NEWSLETTER of August 18, 2023

The following content has been added at finexpert:

Oliver Wyman
RESTRUCTURING REPORT 2023
What are the main challenges companies have faced and how have they fared in recent years? What financing options are still available for companies under pressure, and what are their biggest concerns for the future? These are the questions addressed in this year's restructuring brochure. It is based on a survey of experts across Europe, supplemented by analysis from Oliver Wyman. >more

PwC
TRANSPORT & LOGISTICS BAROMETER: 2023 MID-YEAR ANALYSIS
Digital transformation, new market players, changing business models: transportation and logistics are undergoing change. What impact are the deals having in the industry? How is digitalization changing the face of an entire industry? With our Transport & Logistics Barometer, we provide answers - and not just to these questions. The Barometer provides a 360-degree view of the entire industry and analyzes what impact social change and global megatrends are having on the industry. >more

Bain & Company
STUCK IN PLACE: PRIVATE EQUITY MIDYEAR REPORT 2023
After a year of sharply rising interest rates, a banking crisis, and widespread geopolitical turbulence, it’s no surprise that private equity (PE) activity continued to slump in 2023’s first half. Uncertainty is the enemy of dealmaking, and uncertainty has been swirling through global markets in abundance. >more

Bain & Company
GLOBAL RECESSION WATCH: JUNE 2023
The world remains in a period of immense economic uncertainty, with the consensus shifting rapidly in global markets. Economist polls have suggested the likelihood of a recession in the US and eurozone for nearly a year. The question of whether the US will fall into a recession remains open. The US 10-year minus 2-year Treasury yield spread has been inverted since July 2022, which is typically indicative of a recession within 12 months. Inflation in the US nearly reached the heights of the early 1980s, peaking at 9.1% year over year (YOY) in June 2022, then falling to 3% in June 2023. >more

CONTRACTING COSTS, COVENANT-LITE LENDING AND REPUTATIONAL CAPITAL
Dominique C. Badoer, Mustafa Emin, and Christopher M. James
2023
Using a large sample of leveraged loans, we provide evidence that, despite having fewer creditor control rights, covenant-lite loans have similar recovery rates and significantly lower spreads than loans with maintenance covenants. We find that the propensity to borrow covenant-lite is related to various proxies for the reputational capital of a borrowing firm’s private equity sponsor. We construct a simple model to illustrate the relationship between reputational capital, covenants, and loan spreads in the leveraged loan market. Our model illustrates how reputational capital can substitute for covenants in mitigating agency costs of debt, leading to lower loan spreads for covenant-lite loans. >more

GENDER AND EXECUTIVE JOB MOBILITY: EVIDENCE FROM MERGERS AND ACQUISITIONS
Xiaohu Guo, Vishal K. Gupta, Sandra Mortal, and Vikram K. Nanda
2023
The increasing presence of women in executive positions has fostered interest in understanding how men and women fare in the managerial labor market. We examine gender differences in managerial job mobility by focusing on managers displaced (almost 90%) when their firms are acquired. Comparing labor market outcomes for similarly-ranked managers from the same target firm and within the same functional area, we find that career disruption results in a larger drop in rank for female managers, despite similar job search efforts. Gender differences are moderated for managers hired by firms with more women in upper echelon positions. Women with rich prior managerial experience and service on external boards also fare well. Our results point to a significant (implicit) ‘gender penalty’ for women in terms of managerial job mobility, but also indicate contexts in which the penalty may be alleviated, and even reversed. >more