Posts Tagged ‘Restructuring’

Lazard Operating Revenues Jump 67% Year over Year: Core Investment Banking Coming Back

Sunday, May 9th, 2010

Lazard, famed investment bank and legacy of Bruce Wasserstein recently reported earnings that blew investors away.  Operating revenues jumped 67% from one year earlier.  Lazard advises on mergers & acquisitions, restructurings, and to a lesser extent, capital raisings.  It operates from 40 cities across 25 countries throughout Europe, North America, Asia, Australia, and Central and South America, focusing on two business segments: Financial Advisory and Asset Management (explained below).

According to Bloomberg, “Lazard Ltd., the biggest non-bank merger adviser, rose in New York trading after posting adjusted earnings that beat analysts’ estimates on operating revenue that jumped 67 percent from a year earlier.

The loss for the first three months of 2010 was $33.5 million, or 38 cents a share, compared with a loss of $53.5 million, or 77 cents, in the same period a year earlier, the Hamilton, Bermuda-based company said today in a statement. Adjusted earnings were 46 cents a share, beating the 18-cent average estimate of 12 analysts in a Bloomberg survey.

Lazard’s revenue from advising on mergers and acquisitions climbed from a year earlier even as companies completed a lower value of deals in the quarter. Excluding special charges, the firm’s compensation ratio fell to 60 percent of revenue, compared with 75 percent in the first quarter of 2009.

“The report should give investors a booster shot of confidence on two important fronts,” Oppenheimer & Co. analyst Chris Kotowski said in a note to investors. “First, that the rebound in M&A activity is happening, albeit in fits and starts. Second, that the company is developing discipline around its compensation and other costs.”

Lazard rose 57 cents, or 1.5 percent, to $38.78 at 4 p.m. in New York Stock Exchange composite trading. The shares gained 28 percent last year after falling 27 percent in 2008.

Revenue Increase

Operating revenue rose 67 percent from a year earlier to a first-quarter record of $456.9 million. Operating revenue from financial-advisory services climbed to $269.1 million as fees from advising on both mergers and restructuring jumped more than 50 percent.

Revenue from merger and acquisition and strategic advisory climbed 53 percent from a year earlier to $147.6 million. That’s down 13 percent from the fourth quarter of 2009.

Asset management revenue climbed 78 percent from a year earlier to $183.7 million. Assets under management increased 4 percent to $135 billion from Dec. 31, with net inflows of $3 billion in the quarter.

“Both financial advisory and asset management had their best first quarters ever,” Chief Financial Officer Michael Castellano said in an interview. “We’re continuing to gain global market share in the M&A business.”

Compensation costs climbed 35 percent from a year earlier to $275.5 million. The firm also recorded a one-time $87.1 million expense tied to staff reductions.

‘Right Manpower Complement’

“Over the last two years, in addition to aggressively hiring senior bankers, we’ve also right-sized the firm in both asset management and the financial-advisory business, to make sure we have the right skill sets for the new world,” Castellano said. “I think we’ve now got the right manpower complement to be able to drive growth in both of the businesses.”

Kenneth Jacobs was named chief executive officer in November after the death of Bruce Wasserstein, the preeminent Wall Street dealmaker who took Lazard public in 2005. Jacobs, who has worked at the firm for 22 years, had served as deputy chairman and CEO of North American businesses since 2002, shortly after Wasserstein arrived.

Lazard said last month that Castellano will retire on March 31, 2011. He will be replaced by Matthieu Bucaille, who served as deputy chief executive officer of Lazard Freres Banque in Paris.

Financial Advice

Lazard has been using its restructuring-advisory business to counter weakness in mergers and acquisitions. It was the second-ranked adviser in 2009 bankruptcy liquidations, according to Bloomberg data, and advised debtors or creditors in the top 10 Chapter 11 bankruptcies in 2009.

Companies worldwide completed $358.9 billion of deals in the first quarter, down 25 percent from the same period in 2009 and 52 percent from the first quarter of 2008, data compiled by Bloomberg show.

Lazard was the seventh-ranked financial adviser on announced deals and 12th-ranked on completed takeovers in the first quarter. The firm advised on completed deals totaling more than $33.9 billion, including Kraft Foods Inc.’s acquisition of Cadbury PLC.

Lazard employees own more than a quarter of the firm, excluding the estate of Wasserstein. Because the stakes owned by employees can be converted into common stock, the company reports earnings as though the stakes were fully exchanged instead of treating them as minority interest.

Evercore Partners Inc., the investment bank founded by former U.S. Deputy Treasury Secretary Roger Altman, reported earnings last week that beat analysts’ estimates as advisory revenue climbed from a year ago.

Lazard Business Breakdown

Financial Advisory

The Company offers corporate, partnership, institutional, government and individual clients across the globe an array of financial advisory services regarding mergers and acquisitions (M&A), and other strategic matters, restructurings, capital structure, capital raising and various other corporate finance matters. During the year ended December 31, 2009, the Financial Advisory segment accounted for approximately 65% of its consolidated net revenue. It has operations in United States, United Kingdom, France, Argentina, Australia, Belgium, Brazil, Chile, Dubai, Germany, Hong Kong, India, Italy, Japan, the Netherlands, Panama, Peru, Singapore, South Korea, Spain, Sweden, Switzerland, Uruguay and mainland China.

The Company advises clients on a range of strategic and financial issues. When it advises companies in the potential acquisition of another company, business or certain assets, its services include evaluating potential acquisition targets, providing valuation analyses, evaluating and proposing financial and strategic alternatives and rendering, if appropriate, fairness opinions. It also may advise as to the timing, structure, financing and pricing of a proposed acquisition and assist in negotiating and closing the acquisition. In addition, the Company may assist in executing an acquisition by acting as a dealer-manager in transactions structured as a tender or exchange offer. When the Company advises clients that are contemplating the sale of certain businesses, assets or their entire company, its services include advising on the appropriate sales process for the situation, valuation issues, assisting in preparing an offering circular or other appropriate sales materials and rendering, if appropriate, fairness opinions. It also identifies and contacts selected qualified acquirors, and assists in negotiating and closing the proposed sale. It also advises its clients regarding financial and strategic alternatives to a sale, including recapitalizations, spin-offs, carve-outs, split-offs and tracking stocks.

For companies in financial distress, the Company’s services may include reviewing and analyzing the business, operations, properties, financial condition and prospects of the company, evaluating debt capacity, assisting in the determination of an appropriate capital structure and evaluating and recommending financial and strategic alternatives, including providing advice on dividend policy. It may also provide financial advice and assistance in developing and seeking approval of a restructuring or reorganization plan, which may include a plan of reorganization under Chapter 11 of the United States Bankruptcy Code or other similar court administered processes in non-United States jurisdictions.

When the Company assists clients in raising private or public market financing, its services include originating and executing private placements of equity, debt and related securities, assisting clients in connection with securing, refinancing or restructuring bank loans, originating public underwritings of equity, debt and convertible securities and originating and executing private placements of partnership and similar interests in alternative investment funds, such as leveraged buyout, mezzanine or real estate focused funds. In addition, it may advise on capital structure and assist in long-range capital planning and rating agency relationships.

Asset Management

The Company’s Asset Management business provides investment management and advisory services to institutional clients, financial intermediaries, private clients and investment vehicles around the world. As of December 31, 2009, total assets under management (AUM) were $129.5 billion, of which approximately 82% was invested in equities, 14% in fixed income, 3% in alternative investments and 1% in private equity funds. During 2009, approximately 36% of its AUM was invested in international investment strategies, 46% was invested in global investment strategies and 18% was invested in United States investment strategies. As of December 31, 2009, approximately 89% of its AUM was managed on behalf of institutional clients, including corporations, labor unions, public pension funds, insurance companies and banks, and through sub-advisory relationships, mutual fund sponsors, broker-dealers and registered advisors, and approximately 11% of its AUM, as of December 31, 2009, was managed on behalf of individual client relationships, which are principally with family offices and high-net worth individuals.

The Company competes with Bank of America, Citigroup, Credit Suisse, Deutsche Bank AG, Goldman Sachs & Co., JPMorgan Chase, Mediobanca, Morgan Stanley, Rothschild, UBS, The Blackstone Group, Evercore Partners, Moelis & Co., Greenhill & Co., Alliance Bernstein, AMVESCAP, Brandes Investment Partners, Capital Management & Research, Fidelity, Lord Abbett, Aberdeen and Schroders.

Dubai World Restructuring Underway

Monday, March 8th, 2010

Dubai shocked creditors when it decided to postpone interest and principal payments in November of 2009.  Since then, Moelis & Co. has been working with creditors to settle on repayment.  Some creditors still expect full repayment, while others would take a haircut for immediate cash. Certain assets have been “ring-fenced,” such as DP World’s port business, which may list in the UK.  By ring-fencing the asset, it will not be available for creditors.

Amran Abocar of Reuters writes: “Dubai World could put its plan to a creditor coordinating committee that includes HSBC and Standard Chartered in London this week but was being delayed by efforts to value the assets of its Nakheel unit, builder of Dubai’s palm-shaped islands, bankers said.

While some of the 97 creditors expect to see the option of full repayment on the table, others are willing to take a “haircut” in order to get some money back fast, bankers said.

“We are not willing to take a big haircut … in that case we would go back to the committee to see what our options are,” said one Gulf-based banker, who asked not to be named. “Full repayment should be an option, timing is less of an issue.”

Dubai World shocked global markets in November, when it requested a standstill on its debt repayments and said it would come up with a restructuring plan.

Dubai has said the plan would be “fair” but a plan could propose extending debt maturities and Dow Jones said creditors may get as little as 60 cents on the dollar.

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“There are those banks who want to have the money immediately and take a haircut and those who can wait for a longer time,” said one banker at an Asian lender which is among the creditors.

“If one of the lenders doesn’t accept both options, they can go for a legal case. It’s in the interest of the bankers and the company there is some agreement.”

Despite those divisions, hopes of progress in the talks cut the cost of insuring Dubai’s debt against default and boosted Nakheel’s 2011 bond on Monday.

Dubai’s five-year credit default swaps (CDS) fell about 20 basis points to 488.7, their lowest level since Jan 28. They had risen as high as 654 basis points on February 15 after a report that Dubai World was mulling a two-part deal, including one that may repay lenders 60 percent of the outstanding debt over a period of seven years.

Dubai’s stock market index rose over 1 percent on Monday on hopes of progress in the debt negotiations.

“Investors are front-running a possible uptrend that could follow a Dubai World announcement,” says Mohammed Yasin, Shuaa Securities chief executive.

“This should continue for a while. Volumes are low, but it’s not that there’s no money around, just that it is waiting for an outcome (on Dubai World) to provide some clarity.”

RING-FENCING ASSETS

Dubai World has ringfenced key assets from its restructuring plan including ports operator DP World, which has said it may seek a secondary listing on the London Stock Exchange.

A report on Sunday said DP World may offer new shares to shareholders and Dubai World could sell part of its 77 percent stake as it bids to become part of the FTSE 100 share index.

The move would help boost DP World’s liquidity and raise the stock’s free float shares to 35 percent.

Bankers said Dubai World’s debt restructuring plan would not include a proposal to raise capital or contain any surprises like Abu Dhabi’s last-minute bailout in December, which allowed Dubai to repay Nakheel’s maturing Islamic bond.

“It’s more of a local issue than a global issue now because the news is out, people know they want to restructure,” said a European fund manager, who used to hold Dubai World debt. “Given that they paid out on Nakheel in December, creditors will be looking for full payment on the other bonds.”

But a source familiar with the matter said last month that the Nakheel bond maturing in May was unlikely to be repaid.

But Dubai’s debt crisis is still causing ripples around the region. Moody’s downgraded seven Abu Dhabi government-related entities late last week, due to the absence of an explicit, formal guarantee of government backing.

Abu Dhabi, the wealthiest emirate in the seven-member United Arab Emirates federation and home to most its oil, dismissed the downgrade, saying it had the money to meet its commitments to the firms, especially three which are wholly state-owned.

Major creditors to Dubai World also include Bank of Tokyo-Mitsubishi, a unit of Mitsubishi UFJ Financial Group, Lloyds and Royal Bank of Scotland, Emirates NBD and Abu Dhabi Commercial Bank.”

Restructuring Document: Objection by General Growth’s Unsecured Creditors to Exclusivity

Monday, March 1st, 2010

General Growth recently turned down a $10 billion cash offer to be taken over by Simon Properties, a competitor.  The interesting aspect of this transaction was the General Growth was filing bankruptcy last year and has now refused to sell itself completely.  Instead it has planned to split itself in two and take a minority investment from Brookfield Asset Management.  The creditor committee here is objecting to another 6 months of exclusivity for the debtors.

Objection by General Growth’s Unsecured Creditors to Exclusivity

General Growth Properties Splitting in Two

Wednesday, February 24th, 2010

Many currently think that the offers General Growth Properties has received are very steep, especially since the country’s largest mall owner went through a debt restructuring last year….As a result, the company is splitting itself in two and will raise capital to ease its transition as the economy recovers.

You can refer to our first General Growth Article HERE…

According to Bloomberg, “General Growth Properties Inc. plans to split in two to exit bankrupty and will receive $2.63 billion in capital from Brookfield Asset Management Inc., according to a person with knowledge of the company’s plans.

The plan would value the shopping-mall owner at a minimum of $15 a share, said the person, who asked not to be named because the negotiations are private.

Simon Property Group Inc., the largest U.S. mall owner, offered to buy General Growth for more than $10 billion in a bid that would give equity investors about $9 a share.”

~I.S.

GM Delays European Restructuring

Wednesday, December 23rd, 2009

opel_logo

GM’s European restructuring plan with Opel and Vauxhall will now be delayed until 1Q 2010.  Nick Reilly, CEO of GM Europe, released the news last week.  He admitted that “While it is indeed exciting to see that things are coming together, bear in mind this is going to be one of the largest, most complex industrial reorganizations in European manufacturing in years.”  Thousands of European employee pay packages will be affected by the restructuring.  Last month, GM canceled the sale of a majority in Opel and Vauxhall to a consortium of Russian lender Sberbank and Canadian auto parts manufacturers Magna International, Inc.

GM has indicated it wants some 2.7 billion euros (3.9 billion dollars) in state aid from the various EU countries where it has factories in order to turn the carmaker around. Opel employs around 50,000 people in Europe, half of whom are in Germany.

For more information, refer to GM’s website…

General Growth Restructuring Part 1

Sunday, December 6th, 2009

general_growth_propertiesThe 2nd largest mall owner in the U.S., General Growth, just won approval for a reorganization plan to restructure $8.9 billion in mortgage liabilities.   General Growth owns over 200 shopping malls in 44 states.  The firm also owns various office buildings across the country.   After much deliberation, the firm reached a deal with Prudential Life Insurance earlier to restructure as much as 70% of its outstanding loans.

By April of 2009, the company had issued $27 billion in debt due to a series of acquisitions.  The group’s property holding include everything from Boston’s Faneuil Hall and New York’s South Street Seaport to the Grand Canal Shoppes at the Venetian and the luxury Ala Moana Center in Hawaii.   The case # for this restructuring is 09-11977 and it is being overseen by Bankruptcy Judge Allan Gropper, U.S. Bankruptcy Court,  Southern District of New York.

In April of 2009, General growth filed the biggest real estate bankruptcy in American history.  The Ch. 11 bankruptcy was triggered after General Growth paid $11.3 billion to by commercial property developer Rouse & Co. in 2004 and the division began to crumble in 2007. Eurohypo, a division of Commerzbank, was the largest unsecured creditor to the firm, with $2.59 billion.  Eurohypos is thus an administrative agent for the other 175 creditors.  The restructuring may  force the company to sell assets that competitors like Simon’s could buy.

~IS


Houlihan Lokey Starts Capital Markets Franchise

Monday, November 30th, 2009

hl__7532

Former Drexel deal maker Jess Ravich has started a capital markets franchise for restructuring powerhouse, Houlihan Lokey.  Ravich, who graduated from Wharton and Harvard Law School was part of the DBL executive committee and ran high yield trading from 1988 to 1990.  He sat next to junk-bond legend Michael Milken.

Ravich will build the debt capital markets group at HL and will focus on private placements of both equity and debt, as well as new issuances of high yield securities, bank debt and investment grade debt.  As head, Ravich is also working on building syndication relationships.

~IS

For more information, please visit HL’s website…

For more information, please refer to the NOv. 13th edition of IDD…

Prepackaged Bankruptcies – Part 1

Friday, November 13th, 2009

Charter Logo

In 1983, when Charter Company filed bankruptcy, the $1.8 billion conglomerate with more than 180 subsidiaries shocked the nation.  By hiding pending debt maturities in unconsolidated subsidiaries, Charter was able to fool investors until it was too late. Twenty-six years later, the Charter bankruptcy has been dwarfed by the bankruptcies and restructurings of financial conglomerates such as AIG, Lehman Brothers, and CIT.  CIT, with over $60 billion in financial assets was the latest victim of the financial crisis.  If the firm hadn’t waited until November to file, thousands of merchants would have not been able to finance their inventories before the 2009 holiday season.  CIT is the fifth largest company by assets to enter bankruptcy.  After agreeing to a prepacked bankruptcy process, investors will receive 70 cents on the dollar in the form of new senior debt and equity in the reorganized firm.  If the company has been allowed to fail like other financial institutions, unsecured claims would have received less than 10 cents on the dollar.

Fred Hodara of Akin Gump Strauss Hauer and Feld LLP recently interviewed with Bloomberg to comment on how prepacked bankruptcies pay off because working with management helps shape better solutions for creditor committees.

According to Moody’s Investor Services, the out of court restructuring recovery rate in bankruptcy for senior lenders may be as little as 35 cents on the dollar.  Corporate defaults have climbed to 239 this year, and the number is estimated to increase well into 2010.  The 12-month forecast for High Yield defaults is about 6.9%.   Usually, as default rates increase, recovery rates fall.  Prepacked bankruptcy negotiations with company management teams have been saving investors about 5% of their capital versus standard filings.   These cooperative negotiations are up more than 26x over the past two years, according to Moody’s.   A study by ratings agencies of prepacked bankruptcies from 1989 to 2009 shows a 54.6% recovery rate, versus a 49.6% recovery rate for standard bankruptcy procedures.

In prepacked bankruptcies, management teams work with lenders to set up plans before a company has the chance to file for Chapter 11.  The first prepackaged bankruptcy was probably that of Dallas based Republic Health Corp.  This form of negotiation became more popular in the 90s as a way to quickly recover on failed leveraged buyouts.

The major advantage of “prepacks” is that they save substantial time and disruption, versus a regular Ch. 11 bankruptcy filing.   In a prepacked bankruptcy, votes for a reorganization plan have already been solicited and agreed upon before Ch. 11, speeding up the process.  The average Ch. 11 case is rarely completed within a year and it can take up for three for a company to emerge from it.  The longer a case usually takes, the more the intrinsic value of a company deteriorates.

More updates on the prepacked bankruptcy process will follow…

Please see Bloomberg for full news update…

Please see Ohio Business Law for more information about bankruptcy…

What is Proprietary Trading & Who are the Major Players?

Tuesday, November 10th, 2009

Jane Street Logo


What is proprietary trading?

Proprietary trading firms are usually limited partnerships that put  their own capital to work in the markets, rather than the capital of their clients.  Some of these firms also function as market makers, or liquidity providers to the capital markets.  Prop trading firms are different than hedge funds, which generate returns based on their fund size and benchmark performance.  In terms of compensation, prop trading firms often pay a base salary and a very lucrative performance bonus.  Turnover, however, is rather high at these firms, since these firms do not often tolerate shoddy performance.  In addition, newer firms often require a contribution of capital from traders who wish to join, from about $10-20,000.  In return, these firms often offer substantial leverage and training.  Many times, the training is well worth the experience if it is given for free.  Aspiring traders though need to be wary of firms that charge excessively for training.

For those interested in prop trading, here are the best:

  • Advantage Futures – Advantage is a clearing member of the Chicago Mercantile Exchange, the Chicago Board of Trade, The London Clearing House, The Clearing Corporation as well as a non-clearing member of Eurex and Eurex-US.
  • Allston Trading – Allston Trading, LLC, is a premier market maker in worldwide financial exchanges. We trade hundreds of different stocks, bonds, futures, options and other financial instruments in over 30 exchanges.
  • Archelon Group – Archelon LLC is an options market maker and proprietary trader of exchange listed options, futures and equities in the US, Europe, and Korea.
  • Assent – Assent is a national equities trading firm that currently serves hundreds of traders across the country.
  • Avatar Trading – Trading services for individual traders and large trading groups.
  • BOSS Trading – A Chicago-based proprietary trading group with a strong background in intermarket relationships and spreads, from both a fundamental and technical standpoint. Primarily focusing on European market hours, BOSS Trading has over 7 years experience in trading electronic debt, equity, and commodity futures.
  • Bear Capital Partners – Established in 2004 by a young team of industrious trading professionals, Bear Capital Partners has quickly evolved within the financial world; developing recognition as an incomparable, resilient force among Wall Street’s most elite organizations.
  • Belvedere Trading – Belvedere Trading is a proprietary trading firm specializing in equity index options.
  • Blue Capital Group – Blue Capital Group is a privately held futures and options trading firm based in Deerfield, Illinois.
  • Breakwater Trading – Breakwater is an agile, focused, proactive organization that strives to integrate technology with intelligence and market vision.
  • Bright Trading – Bright Trading, LLC is a professional, proprietary stock trading firm. We have hundreds of independent traders who trade from dozens of locations throughout the United States. In addition, our “Bright-At-Home” traders enjoy the benefits of proprietary trading from the comfort of their homes.
  • Broad Street Trading – Broad Street Trading is a private equity trading firm formed to manage and trade it’s own funds.
  • Capstone – Trades, equities, commodities, fixed income and money markets around the world. Offices in London, New York and Chicago.
  • Chicago Trading Company – Chicago Trading Company (CTC) is a proprietary market making firm and is recognized internationally as a leading provider of pricing and liquidity on all U.S. derivatives exchanges.
  • DRW Trading Group – The DRW Trading Group is an aggressive, dedicated organization engaged in many different aspects of the trading industry, including market making and proprietary trading. Offices in Chicago, New York and London.
  • DV Trading – DV Trading is a proprietary trading firm that executes on all major North American and European futures exchanges in a variety of asset classes.
  • Dimension Brokerage – Dimension Brokerage, LLC is a full service trading firm specializing in providing trading services to professional traders.
  • EchoTrade – ECHOtrade is a professional trading firm dedicated to the needs of the serious, off-floor trader.
  • Eldorado Trading – Eldorado Trading, LLC, is a proprietary trading firm that capitalizes on global fixed income markets— CME Eurodollars, CBOT Treasuries, LIFFE Euribor—by being the leading innovator of the electronic trading world. The founders of Eldorado have been trading electronically since the inception of screen trading in the early 1990s, giving the company an edge as transactions migrate from open outcry in the trading pits to electronic trading on the screens.
  • First New York Securities – Premier principal trading firm with over 200 employees in NY and London.  Phenomenal training program (18-24 months).  Looks for highly motivated applicants.
  • Fusionary Trading – Fusionary uses a synthesis of the wisdom of the ages and time-tested tools to help you make more money in less time.
  • Futex Trading – Futex was set up by traders who had been open-outcry trading on the LIFFE floor since 1990. In 1998 when the LIFFE floor was migrating onto computer screens Futex traders were one of the first to establish a professional computer based trading floor.
  • GETCO – GETCO is a privately-held, electronic trading firm dedicated to enhancing liquidity and efficiency in the world’s financial markets.
  • Gelber Group – Gelber is a unique service provider for the individual professional trader, professional trading group, or institution. We have an unwavering focus on technology management and service, as we seek to expand our access to liquid electronic markets around the world. Gelber Group maintains the philosophy that clear communication and interaction bring successful trading results.
  • Genesis Securities – Genesis provides a fully customizable, state of the art DMA platform Laser for the sophisticated trader.
  • Geneva Trading – Geneva Trading is a proprietary electronic trading firm located in Chicago, Illinois USA and Dublin, Ireland. Focus is on electronically traded futures and equity markets in the USA and Europe.
  • Goldenberg, Hehmeyer & Co. (GHCO) – Futures, Options, Trading, Hedging. Professional Trading and Brokerage at the next level.
  • Group One Trading – Group One is one of the largest proprietary options trading firms in the country started in 1989 by five successful options traders.
  • Hold Brothers – Proprietary Online Stock Trading.
  • IMC Financial Markets – The IMC Group is a global financial organization with a presence in Amsterdam, London, New York, Chicago, Hong Kong, Sydney, and Zug.
  • Infinium Capital Management – Infinium Capital Management is a proprietary capital management firm with offices in Chicago and New York. Founded in Chicago in 2001, our firm was built by a core team with decades of experience in trading, software development, and financial modeling. The founders share entrepreneurial pasts, having built and sold a variety of companies and technologies both in and out of the financial markets.
  • Intelligent Market Trading Company – The Intelligent Market Trading Company is a Chicago-based proprietary trading company with the core focus of applying cutting edge technology, and trading techniques to the problem of floor traded and electronically traded derivative securities.
  • International Trading Group / DE Trading Corporation – Privately held proprietary trading firm in the northern suburbs of Chicago.
  • Jane Street Capital – Jane Street is a quantitative proprietary trading firm that brings a deep understanding of markets, a scientific approach, and innovative technology together to trade profitably in financial markets. Jane Street doesn’t seek outside investment and doesn’t have customers. Founded in 2000, Jane Street is 190 committed people in New York, Chicago, London, and Tokyo.
  • Jump Trading – Jump Trading, LLC is a proprietary trading firm, focused on trading index futures, options, and equities. Because we are not a brokerage firm, we do not have clients. Revenues come solely from trading Jump’s proprietary account.Jump Trading is a member of the Chicago Mercantile Exchange (CME), the Chicago Board of Trade (CBOT), the Chicago Board Options Exchange (CBOE), and the American Stock Exchange (AMEX). Jump is also a non-clearing member of the European Exchange (Eurex).
  • Kershner Trading Group – Since 1993, Kershner Trading has been built on the idea of shared success. We are a classic proprietary trading business providing full service, support and capital to our traders, including state-of-the-art proprietary technology applications with direct access to US markets. Our traders currently trade in our Austin, Tx office, however we are always interested in hearing from groups of successful traders in other locations. Member NASD, SEC registered.
  • Kingstree Trading – Chicago prop trading firm that at one time reputedly did one third of the volume in the e-mini S&P.
  • Lion Pride Trading – Lion Pride Trading is a global private equities, options and futures trading firm that empowers its traders with significant trading equity, lightning-fast execution software, and unparalleled access to international markets and exchanges and also provides timely worldwide news and information.
  • Liquid Trading – Specializes in high frequency, quant traders.  Based in Europe.
  • Marex Trading – MAREX Financial is an Independent Broker Dealer offering worldwide coverage of Commodities, Financial Futures and Options and FX Markets.
  • Marquette Partners – Marquette Partners is a leading liquidity provider to the world’s largest derivatives exchanges. As an early pioneer in electronic futures trading, Marquette has successfully developed individuals to trade on exchanges throughout the globe, including the Chicago Mercantile Exchange, the Chicago Board of Trade, Eurex, Euronext-Paris, Euronext-LIFFE and Borsa Italia.
  • Nico Trading – Nico Holdings LLC is a proprietary trading firm. We make markets and take positions 24 hours a day. We are active in exchange-traded and over-the-counter markets, including spot and derivative contracts.
  • Optiver – Optiver is an international proprietary trading house dealing mainly in derivatives, shares and bonds. The firm has expanded from a few Amsterdam based market makers to a global arbitrage group with subsidiaries in Chicago and Sydney.
  • Peak6 Trading – One of the largest equity options market-making firms in the U.S.
  • Refco Trading Services – Based on REFCO’s acquisition of MAC Trading Services, LLC a London based electronic trading company; REFCO Trading Services was established, which has commenced operations in North America. Now part of the Man Financial Refco Division.
  • Reverb Capital – Reverb Capital is making itself heard from the epicenter of Chicago’s Financial District. Focused on “high frequency” trading in the equities, futures and options markets, Reverb is a proprietary trading firm that beats to a different drum.
  • Ronin Capital – Proprietary trading operations covering a variety of markets including equity securities, government bonds, corporate bonds, and related derivatives on global exchanges and electronically.
  • SKTY Trading – SKTY Trading was founded in 2002 as a market making firm in EuroDollar options on the Chicago Mercantile Exchange. Since inception, SKTY has expanded its focus to include multiple products on several exchanges.
  • SMB Capital – SMB Capital, LLC is a privately owned investment partnership engaged in day trading NYSE and NASDAQ equities.
  • Schonfeld Group – Schonfeld Securities, LLC pioneered the short term trading industry when it began operations in 1988. It is one of the largest U.S. proprietary equity trading firms in terms of number of traders and volume traded on the NYSE and NASDAQ.
  • Simplex Investments – Chicago based off-floor proprietary trading firm focused on the active trader.
  • Spot Trading – Spot Trading is an off-floor trading firm specializing in equity options.
  • Susquehanna International Group – Based in Philadelphia and focused on market making, proprietary trading, private equity.  Looks for entrepreneurial traders with experience.
  • Swifttrade – Global Securities Trading.
  • The Archelon Group – Archelon LLC is an options market maker and proprietary trader of exchange listed options, futures and equities in the US, Europe, and Korea.
  • Tibra Capital – A global prop firm specialising in market making and arbitrage.
  • Title Trading – Title Trading is privately owned proprietary trading firm. Title traders trade the firm’s capital on several US stock markets: NYSE, NASDAQ and AMEX.
  • Tower Hill Trading – Tower Hill Trading is a leading proprietary trading firm based in downtown Chicago. We offer a superior working environment, the opportunity to learn from the best, state of the art technology, extremely competitive payouts and access to substantial trading capital.
  • Trade Vision Capital – Trade Vision Capital provides its customers with the highest end order entry software available. It is the only software to receive the NASD’s platinum certification.
  • Tradebot Systems – Tradebot Systems provides liquidity to the stock market.
  • Transmarket Group – TransMarket Group LLC is a global private trading and investment company. Provide risk capital and market access to individuals for the purpose of trading the global financial markets. Employees trade all global exchange listed derivatives, equities, commodities and selected cash markets.
  • Vankar Trading – Professional management of trading systems. Divisions in North America, Europe, and Australia.
  • WH Trading – WH Trading LLC is a proprietary futures, options and equities trading firm headquartered in Chicago, IL. Founded in 1994, WH Trading currently serves as a primary liquidity provider on the floor of the major Chicago futures exchanges and also as an exchange designated Lead Market Maker for electronically traded products in a variety of asset classes.
  • Wasserman Capital – At Wasserman Capital our passion is trading and training others how to trade. Wasserman Capital has a proven apprenticeship program that leverages the same historically proven methods that successful traders have been using for over 100 years. Our training program provides the trading expertise and hands-on coaching necessary to help turn your passion for the financial markets into your career.
  • Wolverine Trading – Wolverine is headquartered in Chicago and has offices in New York, San Francisco, Philadelphia and London.
  • World Trade Securities – WTS Proprietary Trading Group LLC, is a privately owned proprietary trading firm based in NYC, New York and a member of the CBSX and is SEC registered.
  • Xerxes Trading – Xerxes Trading represents the Morristown, NJ Office of Hold Brothers Online Investment Services, LLC (member FINRA-SIPC).
  • Zmarc Partners – Specializes in electronic futures and commodity trading with all major international trading exchanges.
  • RANKINGS: Jane Street, DRW, SIG, Optiver, Spot, Transmarket, Wolverine, Peak6, Jump Trading, First New York.
Here is a comprehensive list of firms in the U.S.:

Advantage Futures
Alaron Trading
Allston Trading
Angle Group
Archelon Group
Assent
Avatar Securities

Barkley Trading
Bear Capital
Belvedere Trading
Benchmarq Trading
Blue Capital Group
Boss Trading
Boston Cabot

Breakwater Trading
Bright Trading
Buttonwood Group Trading

Cago Trading
Caliber Financial Management
Carlin Group
Capstone
Cheiron Trading
Chicago Trading
Chimera Capital
Coastal Trade Securities
Consolidated Trading
Cornerstone Trading Group
Curvalue Financial Services Group
Cy Group

Darwin Capital Trading
Dayson Capital
Davis Securities
Dimension Trading Group
Dimension Capital Partners
DRW Trading Group
DV Trading

E-Brokerage
Echo Trade
Eldorado Trading Group
Epiphany Trading
Equitrade Financial
Equity Trading Capital
Evolution Capital
Excel Trading

First North American Trading
First New York Securities
FCT Group of Companies
Flat Iron Trading
Fusionary Trading
Futex Group

Gator Trading Partners
Getco, LLC

Gelber Group
Gemini Capital
Genesis Securities
Geneva Trading
Golden Beneficial
Goldenberg, Hehmeyer & Co. (GHCO)
Golden Market
Group One Trading
Guardian Trading

Harrison Trading Group
Hanley Group
Harrison Trading Group
HLV Capital
Hold Brothers

Infinium Capital Management
Integra Capital
International Trading Group/ DE Trading Corp
IMC Financial Markets

Jane Street Capital
JC Trading Group
Jump Trading

KC-CO II
Kershner Trading
Keystone Trading
Kingstree Trading

Last Atlantis Capital
League Trading

Lion Pride Trading
Liquid Trading

Lynx Capital

Madison Proprietary Trading Group
Mako Global
MBH Trading
MJL Partners
M&N Trading
MAREX Trading
Marquette Partners
Mazel Trading

Motive Capital

Nexis Capital
Nico Trading
Next Level Trading

Optiver
Opus Atlanta

Paramount Equity Partners
Peak6
Platinum Plus Trading
Prestige Capital
Prism Trading Group

Questrade

Refco Trading Services
Remata Trading
Remote Day Trader
Rho Trading Securities
RML Trading
Riverbank Capital
Ronin Capital
Rosenthal Collins Group

S&B Capital
Saxon Financials
Schonfeld
SDV LLC
Semper Fi Trading
Sharmac Capital
Simplex Investments
SMB Capital
SMW Trading Company
Soldier Capital
Sperling Enterprises
Spot Trading
Star Alliance Capital One
Swift Trade

T3 Capital
Tibra Capital
Titan Securities
Title Trading
Tower Hill Trading
Trade Vision Group
Traders Capital
Trading RM
Transact Futures
Transmarket Group
Triton Trading
Trillium Trading
Trinity Capital
Tuco Trading

Yourika Capital
Xerxes Trading

Van der Moolen
Vankar Trading
VTrader Group
Velez Capital

Wasserman Capital
Wescott Group
Wolverine Trading
World Trade Securities

Zinc Trading
Z-Marc II

Here is a comprehensive list of firms in Europe:

Argo Traders
Candlestick Trading Company
CFT Financials
Custom House Capital

Dubai Professional Trading Group
Elite Derivatives
Enigma Trading Services

Futex Group

Global Exchange Trading
GHF Financials
Heron Futures
Kyte Group
League Traders
London Capital Group

Mercury Financial
MET Traders
MTA Trade
Nevis Trading

OSTC
Propex Derivatives

Pyne Trading

Saxon Financials
Schneider Group
Seuqoia Capital
Sigma Derivatives

TCA Markets
TradeLink
Trader Hill
Traders Clearing Alliance
Trading Places

Triniti Financial
Turtle Futures
TXL Trading

THE RISK OF LOSS IN ELECTRONIC DAY TRADING CAN BE SUBSTANTIAL. WE THEREFORE STRONGLY RECOMMEND THAT YOU CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND YOUR FINANCIAL RESOURCES.

For more information, please see TradersNarrative…
Also check out TradersLog…

MGM to Issue $1 Billion of Additional Debt

Sunday, November 8th, 2009

MGM Mirage

MGM Mirage currently has about $5.8 billion in bank facilities coming due in 2011.  It also posted a 3rd quarter loss last week on a $1.7 billion dollar write-down.  As a result, the company may issue $1 billion of additional debt after obtaining an amendment to its credit agreement.  MGM Mirage hinted that it would issue unsecured debt and that half of the issuance would be used to repay existing debt.

Bank of America Merrill Lynch recently issued $1.5 billion in bonds for MGM in the form of senior secured notes.  The deal was done in two tranches due in 2014 and 2017.

According to Bloomberg, MGM informed creditors in September that it would skip a $12 million coupon payment.  Moelis and Company was advising the firm as the time on a $3.7 billion debt for equity swap.

Please see Leveraged Finance News for full news update…