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Yahoo
18 minutes ago
- Yahoo
The Securities That Banks Are Backing Away From: Credit Weekly
(Bloomberg) -- US banks, among the few companies that still sell preferred shares, are following JPMorgan Chase & Co.'s lead and retreating from the securities, even as investors are eager to buy them. Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals Trump's Gilded Design Style May Be Gaudy. But Don't Call it 'Rococo.' Massachusetts to Follow NYC in Making Landlords Pay Broker Fees NYC Commutes Resume After Midtown Bus Terminal Crash Chaos What Gothenburg Got Out of Congestion Pricing Capital One Financial Corp. redeemed a $500 million preferred share this week, resulting in the market shrinking on a net basis this year, according to data compiled by Bloomberg. If the trend continues, this will be the second year in a row that the market for US bank preferreds has shrunk, something that hasn't happened since the lenders were replacing obsolete capital after the global financial crisis. At the same time, preferred managers have received more cash to invest this year, as investors pile into higher-yielding assets that can perform well when rates are cut. Assets under management in the 10 largest funds in the space have risen by more than 10% on average year-to-date, based on Bloomberg-compiled data. Capital One's redemption follows JPMorgan cutting its preferreds outstanding by more than a quarter last year. Banks are broadly paying off the securities because they don't need as many of them anymore: capital regulations that made preferred shares attractive to issue, including the Basel III endgame rules, are being eased now in the US. The securities are expensive for banks, because they pay relatively high dividends. But banks were among the few companies still selling preferred equities, a sort of equity with some debt-like characteristics, that helped finance the industrialization of America. For earlier generations of investors, the securities were an attractive source of income, offering more than a company's notes would pay, but also coming with more risk. If the company fell on hard times, preferreds were close to the back of the line to be repaid, for instance. Non-financial companies have been backing away from preferreds, in favor of securities known as 'hybrid bonds.' Hybrids are among the last bonds to be repaid if a company runs into trouble, but aren't as far back in line as preferreds, which are equity. Issuance became viable for companies once Moody's Ratings changed its methodology in early 2024 and the securities quickly became one of the hottest sources of capital-raising in the US. With preferreds growing less popular, the managers of the largest preferred-focused funds are looking for alternatives. They are banking on the relatively high leeway they have to invest in securities similar to preferreds, such as hybrid bonds. 'That's the nice thing about our universe. When people talk about preferred securities, the definition is very grey,' said Douglas Baker, head of preferred securities at Nuveen. 'If things get tight in one area, we typically have plenty of places to pivot to,' he said. It's a view shared by Mark Lieb, founder and CEO of Spectrum Asset Management and a veteran of the preferred market, who expects the supply of hybrids from US utilities to expand in order to cover the growing demand for infrastructure investments supporting AI. That growth can outweigh any loss of issuance from US banks, as their regulatory needs keep decreasing. 'We will have to see what the final rules and regulations are but on the utility side it's going to more than offset it,' Lieb said in an interview. 'Capex is going to go up.' Non-financial corporates in the US sold about $30 billion of hybrids last year, with another $10 billion sold so far in 2025, data compiled by Bloomberg shows. This far exceeded what was repaid through the exercise of call options. Week In Review JPMorgan Chase & Co. helped Warner Bros. Discovery Inc. restructure its debt by offering creditors a deal that would leave them with billions less than they were owed, despite the notes having an investment-grade rating. A trio of banks joined Morgan Stanley in a $5 billion debt deal for xAI Corp., after the company requested their participation to maintain relationships that could help with financings down the line. New World Development Co. closed a record $11 billion refinancing deal, averting a potential crisis in Hong Kong's fragile property market. SoftBank Group Corp. sold $4.2 billion of bonds in dollars and euros, as the technology investment firm turns to global debt markets to accelerate its artificial intelligence push. JPMorgan Chase & Co. and UBS Group AG are among a group of Wall Street banks sounding out investors ahead of a mid-July launch for a $4.25 billion debt package backing Sycamore Partners' buyout of UK pharmacy Boots. The European Central Bank held onto two bonds of embattled payments company Worldline SA while prices slumped after news reports alleging the company covered up fraud by some of its customers. Goldman Sachs Group Inc. is leading a potential transaction for Gray Media Inc. to help the company refinance some of its existing debt, aiming to raise at least $750 million in the high-yield bond market. Flora Food Group BV is the first issuer in Europe rated one of the lowest levels of junk to sell bonds in nearly a year, a sign of investors' insatiable appetite for risk. Vodafone Group Plc pulled in multi-billion investor bids across a multi-currency debt sale, the proceeds of which will be used to finance a sweeping €2 billion ($2.35 billion) debt buyback. Wolfspeed Inc., a chipmaker caught in President Donald Trump's push to reshape Biden-era tech subsidies, filed for bankruptcy to enact a creditor-backed plan to slash $4.6 billion in debt. AMC Entertainment Holdings Inc. said it reached an agreement with creditors to end litigation that resulted from the movie theater chain's debt restructuring last year. Merit Street Media, the startup founded by celebrity psychologist Phil McGraw, filed for bankruptcy in Texas. On the Move Josh Harris' 26North Partners is hiring bankers from JPMorgan Chase & Co. and Deutsche Bank AG as it continues to grow its investment-grade bets. The platform has tapped Todd Marr, formerly global head of debt private placements at JPMorgan, and Ravi Suresh, former head of insurance private asset solutions at Deutsche. BNP Paribas hired Denise Chow from Morgan Stanley's leveraged finance team, one in a string of recent moves across lenders' debt capital markets desks. Uros Stosic, a longtime leveraged loan trader, left Morgan Stanley to join Truist Financial Corp.'s team in New York as a managing director. He reports to Eddie Ferguson, head of loan and sales trading. SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too For Brazil's Criminals, Coffee Beans Are the Target America's Top Consumer-Sentiment Economist Is Worried Sperm Freezing Is a New Hot Market for Startups Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate ©2025 Bloomberg L.P. Error al recuperar los datos Inicia sesión para acceder a tu cartera de valores Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos
Yahoo
20 minutes ago
- Yahoo
The US Army's done with Humvees and the Robotic Combat Vehicles. Here's what leaders want instead.
The US Army is taking a hard look at what systems and platforms it doesn't need for future conflicts. The Army secretary and a top general gave BI some insight into this process. The service is undergoing a major transformation initiative after a directive earlier this year. US Army leaders say Humvees and Robotic Combat Vehicles aren't useful for future fights, but the Infantry Squad Vehicle is. Ongoing decisions about what stays and what goes are part of a larger transformation initiative that has the Army reviewing its force structure and cutting certain programs it deems no longer necessary for the kinds of wars the US military wants to be ready to fight should worse come to worst. Secretary of the Army Daniel Driscoll and Gen. James Rainey, the commanding general overseeing Army Futures Command, talked to Business Insider about some of what is getting axed and why. Driscoll pointed to the Robotic Combat Vehicle, or RCV, program, which launched in 2019 with the goal of integrating autonomous and remotely operated capabilities into the Army's ground systems. Three versions were initially planned — an expendable light variant, a durable medium variant, and a lethal heavy variant designed for combat against an enemy armored vehicle. But the development of the RCV hit snags. "We know we need autonomy, we know that we need the ability to move things in a way that is not controlled by human beings," Driscoll said. But the requirements the Army put together for it ended up making it just this "incredibly large, incredibly heavy, incredibly expensive, relatively exquisite tool," he said. By the time the Army went to purchase them, the threats to the RCV, like small, hostile drones, had grown substantially. In Ukraine, slow, heavy, expensive vehicles have been prime targets for cheap exploding drones. "It might have been there in the beginning and we got it wrong from the very beginning," he said, "but at a minimum, by the time it came due for us actually purchase a lot of these and get them into formations, it just no longer made sense anymore." He called the move to end the program "a hard decision." The Humvee, or High Mobility Multipurpose Wheeled Vehicle, is also being phased out. "It's 40 years old. It was useful in its time," Rainey said. "If you look at the ubiquitous sensing drones just in Ukraine and Russia, the survivability of a wheeled vehicle is very low." The Army also recently ended the M10 Booker Mobile Protected Firepower program just before it was set to go into full-rate production and after spending well over a billion dollars on the project. The decision was made in response to ongoing global conflicts "and in support of the strategic objectives outlined in the Army Transformation Initiative," according to a memo issued by Secretary of Defense Pete Hegseth earlier this year. The memo outlined the focal points, timelines, and priorities of the Army going forward, including reducing and restructuring attack helicopter formations and augmenting them with unmanned aircraft, putting thousands of drones into the hands of soldiers, and focusing on the Indo-Pacific theater and China. The efforts in the directive are estimated to cost around $36 billion over the next five years and represent one of the largest Army overhauls since the end of the Cold War. Army officials have said it's designed to increase lethality and readiness in the service and is focused on the needs of individual warfighters. In the interview with BI, Driscoll and Rainey identified one platform that represents what it wants more of. "We have a requirements and acquisitions success story with the Infantry Squad Vehicles," Rainey said. The relatively new M1301 Infantry Squad Vehicle entered service in 2020. Rainey said that the platform was designed well and requirements were useful and thoughtful. "We went fast, but we iterated with soldiers continually through the process. We ended up with a very useful vehicle," he said. Driscoll said that in conversations with soldiers, the Army learned that they wanted a vehicle to prioritize speed and all-terrain driving over protection. It speaks to, the service secretary said, the Army "trying to build a menu of offensive and defensive solutions." For some missions, something like the Infantry Squad Vehicle will be more effective. And for others, a heavier, more armored platform could still be valuable and available. Much of what Driscoll and others say they're focused on comes out of efforts to be smarter and more cost-effective in Army purchases. "We feel a large enough existential threat, and it is important enough that we can no longer make decisions simply based off where jobs might exist or what private companies may benefit from our decisions," he said. "Instead, we have to optimize for soldier lethality in the fight ahead." Lethality is a guiding principle for the US Department of Defense under Hegseth and the Trump administration. It was a core objective for the Biden administration and first Trump one, as well as past administrations, though the interpretations were different. Generally, it serves as a subjective measuring stick for DoD programs and projects, the aim being to be able to effectively defeat an enemy. Right now, that long-standing Pentagon buzzword is the deciding factor for what the Army and other services prioritize. Read the original article on Business Insider
Yahoo
27 minutes ago
- Yahoo
July Market Recap – What Small Carriers Did Right (and Wrong)
July didn't pull any punches. Volatile rates. Tightening capacity. Diesel spikes that tested everyone's cash flow. For small carriers, it was either a month of smart moves—or hard lessons. What separated those who protected margins from those who scrambled to survive? Discipline. Strategy. Execution. In this recap, we break down what small carriers got right, where they went wrong, and how to use July's market as a launchpad for smarter, leaner operations heading into peak season. The carriers who won in July didn't chase freight across five states. They stayed close to home, worked repeat lanes, and locked in consistent power-only or short-haul freight that kept wheels moving and fuel costs manageable. Real example:One 6-truck fleet in Tennessee turned down 800-mile loads in favor of a tight 250-mile triangle. By week three, they had locked in a daily run with a regional food distributor—high frequency, predictable rates, and lower maintenance risk. Rates weren't great, but downtime was gold for carriers who used it wisely. July was when smart owners picked up the phone—not just for loads, but to follow up with brokers, check in with old shippers, and build actual relationships. Tactical move:Carriers that updated their shipper list, ran lane reports, and scheduled two weekly prospecting hours are already seeing better offers roll in. July's heat didn't just test engines—it tested drivers too. Smart carriers saw an uptick in harsh braking, speeding violations, and HOS mistakes. But instead of punishing, they coached. Winning script:'Let's review your last roadside. That 68 in a 55 dinged our CSA—next time, ease it down through that construction zone. If we drop that unsafe driving score, we qualify for a better contract I'm bidding on now. You're key to that.' Small tweaks in conversation led to real results. Fewer violations. Stronger scores. Gross doesn't mean anything if the net ain't right. Carriers that tracked cost-per-mile daily in July were able to spot trouble early—especially when diesel jumped mid-month. One carrier insight:'We noticed we were spending $0.12 more per mile after switching fuel cards. We swapped vendors mid-cycle and got back on track before the damage got worse.' The lesson: eyeball every line item. Especially when rates are thin. The ones who finally ditched Excel and stopped printing BOLs from the truck stop? They ran tighter ops, tracked KPIs weekly, and didn't wait until invoicing to know how much they made. If you're still writing odometer readings by hand, July exposed who cleaned up dispatch and billing with real TMS tools didn't just move freight—they moved forward. Many carriers jumped on cheap freight thinking 'at least we're moving.' But they didn't map out round-trip profitability. They didn't calculate true cost after tolls, fuel, or layover risk. And they got burned. Reminder: A load that pays $3.50/mile out but nothing back is a trap—especially in July. You don't fix CSA scores in court—you fix them in the cab. The carriers who skipped safety meetings or waited for violations to add up are now looking at inspections that cost them business. Harsh but true:If you haven't talked CSA with your drivers in the last 30 days, you're already behind. If you spent July refreshing the load board instead of making at least five new shipper contacts a week, you wasted a golden window. Brokers were overloaded. Shippers needed help. But they only awarded contracts to carriers who showed up. Missed opportunity:Small carriers who emailed lane data, FMCSA snapshots, and insurance certs to local shippers? They got callbacks. Some carriers panicked when they saw market softening and took anything above $2.00/mile—even if it wrecked their week. Others got greedy on hot lanes and sat empty while better offers passed them by. Truth: Strategy beats emotion. Always. The diesel spike in late July shouldn't have surprised anyone—but many small carriers got caught off guard, especially those who skipped monthly fuel projections. One owner's mistake:'I budgeted off spring fuel prices and didn't re-forecast. We were $6,000 short by the 20th of the month.' What to Do Now: Turning July Lessons Into August Strategy Audit every mile you drove: Where did you run hot? Where did you lose? Schedule weekly safety talks: Make CSA part of the culture, not a reaction. Build a Q3 shipper list: You need 25 contacts minimum. Reach out weekly. Re-run your cost per mile: Adjust for July fuel trends and overhead spikes. Block time for outreach: Minimum 2 hours/week cold calling or emailing. July gave small carriers a choice—adjust or absorb the damage. Some leveled up their back office, coached their drivers, and trimmed the fat from their lanes. Others spun their wheels, hoping for a rate bounce that never came. Don't let the next month catch you with the same bad habits. Take the wins, fix the misses, and make August your best-run month yet. This market ain't easy—but with the right systems, the right mindset, and the right action, it's still winnable. The post July Market Recap – What Small Carriers Did Right (and Wrong) appeared first on FreightWaves. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
