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These Companies Have Left Russia: The List Across Tech, Entertainment, Finance

These Companies Have Left Russia: The List Across Tech, Entertainment, Finance
gettyimages-1238862139

Tech companies across the globe are pulling out of Russia.


Jakub Porzycki/Getty Images

This story is part of War in Ukraine, CNET’s coverage of events there and of the wider effects on the world.

As the Russia’s war on Ukraine continues, a growing number of companies have said they are stopping sales of products and services in Russia. This will make items, including video games, iPhones and the PS5, harder to get in Russia. 

Apple and Microsoft both said they’ll stop selling products in Russia. Game maker EA said it will stop the sale of games and other digital items while the conflict continues. Online services, such as Airbnb, are suspending operations in Russia.

Companies have also responded in other ways, including cracking down on misinformation and reducing the online presence of Russian state-owned media outlets like RT News and Sputnik News. Google and Twitter have suspended advertising in Russia. 

Russia invaded Ukraine on Feb. 24 after months of growing tension, marked by a buildup of Russian forces along Ukraine’s borders. The US, the EU and the UK have all imposed economic sanctions on Russia, including ones aimed directly at Russian President Vladimir Putin.

Ukraine, which was part of the Soviet Union for much of the 20th century, declared its independence in 1991. Since then, the country has been establishing closer ties with Western Europe and the US.

Here’s a look at tech, entertainment and finance companies that have stopped sales or other services in Russia:

Adobe: The maker of Photoshop and other software stopped all new sales and services in Russia, including its software for creative pros and its website analytics tools, citing “our civic and moral responsibility to support democracy and humanity” and government sanctions. In addition, the company cut off access to its cloud services for Russia’s government-controlled media outlets.

Airbnb: The room-rental service has suspended all operations in Russia and Belarus and has said its nonprofit subsidiary will offer free temporary housing to 100,000 Ukrainian refugees. It’s also waived host and guest fees for bookings in Ukraine, as people worldwide use Airbnb as a way to provide income directly to Ukrainians by, as The Guardian put it, “paying but not staying.”

Amazon: The online giant suspended shipments of all retail products to customers in Russia and Belarus, and suspended access to Prime Video for users in Russia.

Apple: The tech giant stopped selling its products in Russia and is halting online transactions, including limiting Apple Pay in the country. Additionally, it has disabled some Apple Maps features in Ukraine to protect civilians. 

AWS: Though AWS doesn’t have data centers or offices in Russia, it’s stopped allowing new sign-ups for the service in Russia and Belarus, saying it’ll suspend accounts where customers are “using AWS services to threaten, incite, promote or actively encourage violence, terrorism or other serious harm.” Customers using AWS in Russia include companies that are headquartered elsewhere but have development teams in Russia.

BMW, Ford, GM, Honda: Several automakers have scaled back their operations in Russia. BMW will stop local production in Kaliningrad and halt exports to Russia. Ford is suspending its operations in Russia “effective immediately, until further notice.” GM is suspending business in Russia. Honda has suspended exports there.

Bumble: The dating app is discontinuing operations in Russia and removing its apps from the App Store and Google Play Store in Russia and Belarus.

Disney: The entertainment company has halted all theatrical releases in Russia, including upcoming Pixar film Turning Red. It has also paused content and product licensing, channels, local productions, National Geographic magazine and tours, and Disney Cruise Line activities.

Electronic Arts: The maker of popular video games, including the FIFA franchise, has stopped selling all content in Russia and Belarus. This includes games, add-on content and virtual currency. Additionally, EA has removed Russian national teams from all versions of its soccer and hockey video games.

Epic Games: The maker of Fortnite said it will stop commerce with Russia in its games but wasn’t blocking access to games “for the same reason other communication tools remain online: the free world should keep all lines of dialogue open.”

Goldman Sachs: The American bank is complying with sanctions and closing down its Russian business, it announced March 10. It’s arranging for the departures necessary among its 80 staff in Russia, according to The New York Times.

Google: Though users in Russia can still use Google’s search engine, the company has completely suspended its advertising business in the country. This includes ad revenue from YouTube, search and all other forms of Google-sponsored marketing. Some Google Maps features have also been disabled, though Google provides info on refugee resources for people fleeing Ukraine. Google also suspended billing on Play, its mobile app store, and paused payment-based services for YouTube users in Russia, such as YouTube Premium and Super Chat. Google Cloud on March 10 also stopped accepting new customers in Russia. YouTube on March 11 said it’s removing videos that deny or trivialize the Russian invasion of Ukraine, broadening its ban on Russian state-sponsored media and preventing YouTube users in Russia from monetizing their videos in any way.

IBM: The computer giant has suspended all business in Russia, CEO Arvind Krishna said March 7, and is also offering support for IBM-employed refugees. “A newly developed and deployed IBMer Resource Finder Map connects Ukrainian IBMers and IBM contractors fleeing their country with IBM colleagues in the immediate CEE region who can offer assistance, including lodging, transportation, food and supplies, for them and their families,” Krishna said.

Intel: The tech company has suspended all shipments to customers in Russia and Belarus, including chips.

Microsoft: The maker of Windows has suspended sales of its products and services in Russia, while pledging to beef up its cybersecurity in Ukraine. 

Netflix: The streaming giant has paused all projects and acquisitions in Russia. Additionally, Netflix has refused to add state-run channels to its Russian service. 

Nintendo: The video game company has currently placed its Russian e-shop in maintenance mode, meaning it’s unavailable for Russian users. As of now, Russian gamers are locked out of purchasing new games through the service. 

Nvidia: A spokesman for the chipmaker said Nvidia “isn’t selling into Russia” but declined to comment further. The halt reportedly covers all Nvidia products. 

Paramount: Like the other movie studios on this list, Paramount will halt theatrical releases in Russia. This includes the upcoming Lost City, as well as a sequel to Sonic the Hedgehog. 

PayPal: The online international payments company halted services in Russia over the weekend, with CEO Dan Schulman saying the company “supports the Ukrainian people and stands with the international community in condemning Russia’s violent military aggression in Ukraine.”

Rockstar Games: Take-Two Interactive will cease selling and allowing installations of video games under its Rockstar Games umbrella in Russia and Belarus, a March 7 report said, just ahead of the release of Grand Theft Auto V on PS5 and Xbox Series X/S.

Samsung: Samsung suspended shipments to Russia as of March 4. “Due to the current geopolitical developments, shipments to Russia have been suspended,” a Samsung spokesperson said. “We continue to actively monitor this complex situation to determine our next steps.”

Snapchat: The ephemeral-message app has halted all ad sales to Russian and Belarusian entities, though its app remains live throughout the region as a communication tool.

Sony: The company’s movie studio has stopped upcoming theatrical releases in Russia. Following increasing pressure for the company to cease sales of its PS5 gaming system in the country, Sony Interactive Entertainment on March 9 announced it’s suspended all hardware and software shipments, as well as the launch of Gran Turismo 7 and PlayStation Store operations in Russia. Sony Music has also suspended operations in Russia. 

TikTok: Short-form video app TikTok is suspending livestreaming and new content to its video service in Russia. The company said on March 6 that the decision was based on the newly passed “fake news” law in Russia, saying it needed to review the safety implications of the new legislation, which punishes those who spread “false information” about Russia’s invasion of Ukraine with sentences of up to 15 years in prison.

Twitch: The game-streaming platform told Russian users it will cease making payments to them due to sanctions blocking all possible transaction methods.

Ubisoft: The game maker said it has suspended sales in Russia. In a blog post, Ubisoft also said it has taken steps to help employees based in Ukraine, including setting up alternative housing in neighboring countries and setting up an emergency hotline to provide support and aid. 

Universal: The movie studio will also suspend releases in Russia, though it has yet to announce the specific films that will be withheld. 

Warner Bros.: The movie studio won’t release The Batman in Russia as scheduled and will instead pause operations in the country.

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Portman Ridge Finance Corporation Announces Full Year 2021

Portman Ridge Finance Corporation Announces Full Year 2021

NEW YORK, March 10, 2022 (GLOBE NEWSWIRE) — Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company” or “Portman Ridge”) announced today its financial results for the full year ended December 31, 2021.

The Company also declared a quarterly stockholder distribution of $0.63 per share for the first quarter of 2022, payable on March 30, 2022 to stockholders of record at the close of business on March 21, 2022. This is an increase of $0.01 per share from $0.62 per share distributed in the fourth quarter of 2021 and $0.60 per share distributed in preceding quarters.

Full Year 2021 Highlights1

  • Net asset value (“NAV”) for full year 2021 increased to $280.1 million ($28.88 per share) from $216.3 million ($28.77 per share) year-over-year, reflecting broad-based improvements in the debt portfolio investments and joint ventures.
  • Total investment income for full year 2021 increased to $80.1 million, of which $63.8 million was attributable to interest income from the debt securities portfolio. This compares to total investment income of $42.8 million in 2020, of which $31.4 million was attributable to interest income from the debt securities portfolio.
  • Excluding the impact of purchase price accounting, core investment income2 for the full year 2021 was $63.4 million, an increase of $24.3 million as compared to core investment income of $39.1 million in 2020
  • Net investment income (“NII”) for full year 2021 increased to $42.0 million ($4.92 per share) as compared to $17.0 million ($3.40 per share) a year ago.
  • Core NII3 for full year 2021 increased to $25.4 million ($2.97 per share) as compared to $13.3 million ($2.67 per share)1 a year ago.
  • Total investments at fair value (excluding derivatives) at December 31, 2021 was $550.0 million; when excluding CLO funds and Joint Ventures, these investments are spread across 30 different industries and 113 different entities, with an average par balance per investment of approximately $3.3 million. This compares to $487.7 million as of December 31, 2020, comprised of investments in 121 entities.
  • As of December 31, 2021, par value of outstanding borrowings was $352.4 million with an asset coverage ratio of total assets to total borrowings of 178{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. On a net basis, leverage as of December 31, 2021 was 1.01x.4
  • During the year, the Company redeemed in full the aggregate $77.4 million in principal outstanding of the 6.125{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Notes due 2022 on May 30, 2021; the aggregate principal amount outstanding of $28.75 million of HCAP’s 6.125{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Notes due 2022 were redeemed in full on July 23, 2021.
  • In the fourth quarter of 2021, the Company’s previously announced purchase of $18.1 million of portfolio of CLO assets in exchange for $1.4 million in cash and 556,852 shares of common stock issued at NAV closed in the fourth quarter of 2021.
  • During the year, the Company repurchased 75,377 shares, under its $10 million Stock Repurchase Program in open market transactions at an aggregate cost of approximately $1.8 million.
  • A 1-for-10 reverse stock split of the Company’s common stock was completed effective August 26, 2021.

Management Commentary

Ted Goldthorpe, Chief Executive Officer of Portman Ridge, stated, “We are pleased with our year end results and believe we are well-positioned as we look ahead to the new year. The year-over-year increase in net assets per share is a reflection of the strength of our portfolio. Our solid performance has allowed us to increase our quarterly distribution for a second quarter in a row to $0.63 per share. Overall, we have had a successful year and our goal is to continue to improve our portfolio performance, lower our cost of capital, and reduce expenses relative to our asset base. Furthermore, the expected speed and extent in the rise of interest rates should improve our gross investment income in the coming quarters, as the majority of our portfolio has a floating rate. We also expect future portfolio investments to predominately be floating rate investments.”

Select Financial Highlights

    For the Year Ended December 31,   For the Year Ended December 31,
($ in thousands)     2021       2020  
Total investment income     80,086       42,764  
Net Expenses     38,082       25,764  
Net Investment Income     42,004       17,000  
           
Net realized and unrealized (loss) gain on investments     (12,701 )     14,418  
Tax (provision) benefit on realized and unrealized (gains) losses on investments     (1,442 )     —  
Realized (losses) gains on extinguishments of Debt     (1,835 )     155  
Net Increase (Decrease) In Net Assets Resulting From Operations   $ 26,026     $ 31,573  
Net Increase (Decrease) In Stockholders’ Equity Resulting from Operations per Common Share—Basic and Diluted(1)   $ 3.05     $ 6.32  
Net Investment Income Per Common Share—Basic and Diluted(1)   $ 4.92     $ 3.40  
Weighted Average Shares of Common Stock Outstanding—Basic and Diluted(1)     8,536,079       4,998,759  
Distribution per share(1)   $ 0.63     $ 0.60  
           

(1)   The Company completed a Reverse Stock Split of 10 to 1 effective August 26, 2021. As a result, common shares and net asset value per common share information has been adjusted retroactively to reflect the split for periods prior to August 26, 2021.

       
    For the Year Ended
December 31, 2021		  
($ in thousands)    
Interest from investments in debt excluding accretion   $ 42,787    
Purchase discount accounting     16,644    
PIK Investment Income     4,345    
CLO Income     4,754    
JV Income     9,178    
Service Fees     2,378    
Total Investment Income     80,086    
Less: Purchase discount accounting     (16,644 )  
Core Investment Income     63,442    

Investment income for the years ended December 31, 2021 increased to $80.1 million, as compared to $42.8 million in 2020.

Interest income from investments in debt securities for the year ended December 31, 2021 increased to $63.8 million as compared to $31.4 million in the prior year. The increase in interest income was primarily driven by additions to the Debt Securities Portfolio through merger transactions, as well as an increase in the contractual interest rates on loans.

At December 31, 2021 and December 31, 2020, the weighted average contractual interest rate on our interest earning debt securities was approximately 8.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 7.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, respectively.

Investment Portfolio Activity

The composition of our investment portfolio at December 31, 2021 and December 31, 2020 at cost and fair value was as follows:

($ in thousands)   December 31, 2021   December 31, 2020
Security Type   Cost/Amortized
Cost		   Fair Value   {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}(¹)   Cost/Amortized
Cost		   Fair Value   {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}(¹)
Senior Secured Loan   $361,556   $364,701     66     $304,539   $328,846     68  
Junior Secured Loan     82,996     70,549     13       87,977     75,807     16  
Senior Unsecured Bond     416     43     0       416     208     0  
CLO Fund Securities     51,561     31,632     6       45,728     19,583     4  
Equity Securities     26,680     22,586     4       24,594     13,945     3  
Asset Manager Affiliates(2)   17,791     —     —       17,791     —     —  
Joint Ventures     64,365     60,474     11       54,932     49,349     10  
Derivatives     31     (2,412 )   —       31     (1,109 )   —  
Total   $605,396   $547,573     100 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}   $536,008   $486,629     100 {21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

¹        Represents percentage of total portfolio at fair value.
²        Represents the equity investment in the Asset Manager Affiliates.

As of December 31, 2021, seven of the Company’s debt investments were on non-accrual status. As of September 30, 2021, six of the Company’s investments were on non-accrual status. Investments on non-accrual status were 0.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 2.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the Company’s investment portfolio at fair value and amortized cost as of December 31, 2021, respectively, compared to 0.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 2.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} as of September 30, 2021.

Liquidity and Capital Resources

As of December 31, 2021, we had $352.4 million (par value) of borrowings outstanding ($347.2 million net of capitalized costs) with a weighted average interest rate of 3.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. This balance was comprised of $79.8 million of outstanding borrowings under the Senior Secured Revolving Credit Facility, $162.5 million of 2018-2 Secured Notes due 2029, and $104.9 million of 4.875{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Notes due 2026.

As of December 31, 2021, the Company had unrestricted cash of $28.9 million, restricted cash of $39.4 million, $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 stockholders’ equity at December 31, 2021 were $648.3 million and $280.1 million, respectively. Aggregate unfunded commitments stood at $47.9 million as of December 31, 2021.

As of December 31, 2021 and December 31, 2020 the fair value of investments and cash were as follows:

Security Type   December 31, 2021   December 31, 2020
Cash and cash equivalents   $ 28,919     $ 6,990  
Restricted Cash     39,421       75,913  
Senior Secured Loan     364,701       328,846  
Junior Secured Loan     70,549       75,807  
Senior Unsecured Bond     43       208  
CLO Fund Securities     31,632       19,583  
Equity Securities     22,586       13,945  
Joint Ventures     60,474       49,349  
Derivatives     (2,412 )     (1,109 )
Total   $ 615,914     $ 569,532  

Interest Rate Volatility

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

As of December 31, 2021, approximately 84{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. 75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of these floating rate loans contain LIBOR floors ranging between 0.50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 2.00{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

As of December 31, 2021, Portman Ridge had approximately $352.4 million (par value) of borrowings outstanding, of which approximately 31{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} had a fixed rate and 69{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} had a floating rate. Portman Ridge expects future portfolio investments to predominately be floating rate investments.

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 same5, 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     $ (1,153 )       $ 217         $ 1,671    
Decrease in interest rate     $ 256         $ 256         $ 256    

Conference Call and Webcast

We will hold a conference call on Friday March 11, 2022 at 9:00 am Eastern Time to discuss our fourth quarter and full year 2021 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 1949597.

A replay of this conference call will be available from approximately 12:00 p.m. Eastern Time on March 11 through March 18. The dial in number for the replay is (855) 859-2056 and the conference ID is 1949597.

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 Fourth Quarter and Full Year 2021 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 transaction 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 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
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

    December 31,
2021		     December 31,
2020		  
($ in thousands, except share and per share amounts)            
ASSETS            
Investments at fair value:            
Non-controlled/non-affiliated investments (amortized cost: 2021 – $479,153; 2020 – $445,901)   $ 452,482     $ 427,277  
Non-controlled affiliated investments (amortized cost: 2021 – $74,082; 2020 – $40,726)     74,142       40,503  
Controlled affiliated investments (cost: 2021 – $52,130; 2020 – $49,350)     23,361       19,957  
Total Investments at Fair Value, excluding derivatives (cost: 2021 – $605,365; 2020 – $535,978)     549,985       487,737  
Cash and cash equivalents     28,919       6,990  
Restricted cash     39,421       75,913  
Interest receivable     5,514       2,973  
Receivable for unsettled trades     20,193       25,108  
Due from affiliates     507       357  
Other assets     3,762       1,100  
Total Assets   $ 648,301     $ 600,178  
LIABILITIES            
2018-2 Secured Notes (net of discount of: 2021 – $1,403; 2020 – $2,445)   $ 162,460     $ 249,418  
4.875{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Notes Due 2026 (net of discount of: 2021 – $2,157; net of deferred financing costs of: 2021 – $951)     104,892       —  
Great Lakes Portman Ridge Funding LLC Revolving Credit Facility (net of deferred financing costs of: 2021 – $732; 2020 – $1,098)     79,839       48,223  
6.125{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Notes Due 2022 (net of deferred financing costs of: 2020 – $1,058)     —       75,668  
Derivative liabilities (cost: 2021 – $31; 2020 – $31)     2,412       1,109  
Payable for unsettled trades     5,397       —  
Accounts payable, accrued expenses and other liabilities     4,819       1,789  
Accrued interest payable     2,020       1,089  
Due to affiliates     1,799       1,375  
Management and incentive fees payable     4,541       5,244  
Total Liabilities     368,179       383,915  
COMMITMENTS AND CONTINGENCIES            
NET ASSETS            
Common stock, par value $0.01 per share, 20,000,000 common shares authorized; 9,867,998 issued, and 9,699,695 outstanding at December 31, 2021, and 7,609,349 issued, and 7,516,423 outstanding at December 31, 2020     97       75  
Capital in excess of par value     733,095       639,136  
Total distributable (loss) earnings     (453,069 )     (422,947 )
Total Net Assets     280,122       216,264  
Total Liabilities and Stockholders’ Equity   $ 648,301     $ 600,178  
NET ASSET VALUE PER COMMON SHARE (1)   $ 28.88     $ 28.77  

(1)   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

    For the Year Ended December 31,
($ in thousands, except share and per share amounts)      2021       2020       2019  
Investment income:            
Income from non-controlled/non-affiliated investments   $                3,591     $ 27,553     $ 12,205  
Income from non-controlled affiliated investments     8,947       10,065       10,324  
Income from controlled affiliated investments     5,170       4,263       3,750  
Interest from cash and time deposits     —       15       79  
Fees and other income     2,378       868       137  
Total investment income     80,086       42,764       26,495  
Expenses:            
Management fees     7,916       4,579       3,129  
Performance-based incentive fees     7,075       4,858       —  
Interest and amortization of debt issuance costs     13,644       10,284       8,261  
Compensation     —       —       3,689  
Professional fees     3,660       2,836       3,467  
Administrative services expense     3,219       1,941       1,244  
Other general and administrative expenses     2,568       1,823       2,201  
Lease termination costs     —       —       1,431  
Total expenses     38,082       26,321       23,421  
Management and performance-based incentive fees waived     —       (557 )     —  
Net Expenses     38,082       25,764       23,421  
Net Investment Income     42,004       17,000       3,074  
Realized And Unrealized Gains (Losses) On Investments:            
Net realized gains (losses) from investment transactions            
Non-controlled/non-affiliated investments     (4,397 )     7,120       (10,972 )
Non-Controlled affiliated investments     139       485       (12 )
Controlled affiliated investments     —       —       (4,635 )
Net realized gain (loss) on investments     (4,258 )     7,605       (15,619 )
Net change in unrealized appreciation (depreciation) on:            
Non-controlled/non-affiliated investments     (8,047 )     21,366       9,756  
Non-Controlled affiliated investments     282       (11,723 )     (6,208 )
Controlled affiliated investments     625       (1,755 )     (2,363 )
Derivatives     (1,303 )     (1,075 )     (64 )
Net unrealized gain (loss) on investments     (8,443 )     6,813       1,121  
Tax (provision) benefit on realized and unrealized (gains) losses on investments     (1,442 )     —       —  
Net realized and unrealized appreciation (depreciation) on investments, net of taxes     (14,143 )     14,418       (14,498 )
Realized gains (losses) on extinguishments of Debt     (1,835 )     155       (1,076 )
Net Increase (Decrease) In Net Assets Resulting From Operations   $ 26,026     $ 31,573     $ (12,500 )
Net Increase (Decrease) In Stockholders’ Equity Resulting from Operations per Common Share (1):            
Basic:   $                   3.05     $ 6.32     $ (3.32 )
Diluted:   $ 3.05     $ 6.32     $ (3.32 )
Net Investment Income Per Common Share (1):            
Basic:   $ 4.92     $ 3.40     $ 0.82  
Diluted:   $ 4.92     $ 3.40     $ 0.82  
Weighted Average Shares of Common Stock Outstanding—Basic and Diluted (1)     8,536,079       4,998,759       3,764,165  

(1)   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.

_______________________________________

1 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.
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 Core NII, or core net investment income, represents reported net investment income in accordance with U.S. GAAP, less the impact of purchase price discount accounting in connection with the GARS and HCAP mergers.  Portman Ridge believes presenting Core NII 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 NII is a non-U.S. GAAP measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. GAAP.  Instead, Core NII should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge’s financial performance.
4 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 $68.3 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.
5 See comment above about describing the terms and amount of the 4.875{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Notes issuance.

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Horizon Technology Finance Corporation Announces Offering of Common Stock

Horizon Technology Finance Corporation Announces Offering of Common Stock

FARMINGTON, Conn., March 9, 2022 /PRNewswire/ — Horizon Technological know-how Finance Corporation (Nasdaq: HRZN) (the “Enterprise” or “Horizon”) declared right now a proposed underwritten most important providing of 2,500,000 shares of its common inventory. In connection with the proposed featuring, the Business intends to grant the underwriters for the featuring a 30-day alternative to order up to an further 375,000 shares of the Company’s prevalent stock.

The joint-guide e-book-managing supervisors for the presenting are Morgan Stanley & Co. LLC and UBS Securities LLC, and the joint book-managing supervisor is Oppenheimer & Co. LLC.

The Corporation intends to use the web proceeds of this giving to repay its excellent debt borrowed below its revolving credit score facility delivered by KeyBank National Affiliation (the “Essential Facility”). Even so, via re-borrowing of the preliminary repayments less than its Crucial Facility, the Business intends to use the internet proceeds from this featuring to make investments in accordance with its investment decision aim and strategies explained in the prospectus nutritional supplement and the accompanying prospectus, to spend the Firm’s working expenditures and other dollars obligations, and for normal corporate reasons.

Traders are suggested to meticulously look at the financial investment goal, hazards, fees and expenses of the Business in advance of investing. The preliminary prospectus dietary supplement dated March 9, 2022 and the accompanying base prospectus dated July 21, 2021 contains this and other data about the Organization and ought to be read through diligently ahead of investing. The information in the preliminary prospectus dietary supplement, the accompanying prospectus and this push release is not complete and might be improved.

The offering may perhaps be made only by implies of a preliminary prospectus health supplement and an accompanying prospectus, copies of which may well be acquired from (1) Morgan Stanley Co. LLC, Attn: Prospectus Division, 180 Varick Street, 2nd Floor, New York, NY 10014, or (2) UBS Securities LLC, Attention: Prospectus Office, 1285 Avenue of the Americas, New York, New York 10019, Phone: 888-827-7275, or by email at ol-prospectusrequest@ubs.com.

This press release does not represent an offer to provide or the solicitation of an offer you to buy the securities in this featuring or any other securities nor will there be any sale of these securities or any other securities referred to in this push release in any condition or jurisdiction in which these kinds of give, solicitation or sale would be unlawful prior to the registration or qualification under the securities legislation of this sort of point out or jurisdiction.

About Horizon Technology Finance

Horizon Technological know-how Finance Company (NASDAQ: HRZN) is a leading specialty finance organization that offers cash in the type of secured loans to undertaking capital backed corporations in the technological know-how, life science, healthcare information and expert services, and sustainability industries. The investment objective of Horizon is to optimize its expenditure portfolio’s return by making recent cash flow from the credit card debt investments it would make and cash appreciation from the warrants it receives when producing these types of personal debt investments. Headquartered in Farmington, Connecticut, Horizon also has regional places of work in Pleasanton, California, and expense pros located in Portland, Maine, Austin, Texas and Reston, Virginia.

Forward-Hunting Statements

Statements provided herein may constitute “forward-hunting statements” inside of the meaning of the Non-public Securities Litigation Reform Act of 1995. Statements other than statements of historic info provided in this press release may constitute ahead-searching statements and are not guarantees of long term overall performance, situation or results and involve a selection of pitfalls and uncertainties. Genuine final results may perhaps differ materially from those people in the ahead-searching statements as a consequence of a amount of things, which include people explained from time to time in the Firm’s filings with the Securities and Trade Fee. Horizon undertakes no responsibility to update any forward-seeking assertion made herein. All forward-hunting statements talk only as of the date of this press release.

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Source Horizon Technological innovation Finance Company

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The 10 most innovative finance companies of 2022

The 10 most innovative finance companies of 2022

Explore the full 2022 list of Fast Company’s Most Innovative Companies, 528 organizations whose efforts are reshaping their businesses, industries, and the broader culture. We’ve selected the firms making the biggest impact with their initiatives across 52 categories, including the most innovative personal finance, security, and data science companies. ​​

This year’s most innovative finance companies are using technology to automate operations, using capital to fight climate change, and using data to fight fraud and improve credit.

Ramp, a corporate card, gives companies personalized control over when and where employees spend their budgets and also flags items like duplicate expenses, helping companies save money. Spiff, which automates sales commissions, and FloQast, which automates accounting workflows, are also designed for CFOs and their teams.

To lower carbon emissions, GoodLeap provides financing to homeowners looking to electrify their homes with solar panels, batteries, and more. Hannon Armstrong, meanwhile, has quietly become an important player in financing large-scale carbon offset projects, like wind farms.

To combat e-commerce fraud, Forter takes a network-based approach, scanning transactions at brands including Nordstrom and Priceline to look for systemic patterns.

Esusu and Karat Financial are taking a nontraditional approach to credit. Esusu partners with landlords to count renters’ monthly payments toward their credit scores. Karat, a Y Combinator graduate, serves entrepreneurs in the creator economy by using their followers and other social metrics as inputs in its credit model. Then there’s Aon, which is helping companies properly value and insure their IP—in many cases, their most important asset.

1. Ramp

For programming corporate expense rules down to the merchant level

Barely a year after its launch, Ramp is the fastest-growing corporate card in the United States. Its 2,000 enterprise customers—from the real estate broker Douglas Elliman to the creative agency Red Antler—use Ramp to consolidate corporate cards, expense management, bill payment, and more into one Slack-integrated platform. Ramp gives businesses the ability to build custom parameters into their cards, making it easy for its customers to keep costs in check and enforce expense policies. Last July, for example, Ramp became the first credit card able to program cards at the merchant level, so companies can either restrict a card’s use with specific vendors or to create an approved list of the only vendors where charges can be made. The company claims that one-third of its customers switched over from American Express, and 90{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} have adopted Ramp as their comprehensive spend-management platform. Ramp earns a fractional fee off every transaction, and when you’re talking about a card that hit $1 billion in annualized spend less than 15 months after launch, those tiny fees add up. Ramp completed its second and third funding rounds in February and August of 2021, raising a total of $415 million.

Ramp is No. 25 on this year’s list of the World’s 50 Most Innovative Companies.

2. GoodLeap

For bounding from rooftop solar loans to efficient HVAC, geothermal heating, and more

GoodLeap, led by a former SolarCity executive, has become the country’s biggest rooftop solar financing provider in just three years by effectively serving as a bridge between homeowners, lenders, and installers. Last year, the company made more moves to gain traction in the $430 billion market for sustainable home upgrades in the United States. In June, GoodLeap announced that it was rolling out a slew of new products (resilient roofing, efficient HVAC, geothermal heating, and water-saving landscaping) onto its platform, enabling homeowners to bundle more projects into a single loan. The San Francisco-based company uses its own underwriting engine to expedite approval processes and provide homeowners with flexible payment plans, potentially expanding its pool of customers. Last July, GoodLeap announced its first securitization to include both residential solar and sustainable home improvement loans—$417 million worth. Sponsored by Credit Suisse affiliate Lime Residential, the move enhances GoodLeap securities, in the form of bundled loans, as attractive options for institutional investors seeking assets to add to their ESG (Environmental, Social, and Governance) portfolios. Before the end of the year, GoodLeap announced that it had funded over $10 billion in residential solar and sustainable home improvement projects, including $4.8 billion in 2021 alone.

GoodLeap is No. 30 on this year’s list of the World’s 50 Most Innovative Companies.

3. Forter

For being the anti-fraud bodyguard for e-commerce merchants

E-commerce fraud cost retailers more than $20 billion in 2021, in addition to creating headaches for consumers subject to account takeovers or identity theft. Forter helps its customers, which include Nordstrom, Asos, and Instacart, prevent fraud and protect the identities of more than a billion global shoppers through its AI-powered platform that focuses on individual consumer behavior patterns rather than rules that may wind up discriminating against certain kinds of consumers (such as those shopping from an area deemed “high crime.”) In March 2021, in partnership with Capital One, Forter launched Trusted Authorization, which gives merchants a direct connection with issuing banks and offering them access to Forter’s fraud insights, reducing false declines. Two months later, Forter extended its fraud-prevention platform to payment service providers (third-party companies like Stripe or Square that facilitate transactions between merchants and banks). The company also released two other new products for merchants last year, one aimed at protecting rewards programs from fraud, another to help spot abusive returns practices. Over the last 18 months, Forter has doubled the number of merchants in its global network—which represent more than $250 billion in annual online transactions—and increased annual revenue by 130{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

4. Hannon Armstrong

For betting on pro-climate returns

Hannon Armstrong is one of the largest and most established climate investors, with a portfolio worth $3.2 billion. Long before climate tech came into vogue, the firm has been backing projects in solar, wind, and other elements of green infrastructure that will reduce carbon emissions and increase resilience to climate change. Since 2013, Hannon Armstrong has delivered a 576{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} total return to its investors, and in 2021, the company made many significant new renewable energy investments, including $20 million in the Bluestone Solar project in Chase City, Virginia, and $62 million in Blackrock Wind Farm in West Virginia. Both projects aim to help diversify the energy economy of the region.

5. Aon

For unlocking the value of IP

Half a century ago, intangible assets, such as trademarks, patents, and licensing agreements, comprised less than 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the value of companies in the S&P 500; today, that bundle of rights accounts for 90{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Determining those values, though, can be fraught, not to mention a cumbersome drain on resources. In November 2020, the IP valuation division of Aon, the $64 billion market-cap insurance giant, released a new tool to streamline the process. The Quality of Intellectual Property (QoIP) platform helps deal teams accelerate their ability to construct clear and compelling IP-value narratives. The QoIP catalogs a company’s entire portfolio of patents, trademarks, trade secrets, brand assets, and so forth, highlighting protected valuable technologies and competitive advantages. Aon’s new service also predicts future revenue streams and benchmarks IP quality versus competitors. Last July, Aon constructed an IP insurance policy for Entrinsic Bioscience that enabled the biotech company to secure $49 million from Jefferies Group in non-dilutive capital, one of the seminal benefits of Aon’s solution. Shavelogic, an upstart men’s grooming brand, used a similar strategy to value its 150-plus patents, helping it raise $100 million in September 2021.

6. Relay Payments

For connecting supply chains with faster transactions

This past year has made alarmingly clear that our supply-chain infrastructure is in crisis. Relay Payments solves one piece of the puzzle, modernizing payment processes in a segment of the freight industry that has thus far lagged in its adoption of digital transactions. Focusing quite literally on where the rubber meets the road, the Atlanta-based company has developed an electronic payment system aimed at freight handlers, shippers, carriers, and third-party logistics companies. Relay’s platform enables rapid, secure, contactless transactions right at the shipping dock and has been embraced by key companies such as Coyote Logistics, Great Lakes Transport, Old Dominion Freight Line, and Southeastern Freight Lines. Relay doubled its number of clients this past year, and the platform is processing more than 250,000 transactions a month.

7. Spiff

For automating the tedium of tracking sales commissions

As global business—and its patchwork quilt of tax regulations—gets ever more complex, paying out commissions has become a fraught process that pits sales teams against finance departments. Four-year-old Spiff automates commission payments, simplifying workflows for financial teams and helping sales reps get paid correctly and on time. In October 2021, the company released a top-to-bottom redesign of its flagship product, the Spiff Commission Designer, featuring an intuitive interface that resembles a typical spreadsheet but is backed with low-code/no-code automation and can pull in disparate info from across customer relationship management or enterprise resource-planning platforms. In 2021, Spiff nearly doubled its customer base and increased annual revenue by a multiple of four.

8. FloQast

For being a CFO’s BFF before an IPO

FloQast enables controllers and their teams to automate workflows and prepare for audits—like Slack if it were just for accountants. Last year, the company introduced FloQast Ops, a workflow manager that enhances collaboration by increasing transparency across the accounting operation—accounts payable, sales, accounts receivable, compliance, and reporting—as well as ReMind, which enables accountants to automate the request and collection of information required to complete reports and audits. FloQast has 1,400 global customers, including Roblox, Sonos, and Zoom, and it has become an essential tool for companies preparing to go public. The company claims that it has helped 50 startups on their road to an IPO.

9. Esusu

For boosting renters’ credit scores with every payment

Esusu, founded in 2018, creates financial tools designed to help the 45 million Americans it describes as “credit invisible,” meaning that they don’t have the kind of recurring payments such as student loans that traditionally build good credit. Last year Esusu introduced a new rent-reporting credit building tool: For an annual fee of $50, renters can opt in to have current and even their prior two years of rent payments reported to the credit bureaus. (If a renter is late on a payment, Esusu unenrolls them rather than sending information. Landlords can also choose to offer to pay the annual fee as an inducement to attract reliable strivers and fill empty units.) The company works with more than a third of the largest property managers in the United States. One of them, the Promise Homes Company, reported that 87{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of its residents had improved their FICO scores by an average of 21 points. After successfully helping 2,300 Esusu users living in one of Related Companies’ affordable housing units, Related extended its relationship with Esusu last November, offering all 50,000 of its affordable-housing residents free reporting of on-time rent payments to the three major credit bureaus. That same month, Freddie Mac created incentives for more property owners to use Esusu, offering to pay closing costs on loans if they use Esusu. In January, the company raised a $130 million Series B, giving it a $1 billion valuation.

10. Karat Financial

For transforming a creator’s social followers into working capital

While working as a product manager at Instagram, Eric Wei kept encountering people running accounts who were generating healthy annual incomes through advertising and sponsorships but would fail to qualify for credit cards or would be refused apartments, because traditional banks didn’t understand their business as a digital creator. Wei and former banking analyst Will Kim founded Karat Financial to meet the unique financial service and wealth management needs of this emerging class, which is estimated to generate at least $20 billion in economic activity globally. Karat gives creators (who as of the end of 2021 have to be referred by an existing customer or apply) a credit card whose spending limit is determined in part by their social following. The Karat Black Card, which has become a cultural signifier among the creator class for Karat’s custom laser etchings, is a no-fee, interest-free credit card that offers 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} cash back on business-related purchases such as gaming or streaming equipment. (Karat generates revenue from merchant fees on cardholders’ purchases.) Karat reports that its average client has 1.8 million followers and annual income in excess of $500,000. It supports them with both a dashboard to track all their spending and data insights from its aggregated intelligence, such as sharing that its customers’ Instagram followers are worth 77 cents each, 10 times more than TikTok followers. Karat has also built out a financial literacy program that offers creators workshops on accounting basics, scaling their businesses, and whether they should be a limited liability corporation. It also has an on-staff certified financial planner for its customers. The company’s creators, who almost always cite that they had trouble getting credit with even card issuers focused on startups, include the DJ 3LAU, Twitch chess phenom Alexandra Botez, and real-estate influencer Graham Stephan; a dozen Karat holders earned a Streamy Awards nomination in 2021.

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How the Ukraine war could boost China’s global finance ambitions

How the Ukraine war could boost China’s global finance ambitions

Sanctions levied in reaction to Russian president Vladimir Putin’s invasion of Ukraine have dealt a devastating blow to his country’s fiscal technique and remaining the rouble down far more than 30 for each cent this year, sending ripples across currencies in japanese Europe.

But the renminbi, the currency of Russia’s closest strategic ally and leading buying and selling associate, has remained conspicuously stable.

China’s forex has scarcely budged due to the fact Russia’s invasion started, even touching a 4-12 months higher of about Rmb6.31 towards the greenback, extending a months-very long operate of resilience inspite of a new slowdown in the development of China’s economy.

Its relative security has fuelled talk that the forex could turn into a haven asset, shielded from the geopolitical turbulence that has roiled markets about the planet. This would be a raise to far more than 20 many years of operate by Beijing to globalise its currency by increasing its use in international trade and as a retail outlet of value in intercontinental finance.

“We are in a stage where by the marketplace is no more time wanting at the renminbi as a highly speculative currency,” reported Kelvin Lau, senior economist for Better China at Normal Chartered, adding that its new security was probably to increase its popularity as a haven in times of anxiety.

What does this have to do with the dollar and the wider financial process?

Wider usage of the renminbi throughout the world would, theoretically, make it much easier for China to crack what it views as US and western dominance in world wide payments and finance — ability that has been wielded in new days to punish Russia.

There are signs of progress: in the latest months, the Chinese currency eventually pipped Japan’s yen in Swift’s global payments rankings to just take fourth place for the first time. Meanwhile, a renminbi globalisation index published by Normal Chartered showed its international standing has surged to a file high.

But China’s true ambition is to go outside of dependence on western-controlled fiscal infrastructure this kind of as Swift, from which Russia has been partly excluded. That is why it has spent a long time setting up out its renminbi-denominated Cross-Border Interbank Payments Process (Cips), by way of which payments rose about 20 per cent to Rmb45.2tn ($7.1tn) in 2020.

Cips has about 1,200 member institutions across 100 countries and remains a relative lightweight in global payments in contrast with Swift, which has about 11,000 associates. But Russia’s possess cross-border clearing process is considerably considerably less made, with about 330 institutions signed up throughout considerably less marketplaces like Cuba, Armenia, Kazakhstan and Iran.

Line chart of Dollar exchange rate (indexed to 100) showing China’s currency shrugs off the Ukraine crisis

Chinese media have flagged the opportunity offered by the Swift ejections, with state information agency Xinhua noting that “Russian economical establishments kicked out of Swift may have to participate in China’s Cips” in gentle of the minimal use of Russia’s homegrown clearing program.

And as payment networks Visa, Mastercard and American Specific have announced plans to suspend functions in Russia, far more of the country’s banks have also floated the possibility of issuing co-badged playing cards joined to both of those Russia’s Mir and China’s UnionPay intercontinental payments programs.

Benjamin Cohen, a veteran tutorial of intercontinental financial relations, stated there was “no question” sanctions towards Russia would further more incentivise nations these as Iran, North Korea and Venezuela to diversify absent from the dollar.

“Every time the US and its allies make accessibility to the greenback a weapon, it produces an extra incentive for the Chinese to choose benefit at some position,” said Cohen. “It’s not a case of the Chinese wolf at the door [of US dollar hegemony], it is more a circumstance of termites in the woodwork.”

This is in holding with China’s longstanding ambitions.

“The activities of the earlier couple days will give a fillip to those people nations and establishments that want to bypass the greenback-dependent international fiscal program,” said Eswar Prasad, economist and previous head of the IMF’s China division.

Why does China want to internationalise the renminbi?

Beijing’s wish for a international forex on a par with the greenback is a long time old but was reinvigorated in the early 2010s when US sanctions on Iran highlighted China’s personal vulnerability to systemic monetary punishment by western powers.

China launched Cips as a renminbi-based rival to Swift in 2015, following Russia was strike with sanctions around its invasion of Crimea the prior 12 months.

“Only immediately after the crisis in Crimea did China speed up the speed of renminbi internationalisation,” mentioned Bruce Pang, head of investigation at China Renaissance.

Line chart of StanChart’s Renminbi Globalisation Index showing Renminbi internationalisation surges in 2022

That bigger openness backfired in 2015, when a one particular-off devaluation of the renminbi by China’s central bank spurred unparalleled money flight and a protracted fall for the currency. The rout finished only when Beijing enacted difficult cash controls that continue to be mostly in location.

Tommy Wu, main China economist at Oxford Economics, mentioned Beijing experienced acquired from its blunders but would really feel renewed tension to enhance the currency’s worldwide job following current sanctions from Russia.

“Beijing will have a lot more of a sense of urgency now,” said Wu. “But they however have to glance at what took place in the past and what they can actually do realistically.”

How significantly is the renminbi now woven into Russia?

Considering the fact that Russia launched its invasion of Ukraine, China has been excellent amongst major international economies in abstaining from sanctions or even direct criticism. That is simply because a great deal is at stake on both of those sides preserving cordial Sino-Russian relations.

Russia is an essential supplier of oil and normal gasoline to China, and Moscow and Beijing have built removing the US greenback from their trade settlements a precedence since 2014, in response to blowback from the west to Russia’s invasion of Crimea. The two countries’ central banking institutions signed a forex swap arrangement that year, and it was not too long ago renewed for Rmb150bn.

By the initial quarter of 2020, the greenback’s share of Sino-Russian trade experienced fallen beneath 50 for each cent for the 1st time, in accordance to Russia’s central financial institution, though the rouble and renminbi’s put together share of settlements had risen to about a quarter.

That is a significant and developing sum: bilateral trade rose far more than a 3rd to almost $150bn final year, according to Chinese customs. In February, the two nations pledged to enhance the overall to $250bn even though Putin was browsing Beijing for the Wintertime Olympics, where he revealed new oil and fuel specials with China really worth a lot more than $117bn.

The renminbi also occupies a huge chunk of Russian international reserves many thanks partly to a 2019 agreement allowing China to acquire Russian gas in its very own currency. A January report from Russia’s central lender confirmed renminbi assets worthy of $73bn at 13 for every cent of overall reserves.

How considerably may well China go to assist Russia?

Analysts say the scope of sanctions on Russia so considerably could enable China to use its renminbi-based mostly payments infrastructure to help circumvent actions intended to reduce off Moscow from world wide finance.

Chinese financial institutions with an international presence were being unlikely to rush to Russia’s support, mentioned Wu, but more compact domestic loan companies not reliant on dollar-dominated western finance could provide renminbi expert services and Russian establishments could conceivably route world transactions via China’s sprawling condition-run coverage banks.

Nonetheless, Pang mentioned that considerations more than extreme retaliation from western countries — which include attainable sanctions on China by itself — would critically restrict Chinese fiscal institutions’ skill to offer more significant aid to Russia.

“That’s why China’s major financial establishments have complied with prior US sanctions on Iran and Russia,” he claimed. “China has to cautiously take care of the pace of executing this and not give western nations around the world any excuses for sanctions, bans or boycotts.”

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U.S. finance firms urged to sever ties with Russian oil

U.S. finance firms urged to sever ties with Russian oil

BP, for instance, announced Sunday it would exit its virtually 20 percent stake in Rosneft, a state-controlled oil enterprise (Energywire, March 1).

Now, environmentalists want Western finance firms to do the exact same. They say major financial commitment banking companies with stakes in Russia and its largest emitters should abide by fit to even further squeeze Russian President Vladimir Putin and his nation’s financial system. Executing so, they incorporate, also can enable the corporations mitigate economic chance.

Choose JPMorgan Chase & Co.

In accordance to information from Rainforest Action Network, the Wall Street huge is the biggest global banker of Gazprom, a further condition-owned electrical power firm. Concerning 2016 and 2020, the group states, the agency supplied the firm with about $3.5 billion in financing.

UniCredit SpA, a European commercial lender and Gazprom’s up coming greatest banker, arrived next at more than $2.3 billion, and was followed by Sberbank, Deutsche Lender AG and Crédit Agricole, which are based mostly in Russia, Germany and France, respectively. Aside from JPMorgan, no other major U.S. banking institutions have been in the top 10.

“There are so several corporate connections to Russia. But this just feels like a truly significant a single that hasn’t gotten much, if any, notice. Gazprom is the biggest Russian oil and gas firm, and their No. banker is JPMorgan Chase,” mentioned Jason Disterhoft, who prospects Rainforest Action Network’s fossil gasoline funding marketing campaign.

“It feels like a thing really worth contacting out,” Disterhoft included, in particular supplied governments’ and other companies’ mounting initiatives to exit the place. “In the context of everything heading on, they ought to be accountable.”

Citigroup Inc. also is beneath fire for its typical investments in Russia and its role as a so-known as depositary bank for Lukoil, one more Russian oil and gasoline huge.

In accordance to Citi, the work involves offering a “corporate governance seal of approval” to assist corporations access international money and reassure buyers that all those companies are harmless investments.

The bank’s once-a-year investor working day was held Wednesday. In response, advocacy groups together with Extinction Rebel NYC, New York Communities for Modify, Financial institution On Our Foreseeable future and Amazon Check out held a demonstration at Citi’s New York Metropolis headquarters to spotlight that connection and to simply call on the agency to close it for ethical-, local weather- and risk-related factors.

“Frankly, every greenback invested in Russian oil and gas supports Putin’s war of aggression, and his capability to wage long term wars of aggression. So which is the ethical implication,” Grace Regullano, a coordinator at Lender On Our Foreseeable future, claimed in an job interview.

“On the trader side,” Regullano additional, “continued financial investment in Russian oil and gas signifies sizeable hazard for Citigroup investors.”

A spokesperson for JPMorgan declined to respond to advocates’ concerns. A Citi spokesperson also declined to comment on advocates’ problems, but did reference a recent community disclosure that reported the firm’s publicity to Russia makes up just .3 p.c of its overall property.

Clark Williams-Derry, an analyst with the Institute for Electrical power Economics and Monetary Evaluation, agreed in theory that JPMorgan and other economic establishments have just about every reason to consider a hard glance at their Russian investments and relationships — including in the electricity sector.

But he did increase a noteworthy caveat when it comes to JPMorgan particularly: “The money has by now gone to Gazprom, so by canceling those people loans basically it is like saying, hey, you never have to repay individuals loans,” Williams-Derry claimed.

For that cause, he thinks the very best course of motion would be for JPMorgan to establish a “giant monetary no-fly zone” about Russia moving ahead.

“Even if you are disregarding weather fears, the possibility profile for Russia is so higher … that a bank like JPMorgan should really be cautiously reassessing just about every one buying and selling and banking relationship with just about every one Russian business, starting up with the fossil fuel firms,” he claimed.

Notably, MSCI ESG Exploration LLC downgraded Russia’s ecosystem, social and governance rating to the second-cheapest amount this week. Those rankings are meant to replicate how governments’ skill to control their organic methods, workforce, money devices and more might affect the “long-term sustainability and competitiveness of its economic system.”

Apart from downgrading Russia’s ranking, MSCI also claimed it is monitoring the expense outlook of Russian equities given mounting financial sanctions in opposition to the place.

JPMorgan, meanwhile, introduced that new personal debt issued by sanctioned Russian entities will not be suitable for the firm’s investment indices, and that it is mulling the possibility of eradicating Russia from its ESG fund suite.

Matthew Moscardi, a former executive director at MSCI, chalked the moves up to the firms responding to economic sanctions and logistical difficulties introduced on by key exchanges about the world halting the trading of Russian stocks.

‘Private sector equal of sanctions’

Advocates are not just targeting JPMorgan and Citi.

Environmentalists at Stand.earth revealed research this week that highlighted some of the world’s greatest cash managers’ investments in Russian oil and fuel. The group explained 7 corporations like JPMorgan, BlackRock Inc., the Vanguard Team Inc. and Condition Avenue Corp. have investments worth $5.8 billion in Russian oil and gas — and referred to as on them to exit people investments.

“Oil and gas exports from Rosneft, Gazprom, and Lukoil are essential to Russia’s ability to fund its armed forces, and its ability to retain leverage in world-wide politics,” the team argued.

In turn, they claimed the mammoth prosperity managers, which count on passive investment decision indexes that include firms in each individual sector across the economy, “can make a actual change by divesting from Rosneft, Lukoil, Gazprom, and the other Russian carbon majors that make up Putin’s war chest.”

Pavel Molchanov, an electrical power analyst with Raymond James & Associates Inc., stated that course of motion would mainly be symbolic since shifting shares from one particular owner to one more commonly does not have economic repercussions for the underlying firm.

But if corporations such as JPMorgan were to deny Russian corporations banking or insurance coverage services, he wrote in an electronic mail, that would be a “much extra direct means of action.”

“In essence, this is the personal-sector equivalent of sanctions,” Molchanov said. “Just as foreign central banks will no longer cooperate with Russia’s central lender in reaction to Russia’s invasion of Ukraine, it would be a huge deal for significant worldwide industrial financial institutions to prevent operating with Gazprom, Rosneft or Lukoil.”

Spokespeople for BlackRock and State Street did not respond to a ask for for remark.

Vanguard spokesperson Michael Nolan wrote in an email that the company is “reviewing the several international sanctions and analyzing the impacts to our funds, and will comply with applicable sanctions and federal government orders.”

Correction: A past edition of this post misstated the affiliation of Grace Regullano and the companies guiding the demonstration at Citi. Even though Regullano operates for the Sunrise Task, Sunrise spokesperson Jason Schwartz said in this instance she was talking in her capability with Bank On Our Long run. Schwartz also clarified that the Sunrise Undertaking was not associated in organizing the Citi protest.

A variation of this report initial ran in E&E News’ Climatewire. Get entry to more thorough and in-depth reporting on the energy changeover, purely natural assets, climate adjust and a lot more in E&E Information.