"This company should never have been able to borrow a dime due to its list of affiliated transactions alone, " says Nathaniel Hudson, who tracks auto-sector junk bonds at Bank of America.
Using a combination of junk bond debt and bank financing, Singleton and his 87-year-old partner, Richard Scudder, are masters at bunching smallish suburban and hick-town papers around metro areas and skimming off advertising revenue that would otherwise go to the big paper in the city.
Just slightly positive this year they too have been outpaced by most other assets class out there including bank loans and junk bonds.
These profits have been dependable enough that the pair have been able to do almost all their buying with borrowed money, a mix of bank debt and junk bonds totaling just less than revenues.
For the ING fund, the two largest at the end of last year--accounting for 8.6% of the portfolio--were units of Charter Communications, rated a lowly B2 by Moody's Investors Service, and Nextel, also a junk issuer with a Ba2 bank-loan rating.
Patrick refuses to say which banks her investment group is now going after but admits she picked a fight with the biggest kid on the block Bank of America and its junk-mortgage-riddled Countrywide Financial unit to send a message to the rest of Wall Street.
Allowing SMEs to issue junk bonds will give companies that have trouble getting bank loans an alternative means of raising capital.
The bank made a cash offer for the junk-bond portfolio and arranged for a new insurance company, Aurora, to take over Executive Life's insurance contracts.
Prosecutors allege that when the French bank bought a defunct California insurance company's junk bond portfolio in 1991, it was effectively taking control of the company with the help of clients and allies.
To illustrate that it is baseless, he points to what he considers another great firm unfairly maligned by its critics as arrogant: Drexel Burnham Lambert, a freewheeling investment bank that shot from nowhere to market prominence in the junk-bond boom of the 1980s.
Although Citigroup ( C) and Bank of America ( BAC) sit now just two notches above junk status, Morgan Stanley ( MS) was relieved to see its debt rating cut two notches, not three, reports the Wall Street Journal.
Recently, bank loan funds have been getting buzz as the better way to play junk.
Since last autumn, according to CSFB, an investment bank, investment-grade bonds have returned 16.4% and junk bonds 35% (as James Grant, the editor of an eponymous newsletter, has pointed out, you can't call them high-yield any more).
In that case, the bank would not record all of the capital gain for the sale of the junk bonds, as some would now appear as an internal transfer of assets.
One large bank backed by good assets is far better than two or three smaller institutions that have a portfolio of junk.
Kerner's real title: managing director of the two-month-old private-shares group at Wedbush Securities, a bank that's headquartered in Los Angeles, a few miles from where Milken created and built his junk bond empire.
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