In an effort to assuage investors' concerns about the refinancing business, Mr. Sloan, the chief financial officer, said in a conference call on Friday that he saw "billions of dollars in refinancing opportunities".
Although the equity is likely to remain highly volatile given that it accounts for only 5% of the enterprise value, we believe share price weakness has been caused by concerns over refinancing around £3.5bn of debt by April 2011 and the ongoing revenue pressures amid a weakening economy.
Even MFIs that borrow locally may find their banks' funding is constrained by global conditions.An even more pressing concern is refinancing existing debt.
The deal, Gimme Credit analyst Carol Levenson said in a note to investors, alleviates "much, but not all, of our concern over refinancing the $22.5 billion bridge financing contemplated for the acquisition and other short-term debt".
We upgrade to neutral on valuation grounds but think the share price will remain under pressure until the group completes its refinancing [which] remains a concern.
"Refinancing risks remain a key rating concern for these banks," said Monica Insoll, managing director in Fitch's credit market research group in London.
FINANCIAL TIMES Refinancing Plan Seen as Weak | Mortgage bonds whose underlying loans have high interest rates were trading higher, suggesting that investors were not concerned about a wave of refinancing under a government plan, The Financial Times reports.
Their concern is that banks hungry for refinancing will compete with governments — which also must roll over huge sums — for the bond market's favor.
Len Kiefer, deputy chief economist at Freddie Mac, is less concerned with the current rate of cash-out refinancing.
Some proponents of refinancing hailed the plan as a step in the right direction, though there were concerns about its chances of passing Congress.
