1. NW Growth Financing ConferenceThe Thawing of the Credit Markets:Is Your Company Freezer Burnt? Moderator: Curtis Fraser, Chase Glenn Burroughs, PNC Business Credit Thomas Cleveland, Access Business Finance Raymond Yager, Fifth Third Bank
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3. However, the 1Q10 mini-revival in dividend deals and even a few repricings stalled in June as the loan market cooled. Leaving sponsors to focus on sponsor-to-sponsor trades.
9. Lower anticipated defaults in lender portfolios resulting in a more accommodating stance from credit committees;
10. A reversion to mimicking the broadly syndicated market for structure; and
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13. Through June 30th, issuers have placed $10.5 billion (total) and $8.8 billion (sponsored) of loans and bonds to back dividends payments, versus just $8.0 billion (total) in all of 2009.
14. 2010’s class of dividends have been relatively conservative so far, with rating agencies and accounts generally skeptical of equity extraction.
52. Bank Failures- S& L Crisis vs. todaySource: FDIC S&L Crisis 1,409 banks failed between 1989 and 1993 Cost of the crisis $160.1 billion Today 2008 bank failures – 25 2009 bank failures – 140 As of July 16, 2010 – 105 Troubled banks – 700 + Net charge offs 2006 - $ 27.0bil 2007 - $ 44.1bil 2008 - $ 100.4bil 2009 - $ 187.4bil Q1 2010 - $52.4bil
53. Asset ValuesSource: GoIndustry DoveBid Semiconductor and PCB industries - In a current state of growth with high demand for high grade good quality equipment. Lead times for new equipment is forcing buyers to the secondary market. Transportation- Alternate fuels have not really hit this market in a big way. Hybrids are expensive and may be difficult without government supported tax breaks. California new laws will create problems in this sector as conversion to less polluting engines is expensive. Other states will follow. Bio-Pharmaceuticals- Steady and strong with consolidation in R&D. This is an industry that quickly obsoletes older equipment when testing and research are through. Plastics-Injection molding is the largest sector in this industry with extrusion and blow molding the smaller sectors. Performance is estimated to be up for 2010 from 2009 for Injection, and dropping somewhat for extrusion and blow molding. Current conditions - There is an uptake in the market. Lower inventories have created the move up in manufacturing. The question is, whether it is sustainable and for how long. Many companies have cleaned up their bottom lines and are working with fewer people. Bottom line, we need to invest in manufacturing goods the world wants to buy.
54. Great American Group Machinery & Equipment Above data based on Great American Group’s liquidation activities in addition to consultations with our network of commodity-specific advisors. Participants compared used equipment values and level of trade observed in Q2 2010 as compared with Q1 and projected value trends into Q3.
56. Implications Require in excess of 243 new rule makings by 11 different federal agencies. Expect 5,000 pages on new regulations. Promises to generate historic levels of red tape. No expiration date on powers. Creates environment of regulatory uncertainty and deter lending in the near term and increase the cost of credit. Eliminates the use of Trust Preferred Securities by Bank Holding Companies to raise Tier 1 Capital- higher level of capital will be required. Derivatives more costly impacting producers of commodities and food.
57. Provide permanent bailout authority to FDIC Alters the use of the FDIC from a traditional deposit insurance that guarantees the same deal for every bank to a tax you pay the government and the government decides which bank it wants to replace. Increases the cost of non-deposit funding and the static saving for smaller banks disappears. Affects the pricing and availability of home loans. Insurance premiums will increase due to higher insurance limits and no limit on the size of the FDIC fund. Trust the same regulators that Failed the last time.
58. New 10 member Financial Stability Oversight Council and a new Bureau of Consumer Affairs Expect a destabilized financial system by stifling innovative products while failing to detect dangers posed by existing ones. Increase in credit costs for consumers and businesses tighter credit markets as fewer loans will be granted. New disclosure and reporting requirement adding to the compliance costs. Banks forces to invest in lawyers and lobbyists to keep up with the law. Assumes that policy makers are able to predict financial crisis.
60. Fannie and Freddie Forever Lack of Government sponsor enterprise reform makes the bill an inadequate response to the 2008 financial crisis. Hundreds of provisions unrelated to the original mission and fails to address the major cause of the mortgage meltdown. According to the Wall Street Journal- it weakens the US economy and reduces economic growth. Ignores the role of loose monetary policy in driving the housing bubble.