare organisations. But they have steadily moved absent from Main Road organization lending in current decades as consolidation transformed the condition of American banking. The amount of lesser local community lenders plunged when a handful of substantial banking companies developed stability sheets measured in the trillions of dollars. Economies of scale became the industry’s Holy Grail, and the minimal man of the enterprise world begun to get dropped in the shuffle.

“We have moved from way too large to fail to way too major to treatment,” suggests Beth Bafford, vice-president for system at Calvert Effects Funds, a non-financial gain team that is doing work with non-public loan providers and local governments to create market mechanisms that would make credit history much more obtainable — and less pricey — for smaller enterprise, specially in minority communities.

“Day in and working day out, we see compact small business owners who are just heroes,” she says. “They give anything to their organization, to their staff members, and all they are asking for is a fair shot, just obtain to the identical applications Elon Musk has accessibility to. So normally, it isn’t accessible. It is an example of a economic process that is established up to provide incredibly several men and women very well, and all pushed by scale.”

The adjustments in lending methods have been particularly pronounced in the decades right after the economic crisis. Bank lending amplified to larger organizations, but not to smaller kinds, according to studies compiled by Rebel Cole, a former Federal Reserve Board staff members economist who is now a finance professor at Florida Atlantic College. By his rely, the full stock of small business financial loans of more than $1mn at US financial institutions rose from $1.44tn in 2010 to $2.75tn in 2019 (the past calendar year in advance of knowledge was skewed by the pandemic). By distinction, whole loans of less than $1mn fell from $652bn to $645bn.

Corporations seeking the smallest loans have been strike the hardest. Cole says the set expense of originating a organization bank loan in the US can reach $10,000 to $15,000, producing loans of less than $100,000 or even $200,000 uneconomic for several banking institutions. This final result is that more compact entrepreneurs are usually forced to faucet increased-charge funding resources ranging from credit score cards to items recognised as service provider income innovations, which at times carry annual percentage prices working into the triple digits, field resources say.

The tremendous-prosperous, by distinction, can basically live on financial institution loans, borrowing in opposition to their equity holdings to stay clear of declaring income and subjecting them selves to the very same taxes as the salaried masses. The terms are interesting, way too the FT reported only previous year that prosperity administration arms of significant US financial institutions have been presenting two-year financial loans from liquid belongings like shares at an interest charge of about 1.4 per cent.

Musk is leveraging his inventory holdings to assist finance his $44bn Twitter buyout. Practically 50 percent of his $25.5bn in credit card debt in the deal — $12.5bn — is getting secured by Tesla shares. In the preferred creativity, margin loans of this variety are deemed risky, considering the fact that stocks can go down as very well as up. But today’s financial institutions are delighted to lend from this kind of assets. “Equities are hard cash equivalents,” Cole says. “What’s less difficult to convert into dollars than equities?”

The dilemma is how numerous mammoth margin loans are way too lots of for our personal excellent. Retaining Musk happy diverts consideration — and dollars — from other requirements. The bankers who had been tripping over themselves to swiftly set up funding for his Twitter bid were being in all probability far too fast paced to back again any new supply chains or fulfil their guarantees to assistance communities of colour.

Perhaps the time has occur for policymakers to encourage US creditors to broaden their horizons. I be reluctant to strike an optimistic take note in the present political ecosystem but I wager there are individuals on the still left and the correct who would like credit history to be much more broadly readily available to experienced borrowers.

Check with by yourself: is the countrywide interest better served by serving to the genuine Elon Musk turn out to be even much more abundant — or locating new Elon Musks? Truly feel totally free to tweet your reaction.

gary.silverman@ft.com