Hung Bridge Loan

Hungarian Bridge Loan

The leveraged loan covenants show the reluctance of banks to finance all but the strongest loans. Hungry high-interest bridging loans are on the rise. Hunger lending is a Wall Street issue. At the end of last year, the lending situation deteriorated on the lending side. In December, the high-yield mortgage collapsed over the course of a few short consecutive waves, with the effects of this sell-off likely to be reflected in banking revenues in the final three months of the year.

Loan slowdown has an effect on net income from financial operations as bankers are confronted with turbulent terms, assumption of debts and the value of credits on banks' accounts.

Strong movements in particular have the capacity to result in Hung leverages. Hunger deals usually arise when a local banking institution provides bridge finance for an asset and expects this loan to be funded on the fixed income markets at a later date. As returns rise between the point at which the loan is granted and the point at which the subsequent transaction takes place, investors may find that they are losing because the securities have to be discounted in order to stimulate investors' interest.

Already in October, it was difficult for them to sell credits with a lever effect. In November, the Financial Times pointed out the risks of such transactions before the December downturn continued. On Tuesday, in a memo on Goldman Sachs and Morgan Stanley, Credit Suisse financial researcher Christian Bolu reiterated the risks associated with suspended gearing lending.

Said the upcoming Dell/EMC funding would represent an important test for the high-yield bond market and its capacity to take up a lot of paper. 4. In the future, the funding of the $67 billion Dell/EMC fusion should deliver a true test of the soundness of the high-yield financial market. Media coverage indicates that the funding requirement will be ~$50 Bn with a post-merger leverage of 5-6x EBIDTA and will be funded by 8 banking institutions (GS is part of the syndicate) through a combined bond and credit facility.

Below is a listing of the businesses that could be affected by Credit Suisse:

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