• United Air Is Said to Ready $5 Billion Debt Sale for Next Week

    United Air Is Said to Ready $5 Billion Debt Sale for Next Week(Bloomberg) — A group of banks led by Goldman Sachs Group Inc. may launch a $5 billion debt offering for United Airlines Holdings Inc. as soon as Monday, according to people with knowledge of the matter.Goldman Sachs has started discussions with investors to gauge their level of interest, said the people, who asked not to be named because the talks are private. Early unofficial pricing discussions for a bond that could have a maturity of seven or eight years are for a yield of about 7%, the people said.United is tapping its frequent-flyer program for the deal, the company’s biggest debt sale since the pandemic. The offering may also include leveraged loans and the debt could have one investment-grade rating, Bloomberg previously reported. Talks on the terms of the offering are preliminary and could change, the people said. Representatives for Goldman Sachs and United declined to comment.Goldman, Barclays Plc and Morgan Stanley committed to provide the financing to United in exchange for a claim on MileagePlus, the loyalty program the airline established in 1981, according to a company presentation. Since the banks have underwritten the debt, they will be eager to begin marketing and offload it to investors soon, according to the people.Read more: United’s banks map debt plan that shields frequent-flyer programUnited nixed an effort to sell $2.25 billion of junk bonds last month because it wasn’t satisfied with the terms. Some investors balked at the aging fleet of jetliners pledged as collateral.Since then, companies rushing to shore up cash during the Covid-19 pandemic are fueling the most active June ever in the U.S. junk-bond market. Borrowers have raised about $45.5 billion, making it the busiest month since $46.4 billion was sold in September 2013, according to data compiled by Bloomberg.American Airlines Group Inc. is looking at raising around $2 billion from a junk bond offering that may emerge as soon as next week, according to other people with knowledge of the matter.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • Why today could be the best investment opportunity in over 10 years

    assortment of office stationery and folders with label saying game changer, investment opportunity

    The uncertain economic outlook caused by coronavirus may not make today appear to be the best investment opportunity in a decade. After all, it is likely that many businesses will experience a period of lower profitability that negatively impacts on investor sentiment.

    However, with policymakers across the world having announced major stimulus programs, an economic recovery could be ahead in the coming years. As such, the stock market could deliver a strong recovery from its low valuation – just as it did following the global financial crisis over ten years ago.

    Stimulus packages

    The scale of the economic challenges posed by lockdowns over recent months has prompted policymakers to introduce major stimulus packages. For example, the United States Federal Reserve has slashed interest rates to zero and introduced an ‘unlimited’ quantitative easing program.

    Together, these policies create additional liquidity for businesses and encourage spending rather than saving. They could help to stimulate the world’s largest economy, while similar policies announced across other countries could also improve the outlook for global GDP growth in the coming years.

    Similar policies, albeit on a smaller scale, were introduced during the global financial crisis. They had a positive impact on asset prices, and sparked a bull market that lasted for over a decade. As such, the outlook for the stock market could be much more positive than recent corporate earnings and economic data suggests.

    Low valuations

    At the present time, many companies trade on low valuations. This is unsurprising, since a wide range of sectors are currently experiencing highly challenging trading conditions that are causing a severe decline in sales and profitability.

    It may seem unlikely that valuations across the stock market will recover, due to an uncertain outlook. This feeling was also present during the global financial crisis, as well as in the midst of previous economic crises. However, the best investment opportunities have often occurred when the economic outlook is at its most precarious. Valuations are at their lowest ebb at such times, and investors can access wide margins of safety.

    Clearly, it is not possible to know that valuations are at their lowest ebb at the present time. But many companies currently offer wide margins of safety that are unlikely to persist over the long run. As such, taking advantage of low valuations today could be a shrewd move.

    A volatile recovery

    Of course, the stock market is very unlikely to experience a smooth or fast recovery. It can take many years for stock prices to return to their previous highs, and investor sentiment can be highly volatile in the meantime.

    However, investors who are able to buy stocks today and hold them for a prolonged period of time may generate high returns. The stock market’s track record of recovery from its deepest declines and vast stimulus packages recently introduced mean that now could be the best investment opportunity since the last global downturn over a decade ago.

    For more investment opportunities in the current market, check out the free report below.

    5 ASX stocks under $5

    One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.

    Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!

    *Extreme Opportunities returns as of June 5th 2020

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    Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Why today could be the best investment opportunity in over 10 years appeared first on Motley Fool Australia.

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  • China plans to accelerate U.S. farm purchases following talks in Hawaii

    China plans to accelerate U.S. farm purchases following talks in HawaiiChina will accelerate purchases of American farm goods. Yahoo Finance’s Jessica Smith shares the details.

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