Tag: financing

Why a $1.5 trillion source of corporate financing is choking on higher rates

  • CLO issuance down 41% in H1 vs same time last year
  • Funding lifeline for junk-rated borrowers shrinking
  • Investors demand higher premium

LONDON, July 5 (Reuters) – A financial stream that helped fund the world’s riskiest companies and grew into a market estimated at $1.5 trillion in the low interest rate years is drying up, as aggressive rate hikes bring tougher borrowing conditions and uncertainty.

The pace of issuance of so-called collateralised loan obligations (CLOs), which bundle loans of the weakest corporates and repackage them as bonds, has stalled.

Specialist asset managers minted CLOs worth more than half a trillion dollars in 2021, a year of heavy post-pandemic monetary stimulus. Almost $69 billion worth were launched or refinanced during the first half of this year, down 41% on the same period in 2022, JP Morgan data shows.

These vehicles, popular with hedge funds, insurers and asset managers when borrowing costs are low and investors hunt for yield, account for up to 60% of demand for the junk loans rated single B or below, according to S&P Global Ratings.

But the market has sputtered just as companies whose debt is considered a speculative investment face a mountain of refinancing needs in coming years.

The sharpest rise in global interest rates in decades, an anticipated global recession and fewer new CLOs to support junk rated borrowers potentially create a toxic cocktail of corporate distress.

“There haven’t been large credit losses yet, but the expectation is that bankruptcy rates [for corporate loans] will go up,” said Rob Shrekgast, a director at KopenTech, an electronic trading and analytics platform for CLOs.

The global CLO machine is slowing


CLOs have grown into a market worth about $1.5 trillion, KopenTech said.

Looking ahead, demand for the bonds issued by these vehicles will “decline meaningfully,” Bank

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Small Business Financing to Bypass Traditional Banks

  • Venture capitalists can provide funding, networking and professional guidance to launch your business rapidly.
  • Generally, angel investors don’t ask for any company shares or claim to be stakeholders of your business.
  • Businesses focused on science or research may receive grants from the government.
  • This article is for small business owners who need information on alternatives to traditional bank loans.

Starting your own company can be a daunting but rewarding process. While a great business plan is crucial for founders, financing is one of the most important elements a company needs to succeed.

However, financing a startup or small business can be a difficult, drawn-out process, especially for those with poor credit. While there is no minimum credit score you must have to get a business loan, traditional lenders have a range they usually consider acceptable.

If you have a low credit score and no collateral to offer, consider an alternative loan. In this article, we break down 11 small business funding options, examine the benefits of alternative lending and provide tips on how to finance your business.

Why is it difficult for small businesses to get loans from banks?

Capital is difficult for small businesses to access for several reasons. It’s not that banks are against lending to small businesses – they want to – but traditional financial institutions have an outdated, labor-intensive lending process and regulations that are unfavorable to local shops and small organizations. 

The difficulty of accessing capital is exacerbated because many small businesses applying for loans are new, and banks typically want to see at least a five-year profile of a healthy business (for instance, five years of tax data) before extending an offer.

What is alternative financing?

Alternative financing is any method through which business owners can acquire capital without the assistance of traditional banks.

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Boeing to move historic financing arm underneath jet enterprise

WASHINGTON/PARIS, Feb 16 (Reuters) – Boeing (BA.N) stated on Thursday it is absorbing its many years-aged plane-funding arm into its commercial airplanes device as element of a push to simplify its company composition.

After the retirement of Boeing Capital Corp (BCC) President Tim Myers this spring, Boeing reported it would “realign” the funding arm in just the business plane device whilst maintaining “potent coordination” with Boeing’s treasury arm.

Airfinance Journal before noted the go.

Boeing Funds, a subsidiary of Boeing, offers asset-based mostly funding and leasing to airlines missing accessibility to funding.

The realignment will “concentration means on our core do the job of supporting our customers and their funding needs,” Boeing Main Monetary Officer Brian West claimed in an inner memo seen by Reuters.

The closing of Boeing Money proceeds a development for Boeing to consolidate its operational construction and ends a major chapter in the speedy-increasing air finance field.

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Boeing in November announced a reorganization of its defense device that halved the number of sub-divisions. It has also moved to reduce 2,000 white-collar work in finance and human resources.


The shift comes times soon after the last shipping of the Boeing 747.

BCC was credited with prolonging the reign of the Queen of the Skies for a number of decades after stepping in to finance the sale of freighters to Russia’s Volga-Dnepr with leasing offers when other financiers were being reluctant to back the aging jet.

Functioning as a financial institution of final resort, BCC was a resource of firepower in the world jet market place, courting back again to 1968 below McDonnell Douglas and operating alongside the U.S. EXIM financial institution, which it fought to preserve in a Congressional dispute.

BCC stood completely ready to invest in back

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