Father's Day Thailand - Commemoration of King Rama IX

 

Over seventy years of service to country and citizens.

Picture and text courtesy of AA's elder and wiser brother, expert in many things Asian.

Aus der Stadt Bochum, NRW, BRD - Welthauptstadt der Flitterwochen (1974) -- ZDF Starparade 5. Dezember 1974

Und vielleicht der Geburtsort von James Bond!

 

Es war ihr Liebeslied - besonders das unserer Mutter

Hey Boomer, a song for you!  He really is a Boomer (in both senses), you know.

Neil Diamond

und noch mehr Peter Kraus, Les Humphries Singers, Marion   

Hochkulturtanzen!!!!

And Now for Something Completely Different - The Financial Times

 

AA at His Rona Rig
Sufficiently Socially Distant so no Mask Required

If you’re one of the select (few) readers of this blog, what you usually find here are posts that focus on the negative. 

Misrepresentation of financial statements, questionable business strategies, other frauds and fakes, financial and economic fairy tales and the like.

That certainly is a “field” offering multiple opportunities to comment.

As the picture above indicates, today it is time for something completely different.

Some kudos to The Financial Times and the no doubt underpaid journalists who work there.

A bit of context.

Overall journalism ain’t what it used to be. 

And since it was never perfect, that’s quite a disappointing development.

Some basic “have to’s” are often missing. 

A breathless review of an exhibition that omits what in the past would have been basic facts: where, when, cost 

Other sloppiness that misses the "meat" of the story.

More seriously is the substitution of mindless partisanship for reporting. The intrusion of the editorial page into the news columns.

The FT is welcome respite from these two frequent lapses.

Some examples to make the case: NMC UAE, Wirecard, H20.

First, there is the uncovering of the basic story. 

Second the pursuit of the story despite pressure. 

Dan McCrum’s experience on the Wirecard story is instructive – working from a windowless office at FT central on an air-gapped PC. 

It is not the only case – NMC is another -- where external pressures were ignored.

Third rigorous smart in-depth analysis.

The report doesn’t stop at the surface of the story but goes into detail. 

It seems that often the chips are allowed to fall where they should. 

Did a “hero” in the Wirecard case have a less “heroic” role in related case in Mauritius? Dan McCrum and Olaf Storbeck report it.

Or BondHack and Cynthia O’Murchu digging through filings at EMCR and discovering that NMC had pledged assets (future credit card A/R). 

Something apparently unknown to folks who might be presumed to have a more serious interest in this disclosure.

“Folks” like equity investors or providers of funds -- other than ADCB.

Fourth, a global network that allows input from journalists around the globe to round out the story with local insights. 

Simeon Kerr weighing in on Wirecard from the UAE.

Is the FT perfect?

No, but it’s very good.

Disclosures:

1. No shareholding in companies related to FT.
2. No compensation for this article.

Adieu Caracalla

Ami, entends-tu le vol noir des corbeaux sur nos plaines?

Ami, entends-tu les cris sourds du pays qu'on enchaîne?

Ohé, partisans, ouvriers et paysans, c'est l'alarme.

Ce soir l'ennemi connaîtra le prix du sang et les larmes.

 

Creditor on Creditor Violence

Annual Leveraged Loan Investors Conference

Over the millennia our ancestors have passed down important life lessons to us in the forms of proverbs and other sayings.

Sometimes the author’s name is known. Most often not.

“Measure twice cut once”. Or in one country measure seven times before cutting.

“Don’t run with scissors” (ascribed, I believe, to Plato by Aristotle).

“Tie your camel first, then trust in God. (اعقلها وتوكّل)” ascribed to the Prophet Muhammad (SAWS) by Anas Ibn Malik via Al-Tirmidhi. (2517)

A recent article by Alicia McElhaney in Institutional Investor under the above title reminded me these and other similar sayings.

She describes how some members of leveraged loan syndicates are suing other syndicate members charging that when the obligor became distressed those lenders converted their “old” loans (those under the syndicate agreement) to “new” loans (outside the syndicate). 

In the process making the old loans subordinate to the new ones.

What those lenders did was take advantage of apparent deficiencies in the loan agreements.

AA finds it hard to have much sympathy for lenders stupid enough to sign syndicated loan agreements with inadequate protective covenants.

In the case at hand failing to insist that the loan agreement contain what were once standard covenants requiring:

1. 100% lender agreement to allow material changes to the loan conditions (rate, repayment, maturity, collateral)
2. pro-rata sharing of any repayments received by one or more syndicate member among all syndicate creditors 
3. limitations on market purchases of debt, along with a careful definition of what constitutes a “market purchase” etc.

While not the case here, this failure to “tie one’s camel” is similar to covenant lite loans that impose no real controls on the borrower. That is, no real triggers for creditors to call a default and accelerate the loan.

Both are “sins” in every kind of loan.

But more so for much riskier leveraged loans.

This asset class is supposedly where sophisticated investors—those able to analyze and bear the risks--”play”.

One might forgive a retail investor on the Robin Hood platform a “wise” investment in Tesla as a rookie mistake.

But “sophisticated” institutional investors with access to high-priced “elite strike force” legal teams?

I think not.

This is yet another cautionary tale--like that of Golden Belt Sukuk, Bernie Madoff, Abraaj, Wirecard, etc--for those who cling to unfounded myths about the innate wisdom of markets.

Kamkars - Rubayyat // کامکاران // رباعيات عمر الخيام