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September 17, 2008
Events, Dear Boy
Gumby Fresh
The Atlantic Yards blogosphere's resident debt-finance expert owns up to the fact that even experts make mistakes.
It's interesting that no matter how infrequently I post, it's still possible for me to drop a decent-sized clanger with pretty decent regularity. I refer, of course, to the post below, where I confidently predicted that Barclays had lost interest in the idea of building up a US brokerage business, and that financing conditions for the Atlantic Yards arena were still benign.
So, that was about 1.5 clangers. Barclays, of course, has decided to double down its bet on a presence in the US capital markets by tearing a few strips off the Lehman Brothers corpse, although how the Lehman* purchase helps it build up a retail business in the US escapes me. It's clear that John Varley and Bob Diamond have decided to fling the money of the good depositors in the banks' UK operations at empire-building in New York.
...The .5 clanger is that financing conditions have headed south again. Now right now, investors love them bonds, and the "Barclays Center" (that dare not speak its name) would probably be financed using bonds. But the bonds that they love are mostly low-risk stuff, and highly-leveraged construction financings for speculative team moves don't count.
NoLandGrab: One interesting news item that popped up over the weekend was the explanation that Barclays backed out of a full takeover of Lehman because the U.S. government wouldn't cover the losses — like their naming-rights partner Bruce Ratner, they apparently know it's better to risk the taxpayers' money than their own.
Posted by eric at September 17, 2008 6:46 PM