The possible downside to a policy of greater reliance on money-finance or debt-finance is that it might make holding dollar-denominated financial assets less attractive to foreigners.
As two of the sharpest distressed-debt investors, they will also be looking to pick up assets from the government's giant loan-buying entity when it gets going.
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Comparing long-term debt to current assets helps measure financial stability and highlights a potentially worsening situation within a company.
His plan was to use its assets to build a global petrochemicals empire through debt-laden deals.
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If fund values decline by any significant degree, debt-laden shareholders could have to liquidate other assets to pay up on their loans the hedge fund equivalent of a margin call.
Research by Tobias Adrian of the Federal Reserve Bank of New York and Hyun Song Shin of Princeton University indicates that banks take on more debt when the mark-to-market value of their assets increases.
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Although many observers expect U.S. lawmakers to reach a last-minute deal to avoid defaulting on its debt, the uncertainty is prompting investors to shift assets into safe havens, like gold and the Swiss franc.
Debt-service ratios are lower, and their liquidity ratio the ratio of short-term assets to liabilities is historically high.
The model also enables managers to fine-tune debt portfolios by estimating the effect new assets will have on the overall risk profile.
For instance, prosecutors say, he was involved in manufacturing earnings and concealing debt through sham sales of poorly performing assets to an off-balance-sheet partnership run by Andrew Fastow, Enron's former chief financial officer.
Also on the plus side were a more than doubling of net current assets, to 769 million pounds and a debt-to-equity ratio that actually improved to 0.7 from 1.1 the previous year.
Wall Street's five big investment banks Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns have piled into potentially illiquid (and thus risky) assets, from bridge loans to collateralised-debt obligations (pools of tranched debt), over the past three years.
Further, creditors have no recourse to sovereign assets in Greece, whereas in a corporate-debt restructuring, there are underlying assets factories, stock, equipment that ultimately can be seized and valued.
Last week, Hargreaves Services, a coal-mining and logistics company based in Durham, bought the debt linked to secured assets that belonged to another big Scottish coal producer ATH, which was forced into administration in December.
Financialization is why so many market participants were anxious to create, buy, and sell high-risk assets like subprime debt.
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Forced by regulators to shrink after losing tens of billions on collateralised-debt obligations, it is well on the way to shedding 40% of its assets.
They will also have to provide more capital against such assets as government debt, hitherto regarded as risk-free, and increase the amount set aside for foreign-exchange dealings.
Unlike leveraged buyouts in the U.S., where firms take over mature assets with borrowed capital, Sino-Gulf investors eschew debt, limit themselves to minority stakes and target companies that are still in formation.
The EU debt crisis will remain an underlying bullish factor for safe-haven assets like gold for a long time to come.
Investors rushed into German and U.K. bond auctions, as they continued to show a strong appetite for assets considered to be safe amid continued worries about the euro-zone debt crisis.
To add to its woes, the debt crisis in the eurozone and weak recovery in the US have seen many investors flock to safe-haven assets such as the yen, resulting in the Japanese currency strengthening against the US dollar and the euro.
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In the real world a CEO would be a world-class dunce not to issue a dollar of debt in order to snatch ten dollars' worth of assets.
In February, Domino's announced a plan to refinance its current debt and take out a large low-interest loan backed by its revenue-generating assets, in an effort largely aimed at returning capital to shareholders.
But given the shifting global dynamics, particularly the problems of excess debt in the industrial world, a well-balanced portfolio should include a strategic allocation to emerging market currency-denominated assets not just in Asia but around the world.
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Through an orderly sale of state assets each euro-zone country would be able to pay off as much sovereign debt as necessary.
These big deals have added a new urgency to the familiar litany of concerns about private-equity firms: that they slash jobs and strip assets, and that a long-established firm may disappear under the weight of the debt used to buy it.
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