Loan

Philip R. Lane: The economic outlook and monetary policy

Retrieved on: 
onsdag, april 3, 2024
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Key Points: 

The impact of regulatory changes on rating behaviour

Retrieved on: 
tisdag, april 2, 2024
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Abstract

Key Points: 
    • Abstract
      We examine rating behaviour after the introduction of new regulations regarding Credit Rating
      Agencies (CRAs) in the European securitisation market.
    • There is empirical evidence of rating catering in the securitisation market in the pre-GFC period (He et al.,
      2012; Efing and Hau, 2015).
    • Competition among
      CRAs could diminish ratings quality (Golan, Parlour, and Rajan, 2011) and promotes rating shopping by
      issuers resulting in rating inflation (Bolton et al., 2012).
    • This paper investigates the impact of the post-GFC regulatory changes in the European
      securitisation market.
    • In 2011, in addition to the creation of
      European Securities and Markets Authority (ESMA), a regulatory and supervisory body for CRAs was
      introduced.
    • We examine how rating behaviours have changed in the European securitisation market after the
      introduction of these new regulations.
    • We utilise the existence of multiple ratings and rating agreements between
      CRAs to identify the existence of rating shopping and rating catering, respectively (Griffin et al., 2013; He
      et al., 2012; 2016).
    • We find that the regulatory changes have been effective in tackling conflicts of interest between issuers
      and CRAs in the structured finance market.
    • Rating catering, which is a direct consequence of issuer and
      CRA collusion, seems to have disappeared after the introduction of these regulations.
    • There is empirical evidence of rating catering in the securitisation market in
      the pre-GFC period (He et al., 2012; Efing and Hau, 2015).
    • Competition among CRAs could diminish ratings quality (Golan, Parlour,
      and Rajan, 2011) and promotes rating shopping by issuers resulting in rating inflation (Bolton et
      al., 2012).
    • This paper investigates the impact of the post-GFC regulatory changes in the European
      securitisation market.
    • In 2011, in addition
      to the creation of European Securities and Markets Authority (ESMA), a regulatory and
      supervisory body for CRAs was introduced.
    • We find that the regulatory changes have been effective in tackling conflicts of interest
      between issuers and CRAs in the structured finance market.
    • Rating catering, which is a direct
      consequence of issuer and CRA collusion, seems to have disappeared after the introduction of
      these regulations.
    • Investors who previously demanded higher spreads for rating agreements for a
      multiple rated tranche, did not consider the effect of rating harmony as a risk in the post-GFC
      period.
    • Regarding rating shopping, we find that the effectiveness of the changes has been limited,
      potentially for two reasons.
    • Additionally, we also find that rating over-reliance might still be an issue, especially
      Rating catering is a broad term and it can involve rating shopping.
    • They re-examine the rating shopping and rating
      catering phenomena in the US market by looking at the post-crisis period between 2009 and 2013.
    • Using 622 CDO tranches, they also observe the existence of rating shopping and the diminishing
      of the rating catering.
    • Firstly, our main focus is the EU?s CRA Regulation and its effectiveness in reducing
      rating inflation and rating over-reliance.
    • To the best of our knowledge, this paper is the first to
      examine the effectiveness of the EU?s CRA regulatory changes on the investors? perception of
      rating inflation in the European ABS market.
    • Hence, the coverage and quality of our dataset constitutes significant addition
      to the literature and allows us to test the rating shopping and rating catering more authoritatively.
    • The following section reviews the literature
      on securitisation concerning CRAs and conflicts of interest, and outlines the regulatory changes
      introduced in the post-GFC period.
    • Firstly, ratings became ever more important as the Securities and
      Exchange Commission (SEC) 5 began heavily relying on CRA assessments for regulatory purposes
      (i.e.
    • the investment mandates that highlight rating agencies as the main benchmark for investment
      eligibility) (SEC, 2008; Kisgen and Strahan, 2010; Bolton et al., 2012).
    • issuers) as one of the main explanations for the rating inflation (He et al., 2011; 2012; Bolton
      et al., 2012; Efing and Hau, 2015).
    • Bolton et al., (2012) demonstrate that competition
      promotes rating shopping by issuers, leading to rating inflation.
    • The last phase, CRA III, was implemented in mid-2013 and involves an additional
      set of measures on reducing transparency and rating over-reliance.
    • As mentioned above, rating inflation can be caused by rating shopping
      In order to be eligible to use the STS classification, main parties (i.e.
    • The higher the difference in the number of ratings for a
      given ABS tranche, the greater the risk of rating shopping.
    • Alternatively, the impact of the new
      regulations could be limited when it comes to reducing rating shopping.
    • This is because, firstly,
      the conflict of interest between securitisation parties is not necessarily the sole cause for the
      occurrence of rating shopping.
    • L is a set of variables (Multiple ratings, CRA reported, Rating agreement) that
      we utilise interchangeably to capture the rating shopping and rating catering behaviour.
    • Hence, issuers are incentivised to report the highest possible rating and
      ensure each additional rating matches the desired level.
    • All in all, our results suggest that
      the new stricter regulatory measures have been effective in tackling conflicts of interest and
      reducing rating inflation caused by rating catering.
    • Self-selection might be a concern in analysing the impact of the
      new measures and investors? response with regard to the rating inflation.
    • This
      result is in line with the earlier findings suggesting that regulatory changes have reduced investors?
      suspicion of rating inflation and increased trust of CRAs.
    • Conclusion
      Several regulatory changes were introduced in Europe following the GFC aimed at tackling
      conflicts of interest between issuers and CRAs in the ABS market.
    • Utilising a sample of 12,469
      ABS issued between 1998 and 2018 in the European market, this paper examined whether these
      changes have had any impact on rating inflations caused by rating shopping and rating catering
      phenomena.
    • We find that the
      effectiveness of the changes has been more limited on rating shopping potentially for two reasons.
    • Tranche Credit Rating is the rating reported for a tranche at launch.

Consumer participation in the credit market during the COVID-19 pandemic and beyond

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tisdag, april 2, 2024
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We find that credit demand is highest when

Key Points: 
    • We find that credit demand is highest when
      the first lockdown ends and it drops when supportive monetary compensation schemes are implemented.
    • Credit is more likely to be
      accepted under favourable borrowing conditions and after the approval of national recovery plans.
    • We also find
      that demographic, economic factors, perceptions and expectations are associated with the demand for credit and
      the credit grant.
    • First, it adds to a rapidly growing literature on household
      borrowing behaviour during the COVID-19 pandemic; see, for example, Ho et al.
    • We provide evidence that credit applications and credit acceptances display a different pattern over
      time.
    • Credit is more likely to be accepted under favourable borrowing conditions and after the
      approval of national recovery plans.
    • In almost all countries
      households are significantly less likely to apply and to get their credit approved than in Germany.
    • In line with literature, we show that
      demographic and economic factors affect the probability for credit applications and credit approval.
    • In addition,
      the paper shows that consumer perceptions and expectations matter when they decide to apply for credit.
    • Introduction

      The participation of households in the credit market receives wide attention in the consumer finance literature
      because consumer credit enters the monetary policy transmission mechanism through the so-called ?credit
      channel?: changes in credit demand and supply have an effect on consumers' spending and investment, which in
      turn affect economic growth.

    • We use microdata from the ECB?s Consumer Expectations Survey (hereinafter CES), a survey that
      measures consumer expectations and behaviour in the euro area.
    • Its panel dimension allows for an assessment of
      how consumer behaviour changes over time and how consumers respond to critical economic shocks.
    • This way we can gauge how credit applications and credit acceptances change under different, almost
      opposite, borrowing conditions.
    • We also distinguish between the demand for long-term secured loans (mortgages) and for short-term
      uncollateralized loans (consumer loans).
    • ECB Working Paper Series No 2922

      3

      We use probit models to estimate the probability of the consumer to apply for credit and the credit being granted.

    • The rate peaks in 2020Q3 which reflects the rebound in the demand for loans when the first lockdown ended.
    • In almost all countries households are significantly less likely
      to apply and to get their credit approved than in Germany.
    • However,
      when it comes to credit acceptance, we observe that the two groups of households are more similar.
    • Finally, we find some heterogeneity with respect to the type of credit, particularly between secured and unsecured
      debt.
    • The demand for
      consumer credit is insignificant for liquid households and decreases significantly for constrained households in
      the last two quarters of our timespan.
    • The first consists of a recently growing literature which
      explores consumer behaviour in the credit market during the COVID-19 pandemic, mostly in the United States.
    • Sandler and Ricks (2020) show that consumers did not use credit card debt for financial liquidity in the early stage
      of the COVID-19 pandemic.
    • (2020) report that credit card applications and new mortgage loans
      declined during the first months of the pandemic in regions with more unemployment insurance claims.
    • Lu and
      Van der Klaauw (2021) show that there was a sharp drop in consumer credit demand, especially for credit cards.
    • (2022) document that there was a substantial decrease in the usage of credit cards and home equity lines
      of credit by Canadian consumers.
    • Our paper is also consonant with studies on the association between financial and demographic factors and
      consumers? participation in the credit market as well as on the demand for specific types of credit.
    • January 2020 ? October 2020 - The two main events are the outbreak of the COVID-19 pandemic and the
      consequential lockdowns in the euro area.
    • 4 If the
      respondent has applied for more than one type of credit, she is asked to refer to the most recent credit application.
    • Between 2021Q3 and 2022Q3 the acceptance
      rate stays above the average values, mirroring the easing of credit standards for consumer credit and other lending
      to households during this period.
    • Second, we can investigate the presence of nonlinearities in how liquidity and the credit type interact in explaining credit applications.
    • (2023) ? who show that in the United States the local pandemic severity had a strong
      negative effect on credit card spending early in the pandemic, which diminished over time.
    • First, we select mortgages and consumer credit as the two mostly reported categories for secured and

      13

      The full estimation results are reported in Table 3.

    • The right-hand side panel of Figure 6 shows that the demand for consumer credit is insignificant for both liquid
      and illiquid households.
    • It also shows that
      subjective perceptions of credit access, financial concerns and expectations on interest rates matter for the demand
      for credit.
    • In Bertola, G., Disney
      R., and Grant, C. (eds) The Economics of Consumer Credit, Cambridge MA, MIT Press.
    • Horvath, A., Kay, B. and Wix, C. (2023) The COVID-19 shock and consumer credit: Evidence from credit card
      data.
    • Magri, S. (2007) Italian households? debt: The participation to the debt market and the size of the loan.

EQS-News: Iute Group reports unaudited results for 12M/2023 – Efforts to improve quality lead the quantity considerations in 2023

Retrieved on: 
onsdag, mars 13, 2024
ATM, Acquisition, Growth, Loan, EUR, Consolidated, Equity, Interest, LTM, Insurance, Heart, DNA, Environment, FX, Lithium

Iute Group, a leading European personal finance group, reported today unaudited results for 12M/2023.

Key Points: 
  • Iute Group, a leading European personal finance group, reported today unaudited results for 12M/2023.
  • Our strategic endeavors were successful: Iute Group achieved growth and profit, while the focus remained heavily on modus operandi with quality being more important than quantity in 2023.
  • In this context, Macedonia unexpectedly imposed a one-off solidarity tax on national TOP100 companies, which burdened Iute Group with 1.4 million EUR in Q4 2023.
  • As progress stems from change, we are convinced that the best of Iute Group lies ahead of us as we transform," said Tarmo Sild, CEO of Iute Group.

Leonard Financial Solutions Introduces Innovative Retirement Planning Tool

Retrieved on: 
onsdag, februari 21, 2024
Education, Loan, Growth, Retirement, Radio, Certificate

Leonard Financial Solutions introduces a pioneering retirement planning tool, blending growth and protection strategies, aimed at empowering individuals to achieve their financial goals for retirement.

Key Points: 
  • New Jersey, United States--(Newsfile Corp. - February 20, 2024) - Leonard Financial Solutions, a provider of retirement planning services, is proud to introduce a revolutionary retirement income planning tool.
  • To view an enhanced version of this graphic, please visit:
    The primary goal of Leonard Financial Solutions' new retirement income planning tool is to help individuals effectively plan for and achieve their retirement income goals.
  • Clients can access Leonard Financial Solutions' cutting-edge retirement income planning tool through a team of experienced financial professionals.
  • The new retirement income planning tool offered by Leonard Financial Solutions represents a significant advancement in empowering individuals to achieve their retirement goals.

IntelGenx Enters Into a Third Amended and Restated Loan Agreement With atai Life Sciences

Retrieved on: 
måndag, mars 11, 2024
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Concurrently to entering into the Loan Agreement, the Company has issued 4,000,000 warrants (the “Warrants”) to atai.

Key Points: 
  • Concurrently to entering into the Loan Agreement, the Company has issued 4,000,000 warrants (the “Warrants”) to atai.
  • The Warrants entitle atai to purchase Shares at a price of US$0.17 per Share, for a period of 36 months following their issuance.
  • The shorter period was necessary in order to permit the Company to close the Loan Agreement in a timeframe consistent with usual market practice for transactions of this nature.
  • This press release does not constitute an offer of securities for sale in the United States.

iRhythm Announces Closing of $661.25 Million of 1.50% Convertible Senior Notes Due 2029, Including Full Exercise of Initial Purchasers’ $86.25 Million Option to Purchase Additional Notes

Retrieved on: 
fredag, mars 8, 2024
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The proceeds include the full exercise of the option granted by iRhythm to the initial purchasers of the notes to purchase up to an additional $86.25 million aggregate principal amount of notes.

Key Points: 
  • The proceeds include the full exercise of the option granted by iRhythm to the initial purchasers of the notes to purchase up to an additional $86.25 million aggregate principal amount of notes.
  • The notes will mature on September 1, 2029, unless earlier converted, repurchased or redeemed in accordance with the terms of the notes.
  • Upon conversion, the notes may be settled in shares of iRhythm’s common stock, cash or a combination of cash and shares of iRhythm’s common stock, at the election of iRhythm.
  • iRhythm estimates that the net proceeds from the offering are approximately $643.6 million, after deducting the initial purchasers’ discount and estimated offering expenses payable by iRhythm.

Sotherly Hotels Inc. Reports Financial Results for the Fourth Quarter Ended December 31, 2023

Retrieved on: 
onsdag, mars 6, 2024
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Total revenue was approximately $42.1 million and $41.3 million, for the three month periods ended December 31, 2023 and 2022, respectively.

Key Points: 
  • Total revenue was approximately $42.1 million and $41.3 million, for the three month periods ended December 31, 2023 and 2022, respectively.
  • For the twelve-month period ending December 31, 2023, total revenue increased to approximately $173.8 million, from approximately $166.1 million during the comparable period in 2022.
  • Hotel EBITDA decreased to approximately $10.3 million for the three months ended December 31, 2023, from approximately $11.9 million during the comparable period in 2022.
  • Dave Folsom, President and Chief Executive Officer of Sotherly Hotels Inc., commented, "In the fourth quarter, we continued to see improvements in overall hotel performance metrics.

iRhythm Prices Upsized Offering of $575.0 Million of 1.50% Convertible Senior Notes Due 2029

Retrieved on: 
tisdag, mars 5, 2024
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The aggregate principal amount of the offering was increased from the previously announced offering size of $450.0 million.

Key Points: 
  • The aggregate principal amount of the offering was increased from the previously announced offering size of $450.0 million.
  • The notes will mature on September 1, 2029, unless earlier converted, repurchased or redeemed in accordance with the terms of the notes.
  • Upon conversion, the notes may be settled in shares of iRhythm’s common stock, cash or a combination of cash and shares of iRhythm’s common stock, at the election of iRhythm.
  • Any offers of the notes will be made only by means of a private offering memorandum.

iRhythm Announces Proposed Offering of $450.0 Million of Convertible Senior Notes

Retrieved on: 
måndag, mars 4, 2024
SAN, Person, Research, Investment, Marketing, Sale, Exercise, Debt-to-GDP ratio, Loan, Observation, Convertible, IRTC, Public expenditure, Disease, Security, Credit, Security (finance)

The notes will be senior, unsecured obligations of iRhythm, and interest will be payable semi-annually in arrears.

Key Points: 
  • The notes will be senior, unsecured obligations of iRhythm, and interest will be payable semi-annually in arrears.
  • The notes will mature on September 1, 2029, unless earlier converted, repurchased or redeemed in accordance with the terms of the notes.
  • Upon conversion, the notes may be settled in shares of iRhythm’s common stock, cash or a combination of cash and shares of iRhythm’s common stock, at the election of iRhythm.
  • The interest rate, initial conversion rate, offering price and other terms are to be determined upon pricing of the notes.