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On March 15th, CNN Business reported that the Federal
Reserve has created a new rescue plan to prevent another SVB-like
collapse from occurring. The new plan, titled the Bank Term Lending
Program (BTLP), allows financial institutions to borrow cash from
the Federal Reserve for up to one year backed by bonds,
mortgage-backed securities, and other similar types of bonds. Under
the program, these bonds will be valued at par thereby allowing
banks to access greater amounts of liquidity than selling such
bonds in the open market would provide (given the interest rate
environment and the population of bonds tied to fixed interest
rates). The BTLP program will be backed by $25 billion from the US
Treasury, with the hope of instilling confidence in the US banking
system. Premarket stocks: The forgotten rescue plan that
could prevent another SVB-like collapse | CNN Business
On March 17th, Reuters reported that WeWork had
struck deals to cut its debt by roughly $1.5 billion and to extend
certain maturity dates. WeWork offers private workspaces to
companies and individuals, and has enjoyed some post-pandemic
success as people look to alternatives to traditional offices.
However, WeWork has struggled recently, cutting 300 jobs and
exiting 40 underperforming U.S. locations. Under the new deals,
over $1 billion of WeWork’s outstanding unsecured notes will be
converted to equity. This will result in about $1.9 billion of
pro-forma debt maturing in 2027. WeWork reaches deals to cut debt, extend
maturities | Reuters
On March 22nd, The Wall Street Journal reported that
Johnson & Johnson will seek the Supreme Court’s review
after the Third Circuit declined to reconsider its priori dismissal
of Johnson & Johnson subsidiary LTL Management’s chapter 11
case. J&J created LTL in 2021 as a strategy to address
increasing talc-injury lawsuits. If its chapter 11 case is not
revived, J&J faces the prospect of defending a significant
number of individual personal injury claims, which are based on
allegations that its talc products contain asbestos and caused
cancer. J&J has publicly denied that its talc products are
unsafe, and the company has spent roughly $4.5 billion in recent
years defending and settling similar claims related. J&J Fails to Win Rehearing of Talc Unit’s
Bankruptcy Case (wsj.com)
On March 23rd, Reuters reported that bankrupt
cryptocurrency exchange FTX would be selling its stake in startup
company Mysten Labs. Mysten Labs focuses on Web3, a decentralized
version of the internet that operates on blockchain technology. The
news comes as FTX’s new management attempts to sell assets to
pay off its liabilities. FTX paid nearly $101 million for preferred
shares of Mysten Labs last year, and it plans on selling its
current stake at $95 million. FTX to sell stake in Web3-focused Mysten Labs in
push to shore up funds | Reuters
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