Thursday, November 20, 2008

Thursday Tidbits - 11/20/08 Edition

GGP has hired Sidley Austin as BK counsel. Now, this does not mean they will file. But, they've got over a billion in debt coming due by month's end, and the company's worth about $100 MM right now (not that there's any correlation; I just like to say that, and hey, lenders are worried too). I'm actually surprised this hadn't come out sooner.

Why else this is a problem? Because spreads are insane, apparently driven by two deals possibly defaulting early in the loan cycle. Take a look at the underwriting and you'll see why. Maybe this is the sell signal we need to get people buying something, albeit at dirt cheap rates. But lending has tightened even though bankers claim they are lending.

As for me? I think I will apply for bank status and then fly to DC in a private jet and ask for TARP money. What the heck? And what word should I use for this? Irony? Hubris? Stupid? All of the above?

UPDATE: the contraction of lending activity is 53%. I just could not find the link earlier.

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