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Biotech / Medical : Biotech Valuation
CRSP 58.17+3.9%Dec 4 3:59 PM EST
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To: IRWIN JAMES FRANKEL who wrote (6316)5/12/2002 2:23:26 PM
From: Robohogs   of 52153
 
As part of my job, I make loans for mdeium and large-sized corporations ($150+ MM in size of loan), mainly in the highly leveraged category. What I am seeing is very little demand for the loans from corporations and very high demand by lenders (but mainly of the mutual fund and leveraged bond fund type). So, good smaller credits can get money, but at higher cost from "institutional" buyers. Larger, troubled credits are the ones having difficulty as well as just larger companies in general because the supply of capital from commercial banks has dried up for several reasons:

Fleet/Bank Boston/Shawmut/et al
JP Morgan/Chase/Mannie Hannie/et al
Deutsche Bank/BT
B of A/Nations/et al
exit by Banc One from many areas
exit of Japanese banks (big factor over longer period)

So, the credit crunch is real but part of it is a lack of demand for funds at a given price, part is a lack of M&A activity which drives volumes, part is unwillingness to give the Q/WCOM/TYC's of the world money, part is the collapse of the CP market, etc.

I am beginning to see activity pick up in the leveraged loan and HY markets for general industrial companies. Only when the economy truly picks up will volumes again start growing.

JMVHO

Jon
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