FT News Briefing
Private credit’s growing ‘IOU’ habit
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.
10:15
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Quick takeaways
- ASML's significant stock drop highlights the semiconductor sector's current volatility and uncertainty about future industry demand.
- The rise of payment-in-kind loans in private credit offers cash-strapped companies more flexibility, but poses risks for lenders involved.
Deep dives
Gloomy Semiconductor Outlook
The outlook for semiconductors has taken a downturn, particularly highlighted by Dutch chipmaker ASML, which reported that its orders were only half of investor expectations in the previous quarter. This decline is reflective of broader industry struggles, as companies like Intel and Samsung have also faced significant challenges, leading to a 16% drop in ASML's stock. Investors have reacted accordingly, causing a ripple effect that saw shares of major U.S. chipmakers like NVIDIA and AMD fall by over 4.5%. This situation underscores the ongoing volatility and uncertainty within the semiconductor sector, raising concerns about future demand and industry stability.
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