Archive for the ‘debt settlement’ Category

Characteristics of a good credit lender February 17th, 2010

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All of the characteristics of a traditional MBO apply to a company that is seeking to exit through an MBI with one very important exception: where there is no one suitable for the role of CEO, or other key management function within the business, the investors will insist that outside expertise be brought in to cover this deficiency before they will give the buy-out their financial support.

When planning for a management buy-out you should always be alert to possible management shortcomings. Where you recognise that your management is weak in some area, you will need to put someone else in place. If this is not possible, you need to accept that the VC investors will insist on bringing in a recognised industry expert as a part of the team.

This could completely change the dynamics of the buy-out team and your ability to negotiate the most favourable deal.

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Deal with credit-specific issues in the past November 11th, 2009

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The bonds of Ericsson, Tyco and ABB. All three companies had credit-specific issues in the past and seemed to have overcome those at the time of writing (December, 2003). Their lowest prices were quoted almost at the same time (October, 2002) where risk tolerance reached the lowest level in a decade (measured by VIX). The important point to illustrate is that nonsystematic risks induced the first price falls in all three companies at different points in time. Idiosyncratic risks were responsible for the first massive downward price movement. In this situation, an assessment of the credit should not be based only on credit fundamentals but every credit portfolio manager has to evaluate what volatility his portfolio can sustain because the main task for a high-yield portfolio manager is to manage risk. Technical factors have to be considered because it is likely that market liquidity for a troubled bond will disappear quickly which will result in a “free fall” in price.

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Make money with web standards conformance of your site November 9th, 2009

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Designing your financial website with conformance to current standards means that – by proxy – the documents will be smaller. As a result, the pages will be displayed much faster for the users seeking data on latest currency values and loans interest. Moreover, download times have proven to be an important factor in usability of financial websites. Users often look for latest financial information (for example from stock exchange) and any perceivable delay will harm the evaluation of your website. Users tend to rate sites with slow financial data display as less interesting and offering lower quality content. Additionally, they claim that delays tend to severely interfere with task continuity, their ability to remember financial details from your site, and use flow. Really slow display of stock market information can lead users to believe some kind of error has occurred. Finally, users correlate site performance and security: financial sites that are constantly slow are considered to be less secure resources, and this is extremely important if you deal with matters such as banking, loans or forex.

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