FT News Briefing Private credit’s growing ‘IOU’ habit
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Oct 16, 2024 In this engaging discussion, Amelia Pollard, a due diligence reporter specializing in private credit, teams up with Christian Davies, the FT's bureau chief covering the electric vehicle industry. They explore the troubling trend of deferred payments among cash-strapped companies and delve into the risks associated with private credit loans. The conversation also highlights exciting advancements in EV charging technology, with Asian battery makers racing to create ultra-fast charging solutions that could transform the market for electric vehicles.
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Semiconductor Market Downturn
- ASML's lowered sales forecast impacted semiconductor demand.
- This caused a ripple effect, affecting US chipmakers like NVIDIA and AMD.
Rise of Payment-in-Kind Loans
- Private credit funds are increasingly offering payment-in-kind loans.
- These loans allow borrowers to defer interest payments, raising concerns about potential risks.
Mixed Bank Earnings
- Goldman Sachs saw a 45% profit jump, driven by its equity trading business.
- Other banks like Citigroup and Bank of America also beat expectations, but profits still fell.