Leveraged loans may have a role in recent retail bankruptcies. Leveraged loan volume is nearing pre-recession highs and is on track to surpass 2007 levels, concerning many regulators and investors. Leveraged loans are typically offered to companies that already have large amounts of debt, and therefore, leveraged loans carry higher interest rates due to an increased risk of borrower default. Companies often use leveraged loans to finance mergers, refinance debt or for general company purposes. Private equity firms also utilize leveraged loans in order to fund takeovers of companies, including struggling retailers. Loans issued to fund leveraged buyouts from private equity firms rose 74 percent in 2017 and totaled 88.5 billion dollars. Additionally, nearly a third of loans to companies backed by private equity firms are leveraged six times or more.
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Brian J. Tanenbaum
Many CMBS Loans Due to Mature as Retail Shopping Malls Struggle
Posted in Real Estate
Traditional shopping malls across the country are facing a decreasing amount of customers, declining profits, and, in certain cases, overall viability. With billions of dollars in outstanding CMBS debt that large mall owners may be unable to refinance, the CMBS industry is bracing for potentially significant losses. …
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Legal Battles Over Rights of Food Trucks
Posted in Real Estate
The mobile food industry has grown significantly over the last few years and, with that growth, vendors and their brick-and-mortar competition have been faced with a changing regulatory landscape. …
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