Market Minds

The second most favorite German soap opera on Zero Hedge (just after the Volkswagen - Porsche melodrama) looks set for a second season. Bloomberg reporting that lenders who hold half of Conti’s humongous €11 billion debt load will do all they can to prevent the merger. It’s funny it took lenders only about a year to get their case of buyer’s remorse sufficiently well crystallized. Now if only Deutsche Bank could be sued in some fashion for half a billion dollars for breaching something or another, it would be a perfect case study of investment banking in the 21st century, where IBs make their clients richer by i) reneging on contractual financing or otherwise obligations and ii) paying exorbitant settlement amounts (while filing 8-K how the steep curve is a blessing and everyone will soon be a billionaire… if only those pesky consumers were to start borrowing again). From Bloomberg : The banks are concerned that the debt at a merged company would be too high, hurting chances Continental would be able to pay it all back, according to the people, who asked not to be identified because the discussions are private. The creditors are aiming to create enough backing to block changes to a loan agreement first reached in 2007, said the people. “Continental can do very little without the approval of its banks,” Bjoern Voss, an analyst with M.M. Warburg in Hamburg, Germany, said in a telephone interview. Continental Chief Executive Officer Karl-Thomas Neumann aims to submit a plan by Aug.

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Lenders Set To Scuttle Continental - Shaeffler Merger; Lawsuits Will Follow