New Strong Buy Stocks for November 30th

Bloomberg
Oil Soars Above $66 With Saudi Supply Gamble Buoying Crude Bulls
(Bloomberg) -- Oil rallied to the highest in nearly two years in New York after OPEC+ shocked markets with a decision to keep supply limited as the global economy starts to recover from the pandemic-driven slump.U.S. benchmark crude futures topped $66 a barrel on Friday, while its global counterpart Brent edged closer to the key $70-a-barrel level. The producer alliance’s aggressive supply management and the continued rollout of vaccines worldwide has aided a stellar rebound for crude since the depths of the coronavirus-related fallout. OPEC+’s surprise decision on Thursday to keep output steady in April has accelerated those price gains, spurring a wave of upgrades in oil price forecasts by major banks and a surge in the market’s structure.“In some ways, even more important than the lack of oil, was the message that came with it: They’re not really worried about price, not worried about tightening,” said Paul Horsnell, head of commodities research at Standard Chartered Plc. “In the short-term, certainly through to the April meeting, the market can go where it wants. The door is wide open to prices beyond $70.”Crude in New York has soared over 35% so far this year, setting multi-year highs with OPEC+ output restraint holding the market over until a full-fledged comeback in consumption. The group’s latest decision represents a victory for Riyadh, which has advocated for tight curbs to keep prices supported.“Overall, this was the most bullish outcome we could have expected,” JPMorgan Chase & Co. analysts including Natasha Kaneva wrote in a note to clients.The Organization of Petroleum Exporting Countries and its allies including Russia had been debating whether to restore as much as 1.5 million barrels a day of output. As part of Thursday’s agreement, Russia and Kazakhstan were granted exemptions, allowing them to increase supply marginally in April.Saudi Arabia’s bold and unexpected gamble to restrain production is founded upon its view that, this time around, higher prices will not lead to a big increase in output by American shale drillers. Saudi Energy Minister Prince Abdulaziz bin Salman said in an interview after the meeting that shale companies were now more focused on dividends.Oil’s rebound this year stands to intensify the debate about a potential resurgence in inflation, and complicate the task facing the Federal Reserve as it supports the U.S. recovery. The Treasury market is already looking for signs of faster price gains, with yields rising rapidly. Meanwhile, U.S. employers added more jobs than forecast in February.See also: Here’s What Top Banks Are Saying About the Saudi-Led Oil ShockGoldman Sachs Group Inc. raised its Brent forecasts by $5 a barrel and now sees the global crude benchmark at $80 in the third quarter. JPMorgan increased its Brent projection by $2 to $3 a barrel and Australia & New Zealand Banking Group Ltd. boosted its three-month target to $70. Citigroup Inc. said crude could top $70 before the end of this month.Change CourseOil rising to these levels will likely increase strains within OPEC+ as some members will want to pump more to relieve under-pressure economies, Citi said in a note. Top importers such as China and India would also not be happy and the alliance is likely to change course at its next meeting, it said.The lack of fresh supply was reflected in oil’s futures curve. Brent’s prompt timespread widened to as much as 73 cents in backwardation -- a bullish structure where near-dated prices are higher than later-dated ones -- from 54 cents Thursday. Gauges further along the oil futures curve also surged.“We’re going to continue to draw inventory at a much faster rate than we had expected just two days ago,” said Andrew Lebow, senior partner at Commodity Research Group. “Moving forward, if demand continues to improve, there’s certainly a chance of a serious supply shortage.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
44m ago
Bloomberg
Kaepernick-Backed Social Justice SPAC Underwhelms in Debut
(Bloomberg) -- Mission Advancement Corp., a company co-sponsored by former NFL quarterback-turned activist Colin Kaepernick, was little changed and thinly traded in its debut after boosting its initial public offering to raise $300 million.Shares of the blank-check firm, which boasts of a board made up entirely of “Black, Indigenous and people of color,” were flat at $10.01 Wednesday in New York. The market’s bland reception of the special purpose acquisition company gave it a market value of less than $400 million.The company, which is in part run by Jahm Najafi, who heads private-equity firm Najafi Companies, sold 30 million units for $10 apiece Tuesday. The pair will focus on diversity issues and racial justice and aim to acquire a consumer company with an enterprise value around $1 billion.A representative for Mission didn’t reply to a request for comment.Wednesday’s debut for Kaepernick’s SPAC, marked the second former-professional athlete-backed blank check company to go public in the last 10 days. Former Yankee all-star Alex Rodriguez’s Slam Corp. rose 5.1% in its first day of trading on Feb. 23, but has since trimmed gains to just 0.9%.For comparison, A-Rod’s SPAC had roughly 24.5 million shares traded in its first session compared to 13.9 million for Kaepernick’s.(Updates share movement throughout, adds trading volume in final paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
2d ago
Bloomberg
Bond Traders Drive Up Yields After Lack of Powell Pushback
(Bloomberg) -- Traders in the $21 trillion U.S. Treasury market are sending a clear signal that they intend to keep pushing yields higher until they upend financial conditions sufficiently to spark action from the Federal Reserve.Ten-year yields climbed again on Friday, heading toward last week’s one-year high and undermining stocks, after Fed Chair Jerome Powell gave just a minor nod to the recent, abrupt surge in long-term borrowing costs. He stressed that officials are focused on the long road ahead before they achieve their policy goals.Even before Powell spoke, some strategists were predicting the global borrowing benchmark rate was on course to reach 2%, a mere 40 basis points above last week’s peak. With yields on the rise again, it may not be long before mortgage-related hedging kicks in and brings that target closer. Goldman Sachs Group Inc. boosted its year-end forecast for 10-year Treasury yields on Thursday to 1.90% from 1.50%.Friday’s February payrolls report now looms as the next catalyst. Yields have already soared more than a half-point this year as a cheerier outlook for growth and inflation led traders to bring forward how soon they see the Fed lifting its policy rate. Many strategists had expected Powell to try to more forcefully tamp down yields before the Fed’s black-out period ahead of its March 17 policy decision. With no such effort emerging, market participants are left to ponder where policy makers’ pain threshold may be.“In this environment yields can certainly continue to test higher,” said Jonathan Cohn, a strategist at Credit Suisse. “How far the Fed is willing to allow stock markets to fall -- which is the poor man’s version of thinking about broad financial conditions -- is a key question.”During an appearance in a Wall Street Journal webinar Thursday, Powell said the recent bond-market swings “caught my attention.” He said he’s monitoring financial conditions and would be “concerned by disorderly conditions in markets.”Ten-year yields added 8 basis points on the day to 1.56%, and continued to creep higher in Asia hours touching 1.58%, bringing into view last week’s one-year high of 1.61%. With yields at current levels, there have been fresh concerns of convexity-related hedging flow which can undermine liquidity conditions and further roil riskier assets. Stocks slumped Thursday, with the S&P 500 Index briefly erasing its 2021 gains.Powell said he’d be concerned if there were a “persistent tightening in financial conditions that threatens the achievement of our goals.” But he didn’t mention any actions the Fed might take to curtail the climb in yields, which has lifted mortgage rates and risks dimming a bright spot in an economy still on the mend from the pandemic.Wall Street strategists have mulled options the Fed could take to push down long-term yields including: extending the duration of its bond purchases, or implementing a so-called “twist” operation -- involving selling part of the Fed’s shorter-dated holdings in favor of long-term Treasuries.“If yields continue higher too quickly, then that could be a problem for the Fed,” said Mark Zandi, chief economist at Moody’s Analytics. “It might undermine asset prices, possibly causing a major correction in stock prices and a freezing up of the housing market. This is not our base case, but it’s a concern and a risk.”Meanwhile, a market proxy for the anticipated annual inflation rate for the next half-decade exceeded 2.5% this week for the first time since 2008 -- aided by climbing oil prices.Traders are now pricing in a full quarter-point Fed rate boost in the first quarter of 2023. The Fed itself has signaled it intends to keep policy steady at least through the end of that year.”Market participants are putting the Fed to the test and saying, ‘OK, given this spike in inflation, if it’s not transient then you’re going to have to act sooner,”’ Scott Minerd, global chief investment officer of Guggenheim Partners, said in a Bloomberg Television interview.(Updates with Friday’s yield move)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
14h ago
Bloomberg
Bank of Japan Shares End Their Puzzling Rally, Dropping by Limit
(Bloomberg) -- The Bank of Japan’s head-scratching surge this week came to a halt on Friday, as the stock erased intraday gains to fall by its limit.The shares sank 19%, the most since December 1991, after rising by the daily limit in each of the four previous sessions.The volatile moves in the shares, or subscription certificates as the BOJ refers to them, has baffled market participants. While the BOJ is unusual in being a listed central bank, the stock pays a tiny dividend and holds no voting rights. In fact, the central bank doesn’t even hold shareholders’ meetings. The stock traded at an all-time low just in January.Usually little noticed or commented on, the central bank’s stock became a topic of conversation in parliament on Friday, where BOJ Governor Haruhiko Kuroda was delivering his semi-annual report on currency and monetary control.“The Bank of Japan’s subscription certificates are completely different from the normal shares of listed companies,” Kuroda said in response to a question about the long-term decline in the stock price during his time as governor. Unlike a normal stock, he said, the share price doesn’t reflect profits or the state of its balance sheet. “The price is not the responsibility of the bank.”Speculative MovesWhile technically a listed entity on the Tokyo Stock Exchange’s Jasdaq, the nature of the stock and its speculative moves are a long-standing mystery of Japan’s financial markets. A speculative surge was also witnessed in late 2012 and early 2013, when optimism over the Abenomics program of former Prime Minister Shinzo Abe was at its peak.“This isn’t a stock you can evaluate based on fundamentals,” Tomoichiro Kubota, a senior market analyst at Matsui Securities Co., said. “Seeing the BOJ stock dive like today, it looks like the upward climb is done for now.”The government holds a 55% stake, while individual investors have 40%. The subscription certificates can’t be bought at online securities firms, as they weren’t subject to the 2009 digitalization of traditional paper stock certificates. It’s the only issue for which Japan Securities Clearing Corp., the entity that clears transactions for all equities in the country, still requires physical delivery of paper certificates, which remain valid even now.This week’s short-lived rally comes after the Nikkei 225 Stock Average briefly touched its highest levels since the bubble era of the 1980s. In those days, when the benchmark traded at around 70 times earnings, some investors collected BOJ’s stock and framed their certificates as a collectible which were then worth 745,000 yen ($6,874) apiece.The moves have come ahead of a closely-watched policy review by the central bank on March 19, which may lead to changes in how it buys exchange-traded funds -- because as well as being listed, the BOJ is itself the largest single owner of Japanese shares.(Updates with closing price, quote in the seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
10h ago
Reuters
Biggest wealth fund puts Kirin on watch list over Myanmar link
The Norwegian central bank said on Wednesday it had put Japan's Kirin Holdings on a watch list for possible exclusion from its $1.3 trillion sovereign wealth fund over the beverage giant's business ties to Myanmar's military. Kirin on Feb. 5 said it would end its partnership with Myanma Economic Holdings Public Company Limited (MEHPCL), a company run by Myanmar's army, after a military coup deposed the democratically elected government. As part of its decision on whether to maintain its ownership in Kirin, the Norwegian fund will monitor the implementation of the company's plan to end the ties, Norway's central bank said in a statement.
2d ago
Bloomberg
Oil Sands Give OPEC a Boost With Half-Million-Barrel Output Cut
(Bloomberg) -- Major oil sands producers in Western Canada will idle almost half a million barrels a day of production next month, helping tighten global supplies as oil prices surge.Canadian Natural Resources Ltd.’s plans to conduct 30 days of maintenance at its Horizon oil sands upgrader in April will curtail roughly 250,000 barrels a day of light synthetic crude output, company President Tim McKay said in an interview Thursday. Work on the Horizon upgrader coincides with maintenance at other cites.Suncor Energy Inc. plans a major overhaul of its U2 crude upgrader, cutting output by 130,000 barrels a day over the entire second quarter. Syncrude Canada Ltd. will curb 70,000 barrels a day during the quarter because of maintenance in a unit.The supply cuts out of Northern Alberta, following a surprise OPEC+ decision to not increase output next month, could add more support to the recent rally in crude prices. OPEC+ had been debating whether to restore as much as 1.5 million barrels a day of output in April but decided to wait.The Saudi-led alliance closely monitors other major oil producers as it seeks to manage the entire global market, and surging production in North America was its biggest headache in recent years -- especially from U.S. shale but also from Canada.“The U.S., Saudi Arabia, Russia, Canada, Brazil and other well endowed countries with hydrocarbon reserves -- we need to work with each other, collaboratively,” Saudi Energy Minister Prince Abdulaziz bin Salman said after the group’s meeting on Thursday.Read More: Saudis Bet ‘Drill, Baby, Drill’ Is Over in Push for Pricier OilCanada’s contribution to balancing the market with less production, much like slowing output in the U.S., is not a deliberate market-management strategy but significant nonetheless.Even though the output cuts are short-term, the battered oil-sands industry shouldn’t be a concern for the Saudis in the long run either, judging from McKay’s outlook for the industry.“I can’t see much growth in the oil sands happening because there is going to be less demand in the future,” he said. “The first step is we have to get our carbon footprint down.”After years of rising output turned Canada into the world’s fourth-largest crude producer, expansion projects have nearly halted on the heels of two market crashes since 2014.Adding to its struggles, Canada’s oil industry is being shunned by some investors such as Norway’s $1.3 trillion wealth fund amid concern that the higher carbon emissions associated with oil sands extraction will worsen climate change. These forces help make future growth in the oil sands unlikely, said McKay, whose company is among the largest producers in the country.Oil sands upgraders turn the heavy bitumen produced in oil sands mines into light synthetic crude that’s similar to benchmarks West Texas Intermediate and Brent. Syncrude Sweet Premium for April gained 60 cents on Thursday to $1.50 a barrel premium to WTI, the strongest price since May, NE2 Group data show.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
7h ago
MarketWatch
Buy these 3 battery stocks to play the electric-vehicle party, but stay away from this company, says UBS
Despite the recent selloff in electric-vehicle stocks like Tesla and Nio, there is still intense investor interest in the sector, with demand for electric-vehicles expected to climb dramatically over the next decades.
58m ago
MoneyWise
How stimulus checks can give you a $14,000 windfall this year
Some households are collecting a big pile of federal money in 2021.
17h ago
MoneyWise
Joe Biden's stimulus check changes: Do you still qualify for $1,400?
The president has agreed to a compromise making millions ineligible for the third checks.
19h ago
Bloomberg
Portnoy-Backed ETF Sees Third-Highest Volume Ever in a Debut
(Bloomberg) -- A new exchange-traded fund seeking to ride the companies most loved by investors online has found plenty of its own positive sentiment in its first day of trading.About $438 million worth of shares in the VanEck Vectors Social Sentiment ETF (ticker BUZZ) changed hands on Thursday, making it the third best ETF debut on record, according to data compiled by Bloomberg.“Normally, this kind of blow-the-roof-off volume for the first day is for ETFs that open up a new asset class like gold or Bitcoin,” said Eric Balchunas, ETF analyst for Bloomberg Intelligence.The fund, which has been promoted by Barstool Sports Inc. founder Dave Portnoy, follows an index that uses AI to scan online sources like blogs and social media to identify the 75 most favorably mentioned equities.Because of its criteria for inclusion, the hottest names among the day-trading crowd like GameStop Corp. and AMC Entertainment Holdings Inc. don’t actually make it into the gauge. Its top holdings currently are Ford Motor Co., Twitter Inc. and DraftKings Inc.Nonetheless, the rapid uptake suggests VanEck has succeeded in tapping into the increasingly powerful retail investing cohort.“Given the explosion of individual, younger retail traders, it makes sense to see a pile of volume,” said Dave Lutz, macro strategist at JonesTrading. “Whether it is the WSB crowd embracing Dave Portnoy’s marketing of the ETF, or institutions playing it to bet on the direction of the trend (or hedge) -- we won’t know for a bit. I suspect it’s a bit of both.”The fund opened at $24.40. It was down 1% at $24.15 at 12:02 p.m.(Updates with latest figures, analyst comments.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
21h ago
FX Empire
NZD/USD Forex Technical Analysis – Sustained Move Over .7234 Could Trigger Surge into .7337 – .7367
The early price action suggests the direction of the NZD/USD on Thursday will be determined by trader reaction to the main 50% level at .7234.
1d ago
Investor's Business Daily
Getting A Third Covid-19 Stimulus Check Just Got Tougher — But You Might Still Influence How Big Yours Is
Congress is nearing passage of the third economic stimulus check it will send out to you and other taxpayers as part of its Covid-19 relief bill.
2h ago
FX Empire
Stocks Tumble, Gold Dumps , Dollar Jumps Amid Treasury Yield Spike as Powell Signals Inflation is Ahead
Powell and his policymakers have until March 17 to regain control of monetary policy or they could face a creditability issue.
21h ago
MarketWatch
Virgin Galactic chairman sold off more than $210 million worth of stock as prices plunged
Virgin Galactic Holdings Inc. Chairman Chamath Palihapitiya sold off a chunk of his shares this week, and played a part of the plunge in prices.
3h ago
LA Times
Texas watchdog says grid operator made $16-billion error
A firm hired to monitor Texas' power markets says the region's grid manager overpriced electricity over two days during last month's energy crisis, resulting in $16 billion in overcharges.
15h ago
Bloomberg
Platts Says Sorry to Oil Traders for Sudden Brent Overhaul
(Bloomberg) -- S&P Global Platts apologized to oil traders for the speed at which it announced an overhaul of a price that underpins a swath of the world’s crude oil transactions.The company said the plans, which among other things involve adding U.S. crude to the key Dated Brent benchmark, took many in the market by surprise and incurred anger. Platts said it had to take the steps to ensure there’s enough oil to make up the benchmark going forward as supply from the North Sea region declines.“The suddenness of the announced changes and the lack of a further consultation have caused anger and frustration for some and we are sorry for that,” Vera Blei, head of oil markets price reporting at Platts said on a call with market participants and the media on Wednesday. “You told us that we have some work to do to rebuild relationships and trust, and that work is very much under way.”Platts first announced a consultation on the changes in December, before confirming them last week. The plan took some traders by surprise as it will involve cargoes being priced at the point of delivery -- requiring the addition of shipping costs and making other fundamental changes to what the benchmark is. The modifications matter because the Dated Brent benchmark helps price more than two-thirds of the world’s crude.Among those who had originally voiced concern about the Platts plan was Intercontinental Exchange Inc., which houses multiple contracts tied to Dated Brent.Before the revamp was announced, ICE sent Platts a letter cautioning against a speedy overhaul, according to a person familiar with the matter. The move sparked frenzied trading of some contracts last week, before both Platts and ICE issued statements clarifying their plans.ICE also said in the letter it was surprised that Platts had chosen to add U.S. crude to the benchmark, without consulting on the addition of oil from Norway’s giant Johan Sverdrup field. That crude is heavier and more sulfurous than those currently included in Dated Brent, making its addition trickier, Platts said.(Updates with Johan Sverdrup detail in final paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
1d ago
Bloomberg
SPAC Boom and SoftBank’s Mega-Rally Boost Masayoshi Son’s Billions
(Bloomberg) -- Few fortunes are as volatile as Masayoshi Son’s.The SoftBank Group Corp. founder was briefly richer than Bill Gates at the start of the century before tech stocks crashed. In March 2020, as markets sank under Covid-19 and questions swirled over SoftBank’s investments, his wealth dipped to $8.4 billion, the lowest since 2016.Less than a year later, Japan’s second-richest person has more than quadrupled his fortune to $38 billion, according to the Bloomberg Billionaires Index, hitting the highest level since Bloomberg started tracking billionaire wealth in 2012.The surge is closely tied to the rally in SoftBank shares, which represent more than 95% of his net worth and have climbed almost fourfold from a low at the worst of the pandemic-fueled selloff. The Vision Fund -- the world’s largest investment pool for tech startups -- posted its best quarterly profit, while SoftBank sold assets, bought back stock and settled a legal dispute with WeWork Cos. It’s also gathered supporters along the way, with Paul Singer’s Elliott Management Corp. disclosing last year it took a stake as the stock was undervalued.“SoftBank’s current major assets have huge cashflow and will continue to grow,” said Thomas Hayes, chairman of Great Hill Capital. “If he balances his harvesting of winners, with appropriately timed share repurchases, he will avoid a repeat of 2000, even if tech stocks moderate.”SoftBank’s fate has been deeply intertwined with its founder, to the point the relationship recently raised corporate-governance concerns. Son, who’s also chairman and chief executive officer, is personally invested in a unit that poured about $20 billion into tech stocks and derivatives. The 63-year-old, who owns one-third of that division and has denied there was a conflict of interest, said the program was a way to put SoftBank’s cash pile to use.To amplify his leverage, Son uses a common tactic among the ultra-rich -- borrowing against his stock. He just does it much more than most other billionaires.Recently, though, he’s trimmed his pledges as shares of the Japanese giant have become more valuable. Son had committed about one-third of his stake in SoftBank to more than 16 financial institutions as of Feb. 9, down from 38% in September, according to regulatory filings. That still represents about $18 billion -- one of the highest figures among the 500 richest people in the world. The pledges are used as collateral for loans, whose size could be smaller than the value of the committed shares given the recent rally. Bloomberg doesn’t include the value of pledged stock in net-worth calculations.A representative for SoftBank declined to comment for this story.After closing at an all-time high on Wednesday, SoftBank shares slipped 5.3% Thursday amid a decline in the broader stock market. Its Vision Fund last month posted a record profit for the final quarter of 2020, thanks to a boost in the value of its stakes in newly-listed firms including food-delivery service DoorDash Inc. and Chinese online property agent platform KE Holdings Inc.“Since the Vision Fund launched, the number of golden eggs is in accelerating mode,” Son said at a briefing last month. “We are finally in the harvesting stage.”Some 15 companies have gone public from the Vision Fund, and SoftBank may see between 10 and 20 listings a year from its portfolio of 164 startups, he said. Coupang Inc., a South Korean e-commerce giant, is seeking a U.S. IPO and could be valued at more than $50 billion. Compass Inc., one of the largest U.S. real estate brokerages, has filed for a listing, and Chinese truck startup Full Truck Alliance could go public this year. SoftBank has also joined the SPAC bandwagon with plans for several blank-check companies.SoftBank has also had its share of troubles. The Vision Fund has written down its $1.5 billion holding in Greensill Capital and is considering dropping the valuation to near zero, people familiar with the matter have said. At its worst point last year, investors questioned several of SoftBank’s investments, including WeWork, whose IPO spectacularly imploded.The turnaround has been rapid. In addition to improving the outlook for the startups in the Vision Fund, the rally in tech stocks helped boost the value of SoftBank’s stakes in publicly traded firms like Uber Technologies Inc. The Japanese conglomerate also just settled a lawsuit with WeWork and its co-founder, Adam Neumann, paving the way for another attempt at a potential listing of the office-sharing company.“SoftBank Group may expedite its second attempt to list WeWork,” Anthea Lai, a senior analyst at Bloomberg Intelligence, wrote in a March 1 note. “The additional stake should tighten SoftBank’s control and facilitate potential merger talks with special purpose acquisition companies.”(Updates with stock move in 10th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
2d ago
MarketWatch
Investors may have a ‘buy’ signal, as these big tech stocks have dropped up to 32% in only three weeks
Now might be "a golden opportunity" to own the "secular tech winners" for the next 12 to 18 months, according to Wedbush analyst Daniel Ives.
4h ago
Bloomberg
Endo to Rework $3.3 Billion Loan as Opioid Litigation Looms
(Bloomberg) -- Endo International Plc is trying to get more breathing room on its debt as it contests with ongoing opioid and patent litigation and an expected drop in earnings.The drug company said it will issue new debt to refinance its $3.3 billion loan coming due in 2024, leaving the same guarantees and collateral in place while pushing out the due date, according to a statement Thursday. The financing, if completed, is not expected to increase Endo’s total debt load.The company is in talks for a $2.295 billion first-lien term loan managed by JPMorgan Chase & Co., for which commitments are due March 11, according to people familiar with the matter. Endo is also planning to borrow $1 billion in other senior secured first-lien debt, said the people, who asked not to be identified as the details are private.Endo is one of several pharmaceutical companies accused of downplaying opioids’ risks and over-selling their benefits, and finds itself tangled in expensive, ongoing litigation. With competitors like Purdue Pharma LP and Mallinckrodt Plc, manufacturers may pay a total of $20 billion in a settlement with states and other municipalities, according to Bloomberg Intelligence analyst Holly Froum.Endo, which had been reportedly trying to pull out of talks with other drug-makers and distributors seeking an industry-wide settlement, may pay less than $3 billion, Froum said. The company reached a prior agreement with New York related to the marketing of its Opana painkiller, which limits the state’s claims in an upcoming court trial, Froum said.The company “remains engaged in settlement discussions” and “is open to a reasonable resolution,” said Chief Legal Officer Matthew Maletta. If that’s not possible, Endo is prepared to defend itself in trial, he said in emailed comments.Reworking DebtsDublin-based Endo has been cutting costs and reworking its balance sheet amid the lawsuits and a generic drug business that has pressured earnings. It faces further uncertainty around patent litigation tied to its low-blood-pressure drug Vasostrict, which has a trial set for July.The refinancing makes Endo’s debt maturities over the next four years more manageable with existing and future cash flow, Moody’s Investors Service said in a report Thursday. The transaction will also extend a portion of its revolver expiration to March 2026, the rater said.Endo ended 2020 with $1.2 billion of unrestricted cash and is anticipating a decline in revenue and earnings this year driven by its generics unit. It’s now focused on growing Ebitda, or earnings before interest, tax, depreciation and amortization, Chief Financial Officer Mark Bradley said at a conference hosted by JPMorgan Chase & Co. this week.“We hope that by doing that, we also delever,” Bradley said. “Then we would look at buying back debt to the extent it makes sense.”Endo launched a $2.85 billion debt exchange in May to give itself more time to focus on a turnaround, pushing out its balance sheet by around five years. Its first-lien bonds due 2027 trade near 108 cents on the dollar, while the unsecured notes due 2028 are hovering around 86 cents, according to Trace.(Updates with company comment in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
19h ago
Barrons.com
Mortgage Rates Are Back Above 3%. Here’s Where They’re Headed Next.
Mortgage rates have risen past a psychological benchmark for the first time since they fell to historic lows during the pandemic. The average rate on a 30-year fixed-rate mortgage increased to 3.02% this past week, according to Freddie Mac’s Primary Mortgage Market Survey—the first time since July that the rate has risen above 3%. “Since reaching a low point in January, mortgage rates have risen by more than 30 basis points,” wrote Freddie Mac’s chief economist, in a release.
1d ago

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