Debt to asset calculator

On January 29, 2014, the Internal Revenue Service and Treasury Department issued a notice of proposed rule-making, which has created substantial controversy, particularly in the real estate industry and professionals representing participants in it.  The proposed regulations interpreting Section 752 of the Code, if adopted in the form proposed, would drastically change the way that partnership-level debt, both recourse and nonrecourse, is allocated among partners under existing regulatory provisions, creating both significant problems and possible opportunities.  This Alert is a general description of how the regulations affect partners and partnerships (and other entities taxed as partnerships); a related GT Alert more specifically discusses the possible impact of the proposed regulations on the REIT industry. Background. The way in which partnership level debt is allocated among partners has very important implications for partners (including members of … [Read more...] about New Proposed 752 Regulations to Alter Partnership-Level Debt Allocations

The Federal Trade Commission's Premerger Notification Office has expanded the Hart-Scott-Rodino (HSR) reporting requirements for certain leveraged buyouts. M&A practitioners generally are familiar with the HSR premerger notification regime. Most are also familiar with the fact that determining whether a transaction is or is not subject to reporting is not always straightforward. The HSR reporting rules require that before certain transactions can close, typically M&A deals but other types of transactions can be captured as well, the antitrust enforcement agencies – FTC and DOJ – must be notified and a 30 day waiting period must be observed. In transactions likely to result in competitive harm, the agencies can investigate, which can further delay closing. In the most extreme cases the agencies can impose restrictions, order divestitures, or block a transaction from closing altogether. Therefore, any expansion in reporting requirements merits close attention.The … [Read more...] about FTC Reverses Prior Position – Buyers Must Now Count All New Debt as Part of the Transaction Size for HSR Purposes

In the wake of the American Bankers Association’s lawsuit challenging the Volcker Rule’s treatment of collateralized debt obligations (CDOs) backed by trust preferred securities (TruPS), the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission (the Agencies) have issued a statement which appears to signal that they are considering walking the rule back. The question is to what extent the Agencies will reverse themselves. The December 27 statement states in pertinent part as follows: [The Agencies] are currently reviewing this matter and are considering whether it is appropriate and consistent with the provisions of the Dodd-Frank Act not to subject pooled investment vehicles for TruPS, such as collateralized debt obligations (CDOs) backed by TruPS (TruPS CDOs), to the prohibitions on ownership of covered funds in section 619 of … [Read more...] about Agencies Appear to Signal Retreat on Collateralized Debt Obligations (CDOs) backed by Trust Preferred Securities (TruPS) Issue

In a measured opinion hewing closely to standard principles of contract interpretation, the United States Court of Appeals for the Second Circuit in NML Capital, Ltd. v. Republic of Argentina, No. 12-105, slip op. (2d Cir. Oct. 26, 2012), rejected the notion that a sovereign may issue bonds governed by New York state law and subject to the jurisdiction of the state’s courts, and then restructure those bonds in a manner that violates New York state law.The Second Circuit held in NML Capital that Argentina violated an equal treatment provision (part of a pari passu clause) requiring Argentina to rank bonds “at least equally” with other forms of External Indebtedness through “the combination of Argentina’s executive declarations and legislative enactments.” The court held that bonds issued in Argentina’s 2005 and 2010 restructuring (the “Exchange Bonds”) qualify as External Indebtedness, and to remedy the violation, the court … [Read more...] about Second Circuit Adheres Strictly to the Rules of Contract in Sovereign Debt Restructurings

The Securities and Exchange Commission (SEC) recently provided some expanded valuation guidance to mutual funds in its release on Money Market Fund Reform dated July 23, 2014.  The guidance is applicable to any fund, including but not limited to money market funds, that holds short-term debt securities or debt securities that are thinly traded.Valuation of Short-Term Debt SecuritiesOne aspect of the guidance concerned amortized cost valuation.  The SEC reminded the fund industry that all registered investment companies and business development companies may continue to use amortized cost to value debt securities with remaining maturities of 60 days or less (Short-Term Debt Securities) only if the fund directors determine in good faith that the fair value of the securities is their amortized cost value.  Many non-money market and most money market funds currently disclose that they use amortized cost to value Short-Term Debt Securities.  A Short-Term Debt … [Read more...] about SEC Issues Valuation Guidance for Funds Holding Certain Short-Term Debt Securities