Daily Briefing - June 17, 2020

Real Vision: Finance & Investing

Real Vision

Investing, Business News, News, Business

4.1 • 1.1K Ratings

🗓️ 17 June 2020

⏱️ 31 minutes

🔗️ Recording | iTunes | RSS

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Summary

Senior editor Ash Bennington joins Tommy Thornton, founder of Hedge Fund Telemetry, to discuss the latest in markets, macro, and coronavirus. Thornton argues that the need for intervention in repo markets starting back in the fall of 2019 indicated that the market wasn't healthy going into the coronavirus shutdown— and that if it was, the level of stimulus markets have received would’ve been unnecessary. Thornton also talks about how the market is currently too hot and what the risks are for speculators going forward. In the intro, Peter Cooper discusses how companies are issuing debt at extreme levels and how that bodes ill considering how coronavirus is still a major tail risk. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	This episode is brought to you by Shopify.
0:03.0	That's what I hear when I make another sale on Shopify.
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0:12.0	Shopify is revolutionizing millions of businesses
0:16.1	worldwide so sign up for a one-pound per month trial period at shopify.co. UK slash Podcast 23 all lowercase and take your business to the next level today. It's Wednesday, June 17, 2020, just after market close in New York.
0:46.0	This is the Real Vision Daily Briefing.
0:49.0	I'm Ash Bennington, joined shortly by Tom Thornton, CEO and founder of Hedge Fund Telemetry.
0:56.0	But first, Peter Cooper with a look at markets.
0:59.0	Thanks, Ash.
1:00.0	Companies are substituting their 20-20 earnings
1:02.7	with their profits from last year
1:04.0	in order to remain in compliance with their loan covenants.
1:07.0	They're calling it EBITAC, or earnings
1:09.1	before interest, taxes, depreciation,
1:11.6	amortization, and coronavirus.
1:14.0	Live Nation Entertainment announced it will use its 2019 earnings figures
1:18.0	to calculate its net leverage covenant for the fourth quarter of 2020
1:21.4	until the second quarter of 2021.
1:23.6	These covenants are common in business loans and if broken can force immediate repayment
1:27.8	or in extreme cases trigger restructuring.
1:30.8	UK pub chain Punch Taverns asks its bondholders if they could use 2019's EBITDA to
1:36.2	factor into its leverage covenant until they can reopen their bars.
	...

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