BizJournals Portfolio
Home >   Business Views, Opinions and Blogs >   Business Blogs >   Market Movers >  

Dont Bank On Loan Deals

Market Movers

by Felix Salmon
Main
The Idiocy of Reporting Auction Hammer Prices   Damien Hirst Datapoint of the Day

Recent Blog Posts

Links

Feb 15 2008 12:00am EDT

Don't Bank on Loan Deals

Front-page stories in the WSJ and FT: two great tastes which go great together!

First there's David Enrich in the WSJ, talking about a Citigroup hedge fund named CSO Partners, which contracted to buy a bunch of loans and then tried to back out of the deal. Then there's Henny Sender in the FT saying that it's not just hedge funds owned by banks which are trying to back out of loan deals, it's also the banks themselves - maybe. If following through on their loan commitments will cost them more than the reverse break-up fees if they walk away, then it might make sense to walk away.

The upshot of all this would seem to be that it's a bad idea to count any chickens in the world of loans. Until you have your cash in the bank, don't assume you're going to get what a bank says you're going to get.

(Incidentally, this is the first and last time I'll ever use a "bank on" or "banking on" headline here at Market Movers. I have a self-imposed all-time quota of one such headline, which is hereby used up.)

blog comments powered by Disqus
Real Business, Real Results
Out of the 'Family'

Did anyone at Microsoft ever watch the (gasp!) offensively funny show Family Guy?

Cruz Missile Lands

Ex-Morgan Stanley exec Zoe Cruz is now heading her own hedge fund. Are Wall Street's leaders done?

Scandal Chic

Martha, Bernie and Skilling know that what you wear for court can go a long way in public perception.

spotlight on

Health Care

Bad to the Bone No More

Companies such as General Mills say they're stepping up efforts to change employees' bad behavior and promote healthier lifestyles. Read More