Direct lenders – Direct Vanqex http://directvanqex.com/ Fri, 14 Jan 2022 23:46:52 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://directvanqex.com/wp-content/uploads/2021/05/cropped-icon-32x32.png Direct lenders – Direct Vanqex http://directvanqex.com/ 32 32 Mortgage rates have hit a new high since the onset of Covid – What this means for borrowers – Forbes Advisor https://directvanqex.com/mortgage-rates-have-hit-a-new-high-since-the-onset-of-covid-what-this-means-for-borrowers-forbes-advisor/ Fri, 14 Jan 2022 19:38:16 +0000 https://directvanqex.com/mortgage-rates-have-hit-a-new-high-since-the-onset-of-covid-what-this-means-for-borrowers-forbes-advisor/

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Mortgage rates are on fire in 2022, up 30 basis points to 3.45% in the first two weeks of January alone – and the highest since March 2020. While rates are still low relative to levels pre-Covid, ever-higher inflation and the Federal Reserve’s attempts to calm it will surely push rates even higher.

Inflation hit the headlines when the consumer price index (CPI) topped 7% for the 12 months ending December – the highest rate since 1982 – driving up the prices of everything from what we eat where we live. To curb rising prices, the Federal Open Market Committee (FOMC) announced that it would withdraw more quickly from its special measures to support the economy, including the acceleration of plans to reduce bond purchases, and also hinted that he might raise the fed funds rate. several times in 2022.

The Fed’s big reveal hammered bonds and the mortgage market. The 10-year Treasury yield – a key benchmark for mortgage rates – rose from 1.52% on December 31 to 1.70% on January 13. The move helped push 30-year mortgage rates from 3.11% to 3.45% over the same period.

As mortgage rates rise, house prices also rise. For homebuyers, they can dictate how much home you can afford. For current homeowners, they decide if it’s still worth refinancing your mortgage.

Higher mortgage rates will make housing more expensive

According to the latest CoreLogic home price index, home prices climbed 18.1% year-over-year in November 2021. The fact that mortgage rates have remained relatively low has been a key financial benefit for buyers in an otherwise exorbitant market. But if house prices continue to rise and rates reach or exceed the 4% range, it could dampen demand, said Jodi Hall, president of mortgage company Nationwide Mortgage Bankers.

“Depending on how big the interest rate rises, we’ll always see demand,” Hall said. “But if inflation pushes up house prices and interest rates, that will put people on the bench.”

Many first-time home buyers may not know what is required to qualify for a mortgage and what they need to get the lowest interest rates available. There are federal and state programs that offer counseling, and experienced lenders can help borrowers through this process.

For borrowers on a tight budget, down payment assistance options are available nationwide. A typical eligibility requirement for most grants and down payment loans is that the applicant be a first-time homebuyer (someone who has not owned a home for three or more years ).

Additionally, for borrowers who may have a limited credit history (credit card or loan payments less than necessary), some lenders will review alternative credit data, such as rental payment history, services public and mobile phone, as well as bank account information, to establish creditworthiness.

Refinancing fades as rates rise

As mortgage rates rise, the number of people who can save money by refinancing decreases, a scenario that is already unfolding.

According to Black Knight, a data analytics firm, 7.1 million people would be eligible for refinancing with mortgage rates at 3.59%. This represents approximately 11 million fewer borrowers based on end-December rates.

Black Knight defines borrowers eligible for refinancing as having a minimum of 720 credit scores, 20% home equity, and the ability to reduce their interest rate by at least 0.75% by refinancing a fixed mortgage of 30 years.

“If the inflation numbers we’re seeing now are real and continue to rise, which most agree, we can expect rates to rise, which will lead to a very different mortgage market in 2022,” says Brandon Snow, Executive Director, Direct to Consumer Origins at Ally. “We could see refinance volume decline by up to 50% from 2021 to 2022, as higher rates will result in fewer homeowners looking to refinance until those rates drop again.”

Martin Choy, chief operating officer at Westwood Mortgage, a Seattle-based mortgage lender, said the law is “virtually refinancing dry as mortgage rates continue to climb.”

Borrowers, however, are still eager to leverage equity, Choy says. But if they have a rate below 3%, they won’t be able to get it now if they refinance in cash, which could mean paying more for the mortgage.

A home equity loan or home equity line of credit (HELOC) are two options to consider for borrowers who want to access their equity without touching their existing mortgage rate.

  • A home equity loan is a second mortgage that does not affect your first mortgage. It usually has a fixed rate that can be repaid over 1 to 30 years.
  • A home equity line of credit (HELOC) works like a credit card in that you have a fixed amount of credit. Borrowers can use as much or as little credit during the drawing period, usually 10 years. After the end of the drawdown period, borrowers will pay both interest and the principal balance. HELOCs usually have adjustable rates.

Snow says now is the time for borrowers who can save money by refinancing their mortgage.

“All things considered, if refinancing a mortgage is something a homeowner is eager to do, they should act now while rates are still relatively low,” Snow says. “Lock in a favorable rate before any changes that could impact the mortgage market take place.”

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RIL-ACRE and Welspun are the first to buy out bankrupt Sintex Industries https://directvanqex.com/ril-acre-and-welspun-are-the-first-to-buy-out-bankrupt-sintex-industries/ Tue, 11 Jan 2022 04:07:37 +0000 https://directvanqex.com/ril-acre-and-welspun-are-the-first-to-buy-out-bankrupt-sintex-industries/

RIL-ACRE and Welspun are the first to acquire bankrupt Sintex Industries. | Photo credit: BCCL

New Delhi: Reliance Industries Ltd (RIL) controlled by billionaire Mukesh Ambani and Welspun SA would have become the main contenders for the acquisition of bankrupt Sintex Industries. It should be mentioned here that this is the second bankrupt textile manufacturer that the oil and telecom conglomerate is trying to acquire. In 2019, it acquired Alok Industries in partnership with JM Financial Asset Reconstruction Company.

RIL and Ares SSG Capital-backed Assets Care and Reconstruction Enterprises (ACRE) made an offer for Sintex as part of the bankruptcy resolution process, and proposed a resolution plan of Rs 2,863 crore comprising 10% equity to lenders, to persons directly acquainted with the matter said HEY.

RIL-ACRE and the Welspun Easygo Textile Pvt Ltd group unit are the two highest bidder among the four corporate offers that the lenders have received for the textile and yarn manufacturing company.

The financial daily quoted one of the people as saying, “There is a marginal difference between the offers made by the Reliance Industries-ACRE team and the Welspun group. The two are the highest but conditional. It is difficult to assess which of the two plans is better.

Previously, reports indicated that Sintex, which is the subject of a corporate insolvency and resolution process, had secured 16 expressions of interest (EoIs), including offers from foreign fund CarVal Investors and the company Aditya Birla Asset Reconstruction, backed by Varde Capital.

Resolution Professional Pinakin Shah has asked the two highest bidders to resubmit the revised unconditional resolution plans.

The RIL offer includes the payment of Rs 2,280 crore to financial creditors, an equity injection of Rs 500 crore for working capital requirements and the payment of Rs 83 crore to employees and trade creditors, a indicated the publication citing sources.

After the acquisition, RIL will own 79%, ACRE 11% and the lenders 10%. RIL will use a debt of Rs 2,349 crore to fund the proposed offer and it will pump Rs 500 crore as working capital requirements. ACRE will issue security receipts for Rs 14 crore to lenders. However, details of the Welspun offer are not available, the publication said.

On April 6, 2021, Sintex was admitted to bankruptcy proceedings by the National Company Law Court of Ahmedabad following a request from Invesco Asset Management regarding a default of Rs 15 crore in the payment. principal and interest on non-convertible bonds in September 2019.

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A tool that allows you to access your daily income – The New Indian Express https://directvanqex.com/a-tool-that-allows-you-to-access-your-daily-income-the-new-indian-express/ Sun, 09 Jan 2022 04:42:00 +0000 https://directvanqex.com/a-tool-that-allows-you-to-access-your-daily-income-the-new-indian-express/

Express news service

NEW DELHI: If a person could accumulate their daily earned salary, would that ease their financial pressures? About 38% of those polled in a survey answered yes to what may seem like a hypothetical question but is not.

A bank-like setting, where you can see and withdraw the money you’ve earned, or as it’s called, Earned Wage Access, is a fintech product that allows employees to access a portion of their accumulated salary but unpaid at any time before payday.

Employees, according to a Refyne survey, seem delighted with the new concept. While 77% of those surveyed are positive about this concept and are ready to rate its use, 28% said they would use an EWA product. Notably, 59% of those surveyed would consider EWA a deciding factor for their next job.

The report further found that the greatest interest in EWA exists among millennial professionals. Employees believe EWA will help them with more cash flow to manage unexpected expenses, investment planning and improve their well-being. financial.

But what about employers?

Refyne, which claims to be India’s first and largest EWA platform, established in 2020, has onboarded 120 clients in the past year. months of growth with new clients as well as increasing adoption by staff of existing partners as employers can clearly see the benefits for their employees (both full-time and on contract) with the Salary Access solution won from Refyne.

“For employers, Refyne is a free, risk-free product that integrates seamlessly with any human resources and payroll management software. Refyne manages the capital for withdrawals of earned wages, which means employers’ working capital stays intact and allows them to maximize their cash flow. EWA also saves man hours for HR managers spent processing salary advances and associated paperwork, ”said Sharma, noting that Refyne has no direct competitors in the country and that its Indirect competitors include payday lenders, loan applications, loan sharks, and other informal and unregulated credit program providers.

Akbar Khan, who is the CEO of an EWA start-up, Rain India, says his company works with major corporate clients across manufacturing, IT, personnel, healthcare, hospitality and other sectors in India. He says there are only a handful of EWA Companies operating in India.

“EWA is a relatively new concept for the Indian market which clearly differentiates itself from personal / consumer loan, payday advance and payday loans. “

Before Rain launched its business in India earlier this year, they also undertook an in-depth primary research exercise of the salaried employee cohort.

“Some of the interesting information from the research demonstrated a strong product market for EWA and the need for a credible global financial wellness provider with deep local expertise. For example, 90% of respondents received their salary once, at the end of the month, while 20% ran out of funds in the first 10 days of the month, 40% in the middle of the month and 85% at the end of the month. month,”

Sumeet Doshi, Country Manager, UKG India, a company that recently partnered with Rain, says providing access to their own salaries is key to ensuring employees feel valued and supported and are able to take charge their own financial well-being.

“Our partnership with Rain India ensures that we continue to deliver on our commitment to providing meaningful and impactful solutions to our customers here in India. “

HR concerns

While employees seem intrigued, HR managers are concerned about integrating the EWA solution into the lifestyle or culture of the Indian workforce.

“The reason is that the flexibility to access wages on any day of the month will require a lot of administrative work. Another big challenge that HR managers foresee is the flight of workers. In western professional culture, the longevity factor is quite high. Employees stay in their company for a long time. In India, on the other hand, there are many sectors where attrition is very high, ”explains Vicky Jain, founder of the technology start-up RH uKnowva, explaining that such a change will require a major transformation of the culture of the company. organization because a whole.

Also, from a technical standpoint, the existing payroll infrastructure may not be configured to handle regular employee demands to pay, Jain said.

“While there is no doubt that EWA is a revolutionary approach to improving payroll, a fantastic opportunity to be progressive and forward-thinking, and a flexible way to support changing work habits and patterns. life of employees in the post-pandemic era, but implementing the same in Indian work culture would not be an easy task. The concept is still new and only time will tell if it will gain traction in Indian work culture, ”he added.

New paycheck

  • Earned Wage Access (EWA) is a fintech product that allows employees to access a portion of their accumulated but unpaid wages anytime before payday.

  • Millennial professionals show maximum interest in EWA.

  • Employees believe it will help them with more cash to manage unforeseen expenses, plan investments, and improve their financial well-being.

  • Employers fear that the flexibility of accessing wages on any day of the month will require a lot of administrative work.

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Why It Can Be Very Hard For You To Save Money This Year https://directvanqex.com/why-it-can-be-very-hard-for-you-to-save-money-this-year/ Fri, 07 Jan 2022 18:46:08 +0000 https://directvanqex.com/why-it-can-be-very-hard-for-you-to-save-money-this-year/

If you’ve made a New Year’s resolution to boost your savings account in 2022, you are not alone. In a recent Fidelity survey, 43% of people considering a financial resolution said saving more money was one of their goals.

Americans’ the savings are gone over the past two years. The personal savings rate – the percentage of disposable income Americans save each month – has peaked at a staggering level 33.8% in April 2020 because so many of the things we were used to spending money on, such as restaurants, entertainment, shopping, and vacations, were not available during the early days of the pandemic.

Savings rates declined slightly as the economy reopened, but remained extremely high by historical standards for months.

In November, this figure had fallen to 6.9%, its lowest level since December 2017. This is because the landscape for savers evolves rapidly, and there’s a good chance it will be even more difficult to save money in 2022.

Here are some of the reasons it may be harder to save this year.

High inflation

Consumer prices in the United States are rising at a record pace thanks to a huge increase in demand for goods alongside an ongoing global supply chain crisis, and the situation has only been made worse by a persistent labor shortage. In November, prices were 6.8% higher than at the same period the previous year, with inflation in certain categories, such as Meat and gasoline, significantly higher than that.

The Federal Reserve is expected to withdraw support for the economy over the next few months to help prices stabilize again (more on that later), but the process will be slow.

In the meantime, get ready to pay more in 2022 for basic necessities like groceries, gasoline, clothes and even. domestic heating costs and junk food like Oreos and Sour Patch Kids. What if you need to make a large purchase, like to buy a car Where residence, be prepared for particularly high prices.

No more stimulus checks and relief money

In the past two years, Congress has authorized three rounds of federal stimulus payments to help Americans weather the pandemic. Experts say the windfall from those payments – capped at $ 1,200, $ 600 and $ 1,400 per person – has reduced debt, strengthened savings accounts and even helped lift families out of poverty.

As part of the American Rescue Plan in March (the same bill that authorized the third dunning check), Congress authorized a major project, albeit temporary, expansion of the child tax credit (CTC) for 2021.

The expansion increased the maximum credit value from $ 2,000 to $ 3,600 per child and allowed eligible parents to receive half of their credit in six monthly installments. The last child tax credit prepayment of 2021 hit parents’ bank accounts in December.

A survey conducted by the Social Policy Institute at the University of Washington last summer, found that nearly three-quarters of parents were preparing to receive the planned credit by using it to bolster their emergency savings.

The CTC will not go away completely in 2022, but for now it is expected to drop back to $ 2,000, and parents will no longer receive the money in advance monthly payments.

The Biden administration and some congressional leaders have argued that the extended credit payments should be continued until 2022, but no action has been taken. And while nothing is impossible, a fourth dunning check is not likely.

As a result, many Americans will likely no longer see these additional federal relief payments in 2022, although qualifying parents will still see the other half of their CTC credit expanded on the tax returns they file this year.

Student loan repayments are likely to resume

During the pandemic, the federal government froze student loan payments and accrued interest for federal borrowers. This freeze has been extended several times, more recently until May 1, 2022.

There is no doubt that the suspension of payments was a a godsend for millions of borrowers. A survey conducted by Pew Charitable Trusts last summer found that 59% of borrowers who stopped paying during the break used the money mainly for essential expenses like food and rent. Interestingly, only 9% of those surveyed said the extra money was spent on savings.

Despite pressure from progressives and supporters of a further extension of the freeze or a student loan forgivenessAt present, it appears that borrowers should plan to start repaying their loans again in the spring.

Low interest rates for savers

In March 2020, the Federal Reserve lowered its benchmark interest rate to near zero in order to keep the markets buzzing and avoid an economic collapse. In the months that followed, banks across the country cut their own rates to stay competitive.

While interest rate cuts in banks are normal during an economic downturn, they also mean your money in savings accounts earns much less than in good times.

The spur of the sharp rate cuts was particularly painful for customers of online banks like Marcus, Ally and Axos, who had wooed consumers with the promise of high-yield savings accounts that paid interest rates of 2% and more, compared to fractions of a percent at traditional banks. From now on, the prices of best high yield savings accounts vary between 0.3% and 0.5%.

The Fed is expected to slowly start raising rates again this year, but it can take years so that consumer bank interest rates rise again.

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Factbox: Trump’s Fed eased banking rules. Now, what can Democrats take back? https://directvanqex.com/factbox-trumps-fed-eased-banking-rules-now-what-can-democrats-take-back/ Wed, 05 Jan 2022 16:12:00 +0000 https://directvanqex.com/factbox-trumps-fed-eased-banking-rules-now-what-can-democrats-take-back/

WASHINGTON, Jan.5 (Reuters) – Under the leadership of Republicans appointed by former President Donald Trump, the US Federal Reserve has relaxed a series of banking rules and requirements introduced in the wake of the 2007-2009 financial crisis, arguing that they were too brutal and expensive.

With a new Democratic candidate set to take the post of vice president of oversight left vacant last month by Randal Quarles, who led the regulatory overhaul, the Fed should seriously consider reversing many of the changes over the years. last four years.

Here are some of the more controversial changes Democrats, advocacy groups and the Fed’s only Democratic governor, Lael Brainard, have criticized for weakening financial system guarantees.

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ADAPTATION OF CAPITAL AND LIQUIDITY

In 2018, Congress passed a law directing regulators to relax capital and liquidity requirements for all banks except the nation’s largest, with lawmakers saying post-crisis rules were too strict for them. small banks and hurt the economy.

The Fed has led the way by “adapting” the rules. While the law only ordered relief for lenders with up to $ 250 billion in assets, Quarles used the discretionary powers the law gave the Fed to extend relief to banks with up to $ 250 billion in assets. $ 700 billion in assets.

Quarles’ successor is likely to reconsider this discretionary relief which could be reversed without going through lawmakers, analysts have said.

BANK ‘WILL OF LIFE’

The 2018 law also ordered the Fed to reduce the frequency with which large banks must file “living wills” detailing how they could be safely liquidated in the event of a crisis.

Once again, Quarles went further than prescribed by Congress, allowing banks with up to $ 700 billion in assets to submit a full plan once every six years rather than once a year as previously required. .

REWRITING THE VOLCKER RULE

The implementation of the “Volcker rule”, which prevents banks from engaging in speculative investments on their own account, was one of the most controversial regulatory projects to emerge from the financial crisis a decade ago.

Streamlining this extremely complex rule was a priority for Quarles when he joined the Fed, but it still took the Fed and four other regulators two and a half years to finish rewriting it.

Critics said the changes put the financial system at risk, but overhauling them would consume a lot of resources, analysts said.

STRESS TESTS

Quarles made a number of changes to big bank stress tests, the annual health checks that are often the biggest strain on lenders, determining their capital requirements.

He tried to make tests, which banks have long criticized as opaque and subjective, more predictable and transparent.

Most notably, he removed the Fed’s power to dismiss banks on “qualitative” rather than quantitative grounds.

Many analysts expect Quarles’ replacement to strengthen this cornerstone of Fed banking supervision, including ordering lenders to set aside enough cash to cover eight quarters of future dividend payments, up from four currently. .

INTER-AFFILIATE EXCHANGES

While many of Quarles’ changes targeted small and mid-sized banks, one was a direct victory for Wall Street lenders.

In 2020, the Fed and other regulators agreed to reduce the amount of collateral banking organizations must set aside to protect certain swap transactions between their subsidiaries, freeing up about $ 40 billion, according to industry estimates.

Critics have warned that the change could encourage banks to accumulate large risky swap positions and said the Fed should review it.

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Reporting by Pete Schroeder; edited by Michelle Price and Pravin Char

Our standards: Thomson Reuters Trust Principles.

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8 best mortgage refinancing companies of January 2022 | Personal finance https://directvanqex.com/8-best-mortgage-refinancing-companies-of-january-2022-personal-finance/ Mon, 03 Jan 2022 17:08:27 +0000 https://directvanqex.com/8-best-mortgage-refinancing-companies-of-january-2022-personal-finance/

How Often Can You Refinance Your Home?

There is no limit to the number of times you can refinance your mortgage. However, refinancing can be costly. Just because you can always refinance your home doesn't mean you should do so.

How Much Does It Cost to Refinance a Mortgage?

Refinancing your mortgage can cost around 2% to 6% of your loan amount. This includes fees for the loan application, loan origination, home appraisal, and more, depending on the type of mortgage. With a no closing cost refinance loan these fees get rolled into the loan balance or interest rate.

When to refinance a home loan?

The best time to refinance a mortgage is when interest rates are lower than when you locked in your rate and closed on your current mortgage. Refinancing when rates are lower will allow you to reduce your monthly payments. You may also refinance to a shorter term and pay more each month but save on interest over the life of the loan.

What Are Mortgage Refinance Rates Today?

Available mortgage interest rates are constantly changing. On December 3, for example, the average for a 30-year refinance was 3.772%. That was a bit lower than the previous day. Money publishes the latest average rates each day.
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Oman’s total budgeted public expenditure to exceed OMR 12 billion in 2022 https://directvanqex.com/omans-total-budgeted-public-expenditure-to-exceed-omr-12-billion-in-2022/ Sat, 01 Jan 2022 18:13:00 +0000 https://directvanqex.com/omans-total-budgeted-public-expenditure-to-exceed-omr-12-billion-in-2022/ Oil and gas revenues are expected to amount to OMR 7.24 billion.

Muscat: Oman’s total public expenditure under the 2022 budget is estimated at around OMR 12.13 billion, a 2% increase over the estimated budget for 2021.

This includes the cost of servicing the public debt, which amounts to OMR 1.3 billion. The budget also estimates that oil prices will remain at around $ 50 a barrel, resulting in estimated revenue collection of OMR 10.58 billion, a 6 percent increase in revenue from 2021.

Oil and gas revenues are expected to be OMR 7.24 billion (68% of incoming revenues), with the remainder coming from non-oil revenue sources. Oman plans to finance the estimated budget deficit (about OMR 1.5 billion) by drawing about OMR 400 million from reserves and financing the remainder through external and internal borrowing.

“Preliminary data indicates that the general state budget for 2021 is heading towards achieving the lowest annual deficit since 2014, despite the fluctuation in oil prices in previous periods, thanks to the efforts made by the government to through its medium-term commitment. The financial plan, in terms of revenue and expenditure, aims to achieve its main objectives of increasing the confidence of lenders and credit rating institutions, ”Sultan bin Salem Al Habsi, Minister of Finance, told the agency. Oman press release.

“The draft budget for this year has been prepared in accordance with the objectives and pillars of the tenth five-year plan 2021-2025,” Al Habsi added. “This represents the first efforts under Oman Vision 2040 and aims to achieve financial sustainability and boost economic diversification. “

The budget takes into account the need to maintain spending levels in basic services such as education, health, housing and social services, which are among the most important considerations when it comes to preparing estimates related to public expenditure. In addition, it also incorporates the measures necessary to improve the business environment and expand partnership projects with the private sector.
The minister explained, “If oil prices exceed the price approved in the budget, the priority will be to harness the additional yields to reduce the deficit and pay off loan maturities.

Oman plans to increase its oil production this year to more than one million barrels per day. The finance ministry explained that the country has a number of economic and social goals that it wants to achieve this year, including maintaining safe and sustainable levels of public spending, continuing to increase the contribution of non-oil revenue and giving the priority for projects linked to productive sectors.

Other important goals include the digital transformation agenda, maintaining spending levels for basic services, redirecting support to required segments of society, and continuing efforts to improve the Sultanate’s credit rating.

The budget also takes into account the need to support training and rehabilitation, create new employment opportunities and provide assistance to small and medium-sized enterprises in the country.

In 2021, the major credit rating agencies published their assessment reports on the credit rating of Oman. Standard & Poor’s, in its report published in October 2021, revised Oman’s outlook from stable to positive and confirmed its rating at B +. This positive outlook is attributed to strong policy responses to economic and health challenges and to actions taken under the Medium Term Budget Plan.
Plan (MTFP) towards fiscal sustainability. This is in addition to a recovery in oil prices and a decline in the consequences of the COVID-19 pandemic, which would reduce government deficits and limit the increase in net public debt over the next three years.

Standard & Poor’s also said that Oman’s ratings could be upgraded over the next year if fiscal measures and stronger economic growth lead to improved fiscal performance and a reduction in net public debt.

Moody’s changed the outlook for Oman’s credit rating from negative to stable and confirmed its rating at Ba3. According to Moody’s, the change in outlook reflects the significant easing of government liquidity and pressures on external financing, mainly due to the ongoing implementation of the medium-term fiscal plan and significantly higher oil prices since. mid-2020, which will support a drop in the direct public debt burden to around 60% of GDP by 2024.

-With ONA inputs

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LIBOR Transition Update | Proskauer Rose LLP https://directvanqex.com/libor-transition-update-proskauer-rose-llp/ Thu, 30 Dec 2021 20:24:32 +0000 https://directvanqex.com/libor-transition-update-proskauer-rose-llp/

This LIBOR transition update, aimed primarily at private credit lenders, provides a recap of recent trends and reflects new developments on the eve of the LIBOR transition for banks, including new SOFR issues by lenders. credit and the context around “spread adjustments”. We are actively monitoring developments in the LIBOR transition and will continue to provide relevant updates.

deadline of December 31, 2021; Relevant regulations

As readers are no doubt aware, the federal regulators of the affected banks, in consultation with the administrator of LIBOR and various state agencies, have made it clear that the banks they regulate must stop granting new grants. LIBOR-based credit extensions by December 31, 2021..

In anticipation of this deadline, several investment banks have, in recent weeks and months, set up new syndicated credit lines based on alternative reference rates (mainly the SOFR). As the new year dawns, we expect the vast majority of syndicated credit facilities will be based on alternative benchmarks like SOFR.

Direct lenders are generally not subject to banking regulations and do not fall under the jurisdiction of the agencies which set the deadline on December 31. As a result, in discussing LIBOR succession with many of our clients throughout the year, we do not anticipate an immediate transition to SOFR (or any other alternative benchmark rate) by private lenders in 2022. However, many direct lenders may be subject to other regulatory scheme, including, for example, regulation by the SEC, an agency that has raised concerns about LIBOR. clear. For this reason and for some of the reasons we describe below, we anticipate that direct lenders will likely provide an increasing number of SOFR-based loans in the coming months.

LIBOR Replacement Documentation

As direct lenders continue to prepare to issue new loans on the basis of alternative benchmarks, we have continued to observe a general tendency to include a “hard-wired” replacement language for “fallback” LIBOR in the documentation of LIBOR. credit. As a reminder, there are generally two options for addressing LIBOR succession in credit agreements: the “hard-wired approach”, which provides for automatic replacement of LIBOR by SOFR upon certain trigger events, and the “hard-wired approach”. amendment ”, which is in effect an“ agreement to agree ”giving the agent the power to modify the document to replace LIBOR, if necessary, subject to the consent of the borrower, and often with the rights of consent negative lender required. A considerable number of private lenders now favor the hard-wired approach in LIBOR credit facilities (but see our notes below regarding “spread adjustments” in the hard-wired documents).

SOFR issuance by private lenders

With the advent of new SOFR-based syndicated credit facilities, SOFR termsheets, funding grids, letters of commitment and credit agreements are also making their way into the private markets. (To be clear, as noted in previous bulletins, the trend towards SOFR as opposed to other alternative benchmarks is strong at this point, and we are aware of very little, if any, of credit facilities based on non-SOFR alternatives in private markets). We have seen a noticeable (although still modest) increase in SOFR emissions (or a proposed SOFR emission) in recent weeks. We expect this trend to continue and likely increase in 2022, for several reasons.

First, any private credit lender considering participating in a junior tranche of capital (a second lien, for example) in a structure in which the senior tranche is syndicated or otherwise provided by a bank will likely be under some pressure to provide a system based. on SOFR. ready, since the senior tranche will almost certainly be SOFR-based. While it is possible to fork the benchmark rates (and, indeed, we know of at least one credit facility in which the revolving commitments were based on SOFR and the term loan was based on LIBOR), we expect most borrowers to insist on a single rate. through the slices for ease of administration.

Second, many direct lenders enter into leveraged or subscription credit facilities themselves as part of their overall strategy. Any such facility provided or arranged by a regulated bank (i.e. the vast majority of them) and concluded after December 31 will be SOFR based. A lender with a SOFR-based leverage facility but a predominantly LIBOR-based loan portfolio may be subject to risk management issues caused by this mismatch between liabilities and assets, and these challenges could lead to an increase SOFR emissions.

Third, as interest rates rise over time, borrowers may become more likely to enter into interest rate swaps and hedges, which (given the LIBOR derivatives market’s own transition ) may further incentivize loan market participants to switch to SOFR.

Finally, direct lenders will be subject to the same macroeconomic trends that led to the departure of LIBOR. As noted above, regulatory pressure may continue to increase and lenders may have concerns (or their investors may have concerns) about the contracting LIBOR market and the inherent instability of LIBOR which initially led to a downturn. new rate.

Of course, at the end of the day, the question of the private credit market’s transition out of LIBOR is a question of timing. As readers know, the final deadline for LIBOR is June 30, 2023, after which it will no longer be published, and all new and existing credit facilities will have to move to another benchmark rate before that date.

A few words on spread adjustments

Spread adjustments, the precise mechanisms of which we discussed in our previous bulletin, are designed to compensate lenders for the difference between LIBOR (an unsecured, “credit-sensitive” rate) and SOFR (a guaranteed rate that s ‘is historically traded at a discount to LIBOR).

For new SOFR-based loans, the syndicated market has seen several different approaches taken on spread adjustments. One approach has been to apply a spread adjustment of 10 basis points for one-month SOFR, 15 basis points for three-month SOFR and 25 basis points for six-month SOFR. Another approach has been to set the price without any spread adjustment, but instead include the economics of the spread adjustment directly into the margin. We expect to see additional options tested in the market as the transition begins in earnest. As SOFR loan issuance in the private market increases, we expect to see the same exploration price there as well.

For new LIBOR-based loans with a hard-wired fallback language, the standard language published by the Alternative Reference Rates Committee contemplates spread adjustments of around 11, 26 and 42 basis points for maturities of one, three and six months, respectively. (This is the same spread adjustment recommended by ISDA). The last few months have also been marked by negotiations around these spread adjustments, although the recommendations of the ARRC remain common in the market.

Key points to remember

As the LIBOR transition continues, private lenders should:

  • perform a portfolio review to understand the transition and / or fallback language in existing credit documents (keeping in mind the final deadline to modify existing LIBOR transactions in June 2023);
  • consider formulating a fallback language policy for new LIBOR-based transactions (including spread adjustments);
  • prepare commercial, legal, operational and agency functions for new SOFR issues; and
  • continue to closely monitor the issue, including its development in syndicated markets.

We continue to monitor this issue closely and will provide additional updates as needed.

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10 things you should always buy in bulk https://directvanqex.com/10-things-you-should-always-buy-in-bulk/ Wed, 29 Dec 2021 14:47:50 +0000 https://directvanqex.com/10-things-you-should-always-buy-in-bulk/
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Savvy buyers know that one of the best ways to tell if something is a good deal is to look at the unit price. That is, see how much an item costs per ounce, leaf, or pill.

The best unit prices often come from bulk purchase. You also don’t need to belong to a warehouse club to buy in bulk. Look for family sizes in your supermarket or stock up when you see a good sale.

It doesn’t make sense to buy everything in bulk, but the following items can – and should – be purchased in bulk for maximum savings and convenience.

1. Non-perishable foods

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Refrigerated foods have a short shelf life, but some non-perishable foods can last for years or even decades. These include canned foods, certain grains and dried beans, among others that we detail in “11 foods that can be stored for years”.

However, although items like rice and flour have a long shelf life, they must be stored properly to prevent insects or other pests from getting into their packaging. If you have room in a large freezer, putting some uncooked grains in will do.

2. Cleaning products

A young woman cleans her bathroom mirror with a spray bottle and a squeegee
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The cleaning products will expire – eventually. But with most types of cleaners, you have about a year to two before they start to lose their effectiveness. This means buying them in bulk shouldn’t be a problem as long as you clean them regularly.

An exception is bleach. You shouldn’t buy bulk bleach because it has a shelf life of only around six months, as we note in “10 Things You Should Never Do With Bleach.”

3. Melting ice

Workers repairing a power line during a power outage
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Those who live in northern climates can safely stock up on melting ice or rock salt for the winter months. Correct be sure to store it in a way that prevents moisture and sunlight from entering the packaging.

Buying melted ice in bulk has the advantage of never having to go to the store after a storm and find it sold out.

4. Prescription drugs

Patient holding prescription pill bottle
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As they say, your mileage may vary here. Depending on your insurer, you may be able to get a 90-day supply of medication either from your local pharmacy or through a mail order service. The quota for these top-ups may be lower than it would be for three 30-day top-ups.

Even if you don’t have insurance, or if you choose to pay the non-insurance price instead of your co-pay, you can get a 90-day supply of many generic drugs for less money than three supplies of. 30 days in some pharmacies. For example, at Walmart, a 90-day supply of some generic drugs costs $ 10, whether or not you have insurance, while a 30-day supply costs $ 4.

5. Bulbs

comparative purchases
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Modern LED and fluorescent bulbs can last for years, and that gives you plenty of time to find good deals on replacements. When you do, go ahead and buy some extras.

6. Cat litter

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If you have cats, you know kitty litter can get expensive. Buying the largest size possible can help lower your overall cost. This never go wrong, and you can store it indefinitely in a dry place.

7. Medicines for fleas and ticks for pets

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Speaking of pets, check the prices of their flea and tick medication. Packages with six or 12 month protection are often less expensive, per dose, than those with three months or one month.

8. Toiletries

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Shampoo, conditioner, lotion, and soap can usually be stored unopened for years without affecting the contents. Even after opening the packages, skin care products can be good for up to two years.

In other words, buy the big bottle or refuel at a sale without worrying about losing your money.

9. Storage and garbage bags

Costco Kirkland Signature Garbage Bags
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You can safely buy storage bags and garbage bags in large quantities. They won’t spoil, and larger packages usually have a lower unit price.

10. Paper products

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As we saw at the start of the COVID-19 pandemic, having an extra supply of toilet paper isn’t a bad idea. With towels and paper towels, toilet paper will never go bad, assuming you store it in a dry place.

So buy the jumbo pack the next time you go to the store and avoid that feeling of panic the next time the shelves are cleared of this essential product.

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