Monday, October 17, 2016

Extra links

1--The Ultimate Ebitda Fighting Championship-- Sale of UFC and other buyout deals are raising concerns among regulators that banks and clients are being too liberal with adjustments to earnings to justify more borrowing for transactions

When the Ultimate Fighting Championship put itself up for sale this year, the mixed-martial-arts organization showed one measure of earnings of about $170 million, according to people familiar with the deal.
But with a few tweaks, the figure presented to debt investors helping finance the sale climbed to $300 million, the people said.
The higher number allowed the buyer, talent agency William Morris Endeavor, to borrow $1.8 billion for the deal without exceeding a regulatory “leverage” guideline. That discourages banks from lending more than six times a company’s earnings before interest, taxes, depreciation and amortization, or Ebitda...

One technique for companies looking to lower their debt metrics is known as “pulling forward,” that is, earnings that haven’t happened yet but are expected from merger-related cost savings or recent business shifts, said James Fitzpatrick, a portfolio manager at investment firm CQS, which has increased its loan investments over the past year.
“Deals have gotten more aggressive in pretty much every respect,” said Alex Jackson, a portfolio manager at Insight Investments Ltd., which owns about $2 billion of leveraged loans. Borrowers are offering fewer protections to investors, while lowering interest rates and raising leverage, he said.

But they don’t have to be. Leveraged loans aren’t subject to SEC oversight.

The use of tailored financial metrics was commonplace in the leveraged buyout boom of the middle part of the last decade. It faded after the financial crisis as lenders raised standards.
Today’s comeback is occurring as superlow interest rates send investors in search of yield...

Concerns about companies massaging their financial figures in the debt markets echo worries in stock markets. The Securities and Exchange Commission has criticized companies’ increasing use of measures that don’t comply with standard accounting rules.
The adjustments often exclude charges for things like stock-based compensation or restructuring expenses. In and of themselves, the adjustments aren’t improper. Companies have said that the tweaks provide a truer picture of their business. The fear is that they also provide an overly rosy view of profits....

Under SEC rules, companies must show, step by step, how they arrive at the altered earnings figure. Such adjustments also are typically spelled out in marketing materials for buyout debt, investors and bankers said.
Seizing on investor demand, companies issued $278 billion of leveraged loans in the third quarter, the highest July-to-September volume on record, according to data provider Dealogic.
Leveraged loans have been a bright spot for Wall Street banks, which pocket fees when they sell loans to investors. Plus, robust demand means banks run little risk of having to park unsold loans on their books.

...William Morris Endeavor bought closely held UFC in August, a $4 billion deal backed by private-equity firms Silver Lake and KKR KKR -0.80 % & Co. The firm posted $170 million in Ebitda for the year ended June 30, people familiar with the matter said.

2--Obama Re-imposes Neoliberalism in Latin America

In her memoir, Hard ChoicesClinton admitted that she aided the new leadership by short-circuiting any efforts to restore Zelaya to power. “In the subsequent days [after the coup] I spoke with my counterparts around the hemisphere, including Secretary [Patricia] Espinosa in Mexico. We strategized on a plan to restore order in Honduras and ensure that free and fair elections could be held quickly and legitimately, which would render the question of Zelaya moot,” she wrote.

Ecuador in the Crosshairs

After the coup against Zelaya, Ecuador’s popularly elected president, Rafael Correa, said, “We have intelligence reports that say that after Zelaya, I’m next.” He may have been right. The year after the Honduran coup, there was an attempted coup against Correa. Although the action failed, Latin American expert Mark Weisbrot said it was clearly an attempted coup to overthrow Correa’s government.

Correa had renegotiated oil contracts and demanded a larger share of the big oil companies’ revenue for the people of Ecuador. He also opposed a free trade agreement with the U.S. and closed the U.S. military base in Ecuador. And, he joined Venezuela, Cuba, Bolivia and Ecuador in the Bolivarian Alliance for the Peoples of Our America (ALBA) and successfully defaulted on over $3 billion of foreign debt that was illegitimately contracted by Ecuadorian leaders who Correa said were CIA-supported dictators...

Haiti’s largest and most popular party, Fanmi Lavalas has won every election that it has been allowed to participate in. But in this U.S.-sponsored election, Fanmi Lavalas was not allowed to compete. In other words, the Obama administration financed the election that specifically excluded the party the people wanted to elect.

The next indicator of Obama’s failing grade came in Paraguay, where in June 2012, Fernando Lugo, the democratically elected leader of Paraguay was removed in a coup. The right-wing opposition opportunistically capitalized on a skirmish over disputed land that left at least 11 people dead to unfairly blame the deaths on President Lugo. It then impeached him after giving him only 24 hours to prepare his defense and only two hours to deliver it. ...

Perhaps the sharpest blow to Latin America’s attempts to reduce poverty and structure economies more for the benefit of average people, not the wealthy, came just this year in Brazil when another “soft coup” was organized to remove Brazilian President Dilma Rousseff from office and replace her with a right-wing regime.

Again the evidence of a coup was obvious with opposition parties seizing on a budgetary dispute to overturn the voters’ will in South America’s largest country and biggest economy. The evidence included the publication of a transcript of the call between Romero Jucá, who was a senator at the time of the call, and former oil executive Sergio Machado, discussing “a national pact” to remove Rousseff and install Michel Temer as president. Jucá revealed that not only opposition politicians but members of the military and Supreme Court were in on the conspiracy....

The cumulative impact of Obama’s presidency on Latin America has been the steady rollback of the Pink Tide as socially progressive governments around the hemisphere were either removed via “soft coups” or placed under enormous economic pressure, reversing many of the social gains that occurred in the previous decade.

3--Who Owns America: The Most Shocking Interview that “Never Happened”

Brzezinski wrote, four years before birthing the TC with his godfather, David Rockefeller:
[The] nation state as a fundamental unit of man’s organized life has ceased to be the principal creative force. International banks and multinational corporations are acting and planning in terms that are far in advance of the political concepts of the nation state.”
Any doubt on the question of TC goals is answered by David Rockefeller himself, the founder of the TC, in his Memoirs (2003):
“Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure—one world, if you will. If that is the charge, I stand guilty, and I am proud of it.”

4--Gingrich: "The election is rigged"

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