{"id":1262,"date":"2007-10-02T21:03:34","date_gmt":"2007-10-03T01:03:34","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=1262"},"modified":"2007-10-02T21:03:34","modified_gmt":"2007-10-03T01:03:34","slug":"october-2-2007","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=1262","title":{"rendered":"October 2, 2007"},"content":{"rendered":"

The private equity bid for Sallie Mae has been revised<\/a> – the much lower price is attributed to cuts in the US Federal subsidy of student loans. Accrued Interest called it right<\/a>! The idea that the bidders believe they’ll be able to finance a $20-billion takeover is a good sign for the credit markets. It looks as if the target company will not agree instantly<\/a> to the proposed price reduction.<\/p>\n

There’s more than one takeover in the news as cross-border shopping is taking off\u00a0… TD is buying a US bank for $8.5-billion<\/a>, doubling the size of their US operation. RBC has spent $2.2-billion<\/a> on a Trinidadian bank. Even the Montreal Exchange is increasing its stake<\/a> in the Boston Options Exchange.\u00a0Despite this, the ‘Hollowing-Out Crowd’ is flexing its muscles<\/a> in the apparent\u00a0belief that Canadians are too stupid to charge a good price for assets and too lazy to put cash to good use once a sale closes.<\/p>\n

Despite periodic chatter<\/a> that the ‘market believes the credit crunch is over’<\/a>, I’ll stick to my guns and say we haven’t seen the worst yet. Interest rate adjustments take some time to percolate through the system – and there was bad news from US housing<\/a> today, with liquidity drying up a lot. However, in another sign that the market is reacting rationally to changed circumstances, there are rumours that<\/a>:<\/p>\n

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Goldman Sachs Group Inc. may buy Litton Loan Servicing LP, the Houston-based servicer of U.S. subprime mortgages, said people with knowledge of the matter.
\n…<\/strong>
\nGoldman may be betting it can increase the value of mortgage assets by reworking loan terms to make it easier for borrowers to pay their debt, said Terry Couto, a partner at Newbold Advisors, a mortgage-consulting firm.<\/p>\n

Buying a servicing business would allow the owners “to go out and buy distressed loan portfolios, or work out what they already own,” Couto said.<\/p>\n<\/blockquote>\n

Don’t take the brevity of this post as a sign I am ignoring you! The following posts are new today:<\/p>\n