National / International News

Airlines halt flights to Peshawar

BBC - Thu, 2014-06-26 04:34
Qatar Airways joins Emirates and Etihad in stopping its jets flying to the Pakistani city of Peshawar after a deadly attack on an airliner.

'Drastic action' needed on Ebola

BBC - Thu, 2014-06-26 04:32
"Drastic action" is needed to contain the spread of deadly Ebola in West Africa, according to the World Health Organization (WHO).

Libyan human rights activist killed

BBC - Thu, 2014-06-26 04:28
Prominent Libyan human rights lawyer Salwa Bughaighis is assassinated by unknown men in her home in Benghazi.

Why the NHS must heed the lessons of Savile

BBC - Thu, 2014-06-26 04:26
Why NHS 'must learn lessons' of Savile

Why bank loans are getting riskier

Marketplace - American Public Media - Thu, 2014-06-26 04:25

The Office of the Comptroller of the Currency has issued a new report that says banks are taking bigger risks when they lend. They're doing that in two ways: lending more in auto loans to individuals, and lending more in leveraged loans to companies. And, increasingly, they're making those corprate loans "covenant-lite." Stopped you in your tracks, huh? Let me explain:

Q. First, what's a leveraged loan?

A "leveraged loan," also often known as a high-yield loan (if you're talking dirty, a junk loan), is a risky loan, borrowed by a company that's heavily in debt. Because of the risk, leveraged loans come with high interest rates. They also usually come chock-full of covenants.

Q. Which raises the question: What's a covenant?

A covenant is a requirement that the borrower has to meet every month. Perhaps is a certain debt-to-earnings ratio, or a minimum amount of gross income.  It can be anything the lender decides on. Covenants act like canaries in the coal mine for lenders, giving them early warnings that a company might run into trouble and possibly default on the loan.

Q. Got it... so what's a covenant-lite loan?

A covenant-lite (cov-lite, in the jargon) loan is like a coal mine with few or no canaries. So there will be little or no advance warning of problems in these loans: the first the lender hears about any issues is when the loan is on the brink of default.

Q. So why would anyone want a covenant-lite loan?

Well, borrowers love cov-lite loans, because they're easier to live with. There are fewer pesky rules and regulations to follow, and in some cases the loans are just pure money, with no strings.  Lenders don't really like them, for obvious reasons, but right now they're over a barrel. They're stuffed full of cash that they have to put to work in a very low-interest rate environment. There are precious few investment opportunities out there that will make the much money. And that allows the borrowers to force the lenders' hands. If you want a real estate analogy, it's a buyer's market. The buyers are the borrowers, and they're getting pretty much anything they want in these loans.

Q. Finally, then, why should I care?

Because all this means that risk is being baked into the system again. Leveraged loans are already risky.

When they're structured with few covenants, they're even riskier.

And when banks are loaded down with risky investments, well, we all remember how dangerous unfettered risk can be... don't we?

'We Welcome' Syrian Airstrikes On ISIS, Iraqi Leader Maliki Says

NPR News - Thu, 2014-06-26 04:17

Iraqi Prime Minister Nouri al-Maliki says that he didn't ask for the airstrikes along the border — but he doesn't have a problem with them, either.

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Is it always racist to black up your face?

BBC - Thu, 2014-06-26 04:13
Is it always racist to black up your face?

Standard Chartered warns on profits

BBC - Thu, 2014-06-26 04:06
Standard Chartered says first-half operating profits will be 20% lower than a year earlier, blaming a slump in income from its financial markets business.

'No Savile abuse at city hospital'

BBC - Thu, 2014-06-26 03:54
There is no documented evidence to back-up claims Jimmy Savile inappropriately touched a patient at Cardiff Royal Infirmary in the 1960s, a report finds.

Sensors help smartphone security

BBC - Thu, 2014-06-26 03:53
Researchers develop a smarter "kill switch" for phones that knows when your handset is in the hands of a thief.

Missing teen's mum in 'closure' plea

BBC - Thu, 2014-06-26 03:52
The mother of a teenager who has been missing since 1989, and is believed to have been murdered, says all she wants is "closure".

How much sugar do we eat?

BBC - Thu, 2014-06-26 03:52
Exactly how sweet is what you're eating?

Somali militants attack siege town

BBC - Thu, 2014-06-26 03:49
At least two international peacekeepers are killed in an Islamist militant attack on a town in central Somalia which has been under siege since March.

VIDEO: Hacker T Dog meets Andy Murray

BBC - Thu, 2014-06-26 03:48
BBC's Hacker T Dog meets defending Wimbledon champion Andy Murray who is a well known dog lover.

VIDEO: Wrong on Brooks, but no apology - Watson

BBC - Thu, 2014-06-26 03:47
Tom Watson who previously claimed Rebekah Brooks knew about News International hacking, says he was wrong about her.

Caption Challenge: Shelling out

BBC - Thu, 2014-06-26 03:40
It's the Caption Challenge. Oh yes it is.

Ghana send Boateng and Muntari home

BBC - Thu, 2014-06-26 03:38
Ghana expel Kevin-Prince Boateng and Sulley Muntari from their World Cup squad for alleged indiscipline.

VIDEO: House of Commons

BBC - Thu, 2014-06-26 03:33
A minister reveals the scale of abuse carried out by Jimmy Savile on NHS premises.

Serial rapist 'may never be freed'

BBC - Thu, 2014-06-26 03:30
A man faces a lengthy jail term after he admits assaulting and raping four girlfriends over a 20-year period.

Man, 73, missing on holiday in Crete

BBC - Thu, 2014-06-26 03:23
A 73-year-old Denbighshire man has gone missing while on holiday on the Greek island of Crete, prompting a police investigation.

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