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SAM361 USAF G5 departing JBA wn-this AC was also present at Cape Canaveral on 1209
Citibank Trial Features Perelman’s Record and Revlon’s Debt Load
Why would billionaire investor Ronald Perelman spend almost a billion dollars paying off a Revlon Inc. loan in August when he could have met an obligation of less than $400 million instead? That’s what a lawyer for Citigroup Inc. wanted to know from a hedge fund partner at one of the firms refusing to give back money the bank wired them this summer in a $900 million mistake.
The question, posed on the third day of a trial over Citibank’s effort to recover hundreds of millions of dollars from its Aug. 11 debacle, was aimed squarely at the central issue in the case: Did the recipients know the payment was a mistake? “Do you believe Perelman to be a rational businessman?” John Baughman, a lawyer for the bank, asked Matthew Perkal, a partner at Brigade Capital Management and a witness for the defense. Wouldn’t paying $387 million of notes “be more economically rational” than suddenly paying down almost $900 million in loans, he asked.
Citibank has recovered about $390 million of the August transfer and sued 10 asset managers for creditors that have refused to return $508 million. At the trial, lawyers for the bank have been pressing executives for the investment firms on the struggling cosmetic company’s capital structure and ability to pay down its debt load.
At the time of the transfer, Revlon had bonds outstanding that would have triggered the payment of more than $1 billion of secured debt in November. All it had to do to avoid this “springing maturity” was to pay off the bonds before the November deadline, Baughman said during his cross-examination of Perkal. Perkal pushed back, suggesting there were a lot of things Perelman might have done or not done.
“There is nothing preventing me from playing in the NBA,” he said. “But it’s not going to happen.”
Citibank, which was acting as administrative agent on the Revlon loan, made the transfer out of its own pocket. It says it accidentally wired the huge sum while trying to make a periodic interest payment, including to some creditors that had been locked in a battle with Revlon over a debt restructuring. The creditors say the transfers were the exact amount owed their clients under a 2016 loan to Revlon and that nothing about the payment led them to think otherwise. Among the 10 firms the bank has sued are Brigade, Symphony Asset Management and HPS Investment Partners.
The trial shines a light on one of the biggest and most embarrassing banking errors in recent memory – one that has already forced Citibank to explain its mistake to federal regulators and tighten its internal controls. The case is being closely followed on Wall Street, especially in the syndicated loan industry.
moar
https://www.bnnbloomberg.ca/citibank-trial-features-perelman-s-record-and-revlon-s-debt-load-1.1535237
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SAM267 USAF G5 on final approach at Ramstein AFB from JBA depart earlier today
Mortgage Equity Withdrawal Increased in Q3
This is not Mortgage Equity Withdrawal (MEW) data from the Fed. The last MEW data from Fed economist Dr. Kennedy was for Q4 2008.
The following data is calculated from the Fed's Flow of Funds data (released yesterday) and the BEA supplement data on single family structure investment. This is an aggregate number, and is a combination of homeowners extracting equity - hence the name "MEW" - and normal principal payments and debt cancellation (modifications, short sales, and foreclosures).
For Q3 2020, the Net Equity Extraction was $100 billion, or a 2.26% of Disposable Personal Income (DPI) . This is the highest level of MEW since 2007, but nothing like the amount of equity extraction during the housing bubble (as a percent of DPI).
Cap#2 shows the net equity extraction, or mortgage equity withdrawal (MEW), results, using the Flow of Funds (and BEA data) compared to the Kennedy-Greenspan method.
Note: This data is impacted by debt cancellation and foreclosures, but much less than a few years ago. MEW has been mostly positive for the last four years.
The Fed's Flow of Funds report showed that the amount of mortgage debt outstanding increased by $158 billion in Q3.
https://www.calculatedriskblog.com/2020/12/mortgage-equity-withdrawal-increased-in.html
The "Home" ATM's being used again….
SAM361 USAF G5 on descent for Offutt AFB, Omaha