Analysts expected another 150 bps hike in interest rate by the end of July 2019, which may bode well for Banks but certainly prove detrimental to highly leveraged companies
Fitch expects to affirm the ratings for most LatAm reinsurers during the Outlook horizon, though a few highly leveraged companies
could be downgraded or assigned Negative Outlooks.
Although highly leveraged companies
might consider organizing outside of the United States to avoid IRC section 163(j), opportunities to do so may be limited and are likely to diminish over time due to Action 4 of the OECD/G20 Base Erosion and Profit Shifting Project, Limiting Base Erosion Involving Interest Deductions and Other Financial Payments (http://bit.ly/2tH2Tuv).
On the monetary side, restricted credit in the local market and a hike in US Fed rate could be handled more efficiently by companies with sound balance sheets and stable operating cash flows compared to highly leveraged companies
According to experts, unless the country's economic growth takes bigger strides, many highly leveraged companies
may continue to battle debt.
One should focus on good quality companies, and one can take for example India, and avoid highly leveraged companies
. In a bull market it gets very bullish and then in a bear market, it becomes very difficult," Argal said.
Many highly leveraged companies
did badly relative to the rest of the market, and some of them are wellpoised to make the most of the lower interest rate cycle.
The entire economy was clogged till earlier this year and most of the bigticket deals that have happened this year have been stressed asset sales by highly leveraged companies
. Banks are also pushing companies to sell assets as buyers are emerging in the market" said Vineet Toshniwal managing director at Equirus Capital Pvt.
When Northern Rock's demise in 2007 was followed by the collapse of Lehman Brothers the following year, the days of cheap nance and highly leveraged companies
came to a spectacular and abrupt end.
Vitrano noted that he, chairman and chief executive officer John Standley, and president and chief operating officer Ken Martindale had experience managing highly leveraged companies
when they came to the drug chain in 2008 from regional grocer Pathmark Stores Inc., now part of A&R
He added that despite this, highly leveraged companies
and oil based stocks performed better on Tuesday.