Archive for April, 2010
Reprices for the Better Reported. More Lock/Float Considerations
Posted by: | CommentsPosted To: MBS Commentary
4.5's up 8 ticks at 100-25 (after being as high as 100-28) 10yr yield down approx. 6bps at 3.67 S&P Down "lots" at 1194.71. Got a bounce on it's 1190(ish) support. Uncanny Adherence to Treasury Trend Channel. Technicals thanks to Fundamentals? MBS prices are a few ticks higher than some of the lower levels seen in march and January before major sell-offs. Treasuries are within a bp or two of their actual level the day before the big March sell-off. As you'll see in the longer term chart, it was a steep shot up to those high yields, but an EXTREMELY technical and measured return. Almost like the high and low sides of the trend channel agreeing to work in a reluctant pair to move in the same direction with some sort of blind hesitance. Almost like a calculated "testing…(read more)
Viewing Goldman Sachs from a Mortgage Banker’s Perspective
Posted by: | CommentsPosted To: The Garrett Watts Report
I don’t have an opinion about the charges levied against Goldman by the SEC, but some of the bantering between the seven Goldman employees (past employees) and the Senate Subcommittee caught my eye. Let’s do a short review of what I believe the traders were thinking in 2006 and 2007 and what they did to address increasing risk to the firm. They were essentially hedging the firm against financial losses as a result of a growing concern over the performance of subprime loans and counter party risk of mortgage bankers. Maybe this is no different than a mortgage banker hedging against interest rate risk, especially if one believes rates are rising. But first, let me tell a quick story before we discuss Goldman in greater detail. I did an audit on a large subprime wholesaler in late…(read more)
Citigroup (NYSE:C), Goldman Sachs (NYSE:GS) and other creditors of Gramercy Capital (NYSE:GKK) have asked Houlihan Lokey to advise them on the strategic options available in a proposed restructuring of approximately $800 million in debt.
Citigroup and Goldman Sachs Group hold a portion of the mortgage and mezzanine loans of Gramercy Capital, along with other creditors.
Some of the possibilities for Gramercy are to sale off some of its assets, a pre-packaged bankrupcy or refinancing their debt, according to people close to the matter.
In a regulatory filing in March, Gramercy did change some of the terms of its mortgage and mezzanine loans, but also said their properties are expected to have a negative cash flow.
Goldman Sachs and Citicorp are sure to work with Gramercy because a lot of the business of the company is mingled with theirs, giving them incentive to make it work. Some thing that may favor a pre-packaged bankruptcy over other options.
Normally how a mezzanine loan works is the lender has the rights to convert their interest in the company from debt to equity if the loan isn’t paid back fully and on time.
If the advice and decision is to go with a pre-packaged bankruptcy, that means major stakeholders in a company can negotiate terms for themselves before the Chapter 11 is filed.
Houlihan Lokey has a strong history of helping major companies navigate through the bankruptcy process.
This article (Citigroup (NYSE:C), Goldman Sachs (NYSE:GS) Tap Houlihan Lokey for Advise on Gramercy Capital (NYSE:GKK) Restructuring) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.