Latest news with #VictorKhosla
Mint
21-06-2025
- Business
- Mint
Commercial Real Estate Distress Is Spreading: Credit Weekly
(Bloomberg) -- The pain in US commercial real estate credit continues to bubble to the surface after a surge in borrowing costs and the rise of work from home left lenders vulnerable to losses. Delinquencies continue to increase, though the rate has moderated, researcher Green Street said this past week. Distress is also climbing, rising 23% to more than $116 billion at the end of March from a year earlier, data compiled by MSCI Real Capital Analytics show. That's the highest in more than a decade. Investors including Victor Khosla of Strategic Value Partners LLC have warned that debt maturities will lead to a 'tsunami' of problems for US offices in particular. There are signs that's spreading. The past-due and nonaccrual rate for commercial real estate portfolios reached the highest since 2014 earlier this year, the Federal Deposit Insurance Corp. wrote in a report last month, citing multifamily as an increasing source of pain. Past-due and nonaccrual loans are so far past due that banks have stopped booking interest owed because they doubt they'll ever receive it. Policy uncertainty, meanwhile, is also holding back activity in the underlying market as businesses delay decisions across districts, the Federal Reserve noted in its May Beige Book survey. For example, some of the reserve banks stated that demand for warehouses was affected by the potential impact of tariffs. Click here to listen to a podcast on the dangers facing private debt funds when the cycle turns The proposed Section 899 'revenge tax' in President Donald Trump's tax-and-spending bill could also 'trigger wider foreign investor pullbacks, impacting all US real estate lenders,' said Harsh Hemnani, a senior analyst at Green Street. German commercial property lender Deutsche Pfandbriefbank AG announced this past week that it's quitting the US market and will wind down, securitize or sell its €4.1 billion ($4.7 billion) portfolio there, warning it could make a loss this year due to the expected cost of the decision. Still, 'the timing of the exit likely indicates a belief that current market conditions offer a favorable window for divestment' amid improved liquidity and competition in the debt market, Hemnani said. That's in part because direct lenders have been raising more capital to invest in CRE, a trend that's causing some wariness. On Thursday, the Financial Stability Board cautioned that shadow lending to the industry globally 'may amplify and transmit shocks to banks.' Some traditional lenders continue to kick the can down the road in the US rather than take impairments. The wall of CRE debt continues to rise, in part because some credit providers have extended the duration of loans, the Mortgage Bankers Association said on Tuesday. Another headwind for traditional lenders is large unrealized losses on securities portfolios that they're holding to maturity or seeking to offload, with the FDIC saying last month that the losses stand at more than $410 billion. CRE is likely to be a similar source of pain. Loss rates on commercial and residential mortgage-backed securities suggest the unrealized losses on banks' mortgage books are likely to be as large or larger than in securities, academics including Lawrence White of New York University's Stern School of Business wrote last week. --With assistance from John Gittelsohn and Patrick Clark. More stories like this are available on
Forbes
16-06-2025
- Business
- Forbes
2025 Forbes Iconoclast Summit: Best Ideas: The Next Opportunity in Credit
| Jun 16, 2025, 02:15PM EDT Forbes Executive Editor Matt Schifrin is joined by Strategic Value Partners Founder & CIO Victor Khosla at the 2025 Forbes Iconoclast Summit in New York City.
Mint
11-06-2025
- Automotive
- Mint
Auto Parts Supplier Marelli Files for Chapter 11 Bankruptcy
(Bloomberg) -- Marelli Holdings Co., the struggling auto parts supplier for Nissan Motor Co., Stellantis NV and other carmakers, has filed for Chapter 11 bankruptcy protection in the US as it seeks to slash its debt burden and restructure under new ownership. About '80% of the company's lenders have signed an agreement to support the restructuring, which will deleverage Marelli's balance sheet and strengthen its liquidity position,' Marelli said in a statement. It added it does not expect the process to have any operational impact on its business. Marelli has received a commitment for $1.1 billion in debtor-in-possession financing from its lenders. Upon Court approval, this amount, coupled with cash generated from the company's ongoing operations, is 'expected to provide sufficient liquidity to support the company through the Chapter 11 process,' Marelli said. The auto parts supplier has been caught up in industry upheaval as electrification and automation force global carmakers to shift their strategy to cope with declining sales in key markets. One person familiar with the matter said earlier this week that global investment firm Strategic Value Partners LLC, led by Victor Khosla, will effectively become the new owner of Marelli. KKR & Co., the US-based private equity group that created Marelli in 2019 by merging its Calsonic Kansei and Magneti Marelli units, will transfer its shares to the consortium of lenders as part of the proposed deal, the person said. Representatives for KKR declined to comment. Strategic Value Partners didn't respond to an email seeking comment. Marelli, which employs more than 50,000 people, had sought unsuccessfully to restructure over the past few years as orders from customers fell. The manufacturer based in Saitama, Japan, operates around 170 facilities globally that supply lighting systems, air conditioning, electric motors, suspensions and other components to carmakers. Apart from SVP, Marelli's creditors include Deutsche Bank AG, Mizuho Financial Group Inc. and other lenders. The consortium also includes Seoul-based MBK Partners Ltd. and New York's Fortress Investment Group LLC, the person said. Marelli filed for court-led rehabilitation in 2022 and at that time, its total debt was around ¥1.1 trillion ($7.6 billion), the most ever for a Japanese manufacturer. That was since reduced to around ¥650 billion. 'After careful review of the company's strategic alternatives, we have determined that entering the Chapter 11 process is the best path to strengthen Marelli's balance sheet by converting debt to equity,' Marelli CEO David Slump said in the statement. 'Taking this action now provides access to new liquidity to fund our long-term growth and innovation pipeline.' (Updates with detail from official statement.) More stories like this are available on
Bloomberg
10-06-2025
- Automotive
- Bloomberg
Auto Parts Supplier Marelli Plans Chapter 11 Bankruptcy Filing
Marelli Holdings Co., the struggling auto parts supplier for Nissan Motor Co., Stellantis NV and other carmakers, plans to seek Chapter 11 bankruptcy protection in the US to slash its debt burden and restructure under new ownership, according to people familiar with the matter. Should the proposal go through, global investment firm Strategic Value Partners LLC, led by Victor Khosla, will effectively become the new owner of Marelli after it led a deal that satisfied creditors, one of the people said, who asked not to be identified because the information isn't public.
Yahoo
08-05-2025
- Business
- Yahoo
Strategic Value's Khosla Expects Higher Rate of Restructurings
Strategic Value Partners founder Victor Khosla says markets are facing a "sea change." Khosla also discusses his firm's distressed investment pipeline and the private equity industry. He speaks with Carol Massar and Romaine Bostick at the Milken Institute Global Conference in Beverly Hills, California.
