Author: therawinformant

Baird PWM Market Strategist Michael Antonelli joins Yahoo Finance’s On The Move panel to discuss the signs of an economic rebound.

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Yahoo Finance’s Alexis Christoforous and Brian Sozzi discuss what’s moving the markets with Chief Strategist
Michael Lee, around Monday’s opening bell.

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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial […]

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Tesla CEO Elon Musk set a date for Battery Day, which will be combined with Tesla’s annual shareholders meeting. Yahoo Finance’s Brian Sozzi, Alexis Christoforous, and Heidi Chung discuss.

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HealthInvest Partners AB is the investment management company of HealthInvest Small & MicroCap Fund. HealthInvest Partners recently released its April month Investor Letter, a copy of which you can download here. HealthInvest Small & MicroCap Fund rose 9.1% in April, which was broadly in line with its benchmark index. You should check out HealthInvest Partners […]

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Yahoo Finance’s Emily McCormick joins The First Trade to discuss the impact of rising coronavirus cases on the U.S., China Supply chain.

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(Bloomberg) — American Airlines Group Inc. launched a $2 billion junk-debt offering on Monday as it looks to shore up liquidity amid a hesitant return to flying during the pandemic.The company is marketing a $1.5 billion secured junk bond maturing in 2025 and a $500 million four-year loan, according to people with knowledge of the matter. Based on initial discussions with investors, the loan is being offered at a spread of 9.5 percentage points over the London interbank offered rate and at a discount of between 95 cents to 96 cents on the dollar, said the people, who asked not to be named discussing a private transaction.The debt will be secured by slots, gates and routes across the world in the United States, Latin America, Asia, and Europe. The company was sounding out investors last week for a potential five-year secured note at a yield of 11%, according to other people familiar with the matter.The debt package is part of a larger $3.5 billion financing that also includes $750 million of new shares, which are expected to trade on Tuesday, and $750 million of senior convertible notes due in 2025. American dropped 4.1% to $15.34 at 09:51 a.m. in New York, the biggest decline on a Standard & Poor’s index of major U.S. airlines..Read more: American Air slumps after announcing $3.5 billion financing planThe junk bond, which cannot be repaid for the life of the deal, includes a rare provision where the company must meet a minimum collateral coverage ratio. If American Airlines doesn’t, the company is required to pay a special interest penalty of 2% until compliance is restored.Calls with loan and bond investors are scheduled for 10 a.m. in New York. The junk bond may be sold as soon as Wednesday, with commitments for the loan due the same day. Citigroup Inc. is leading both financings.American, the most debt-laden of the largest U.S. airlines, is seeking the financing to help it get through a collapse in travel demand stemming from the outbreak. The debt and equity raise is a divergence from the company’s recent reliance on federal aid as Covid-19 suppresses travel demand.Proceeds from the debt will refinance a $1 billion 364-day term loan the company raised from banks in March, with the remaining used to enhance the company’s liquidity, according to a news release.(Updates with share price in fourth paragraph.)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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Yahoo Finance’s Brian Sozzi and Alexis Christoforous speak with Dr. Anand Parekh, Bipartisan Policy Center Chief Medical Advisor, about President Trump’s surprising comments at his rally in Tulsa, and the recent spike in coronavirus cases.

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Jun.22 — None of Wirecard AG’s missing $2.1 billion of cash entered the Philippine financial system, according to the nation’s central bank, after two of its major lenders denied holding funds for the German payments processor. Wirecard said the missing cash on its balance sheet probably doesn’t exist. Su Keenan reports on “Bloomberg Markets: Asia.”

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(Bloomberg Opinion) — Following Wirecard AG’s confirmation on Monday that 1.9 billion euros ($2.1 billion) of the cash it reported probably doesn’t exist, the question arises whether the German electronic-payments group will survive in its present form.Even if Wirecard can avoid a liquidity crunch, there’s the issue of whether a fintech can hang onto its customers and partners after revealing such an epic failure of internal controls and risk management. The company authorizes and processes electronic payments for both business clients and consumers, so trust is essential. New boss James Freis will have to keep creditors at bay, and overhaul a rotten corporate culture. The stock has plunged 85% in the three days since Wirecard’s auditor, Ernst & Young, said roughly fourth-fifths of the net cash reported in the last audited accounts couldn’t be verified. Chief Executive Officer Markus Braun resigned, yet the company is still capitalized at almost 2 billion euros ($2.2 billion). Shareholders think there’s still some value to be salvaged.Wirecard is exploring various restructuring measures and disposals to make sure it can keep the lights on. Yet potential acquirers will worry if there are any more nasties still to be found and what the quality of the underlying technology is really worth — the large profits it reported previously are open to considerable doubt. At the very least it might want to consider changing the company name, which has become a byword for corporate and regulatory failure. That’s a suggestion from Citigroup analysts too.Still, a glance at Wirecard’s bonds doesn’t suggest much confidence in Freis’s rescue mission. The 500 million euros of senior unsecured debt is priced at just 26 cents on the euro — the bond market’s way of saying, “Abandon hope all ye investors who enter here!” It’s not just bondholders who are sweating. The lending banks will be too. Wirecard has a 1.75 billion-euro revolving-credit facility that’s now about 90% drawn, according to Bloomberg News.Because Wirecard failed to publish its annual report, the lenders have the right to call in their loans, but they haven’t so far. Keeping the company going will improve their chances of recovery.Unfortunately, as a financial technology company, Wirecard isn’t exactly flush with hard assets to sell. Some of its most valuable assets are customer relationships. The more transactions Wirecard processed, and the more customers it added to its financial platform, the more the business was worth in the eyes of investors.There’s a danger now that that unless it can quickly engineer a sale, Wirecard’s partners will desert the company because of the financial and reputational risks of maintaining a relationship. Mirabaud Securities’ Neil Campling, one of the few analysts to warn about its business, says there’s a chance credit card companies could decide to stop working with Wirecard after its compliance failures.The same is true of the company’s blue-chip clients. While Wirecard’s origins were in servicing payments for gambling and porn websites, it has nurtured relationships with more august consumer names such as Ikea and Swatch. There are other providers of similar digital payment services, so Wirecard is by no means irreplaceable. There’s a danger too that the customers of Wirecard Bank, the company’s German deposit-taking arm, withdraw some funds. Wirecard held about 1.7 billion euros of such deposits as of September 30th. The first 100,000 euros of customer cash are protected in Germany by deposit insurance, which might offer some protection. It’s questionable, though, whether regulators can continue to regard Wirecard as a responsible owner.Even if its lending banks show patience and customers remain loyal, the company will probably be hit by an avalanche of litigation. And its corporate culture will also be difficult to reform. It was aggressive in defending itself against accusations of fraudulent accounting. Yet it was the company that misled the market, not journalists or short sellers. (Braun has always denied wrongdoing.)Anyone who’s read the Financial Times’s extensive reporting on the company will see that the troubles run deep. KPMG’s special audit, published in April, couldn’t verify much of Wirecard’s historic revenue and profits. The question isn’t just whether Wirecard can survive, but whether it should.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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