Latest news with #refinancing
Yahoo
4 hours ago
- Business
- Yahoo
TPG revives Debenhams links with £175m Boohoo debt deal
The London-listed fashion retailer Boohoo Group is close to securing a £175m refinancing boost in a deal that will revive memories of one of Britain's most notorious private equity takeovers. Sky News has learnt that Boohoo, which has been embroiled in a tussle to rename itself as Debenhams, is in advanced talks to secure a significant chunk of debt from TPG, the US-based investment giant. The discussions are said to be close to an agreement, although precise details, including the ultimate size of the refinancing package and the extent of TPG's contribution, were unclear on Wednesday evening. Money latest: If confirmed, it will re-establish TPG as a Debenhams stakeholder more than 20 years after the buyout firm was part of a consortium which delisted it from the London Stock Exchange. In 2003, TPG, CVC Capital Partners and Merrill Lynch Private Equity paid £1.7bn to take the department store chain private in a deal which saddled the retailer with over £1bn of debt. They then relisted it three years later in a flotation which proved to be lucrative for the private equity firms but became a poster-child for the financial engineering adopted by the industry. Debenhams' financial performance deteriorated over the following decade, however, amid rapidly shifting consumer behaviour. In 2019, the company fell into administration for the first time, before collapsing again soon after the start of the COVID pandemic the following year. Boohoo, which saw its own valuation soar as consumer and investor demand soared for online fashion retailers, snapped up the Debenhams brand in 2020. That deal infuriated the Frasers Group tycoon Mike Ashley, who had fought a running battle with the Debenhams board as he attempted to buy the company. Earlier this year, Mr Ashley used Frasers' big minority stake in Boohoo to vote down its plans to change its legal name to Debenhams - although the company is now using the name as its corporate brand. The group's refinancing needs saw it appoint Interpath Advisory earlier this year. In May, the Telegraph reported that Boohoo was talking to expensive high-yield lenders about providing a £50m chunk of debt to the company. TPG and Interpath declined to comment, while Boohoo did not respond to an enquiry from Sky News.
Sky News
5 hours ago
- Business
- Sky News
TPG revives Debenhams links with £175m Boohoo debt deal
The London-listed fashion retailer Boohoo Group is close to securing a £175m refinancing boost in a deal that will revive memories of one of Britain's most notorious private equity takeovers. Sky News has learnt that Boohoo, which has been embroiled in a tussle to rename itself as Debenhams, is in advanced talks to secure a significant chunk of debt from TPG, the US-based investment giant. The discussions are said to be close to an agreement, although precise details, including the ultimate size of the refinancing package and the extent of TPG's contribution, were unclear on Wednesday evening. If confirmed, it will re-establish TPG as a Debenhams stakeholder more than 20 years after the buyout firm was part of a consortium which delisted it from the London Stock Exchange. In 2003, TPG, CVC Capital Partners and Merrill Lynch Private Equity paid £1.7bn to take the department store chain private in a deal which saddled the retailer with over £1bn of debt. They then relisted it three years later in a flotation which proved to be lucrative for the private equity firms but became a poster-child for the financial engineering adopted by the industry. Debenhams' financial performance deteriorated over the following decade, however, amid rapidly shifting consumer behaviour. In 2019, the company fell into administration for the first time, before collapsing again soon after the start of the COVID pandemic the following year. Boohoo, which saw its own valuation soar as consumer and investor demand soared for online fashion retailers, snapped up the Debenhams brand in 2020. That deal infuriated the Frasers Group tycoon Mike Ashley, who had fought a running battle with the Debenhams board as he attempted to buy the company. Earlier this year, Mr Ashley used Frasers' big minority stake in Boohoo to vote down its plans to change its legal name to Debenhams - although the company is now using the name as its corporate brand. The group's refinancing needs saw it appoint Interpath Advisory earlier this year. In May, the Telegraph reported that Boohoo was talking to expensive high-yield lenders about providing a £50m chunk of debt to the company.
Yahoo
6 hours ago
- Business
- Yahoo
Refinancing your ARM into a fixed-rate mortgage
Key takeaways If you're nearing the end of your ARM loan's initial fixed-rate period and your rate will rise significantly, you might be considering refinancing to a fixed-rate mortgage. A fixed-rate mortgage provides more predictability, as the interest rate and your monthly payment stay the same for the loan's duration. You'll need to meet ARM refinance requirements to apply, and it's a good idea to compare offers from multiple lenders — not just your current lender. If you're nearing the end of the initial term on your adjustable-rate mortgage (ARM), you might be wondering if now is a good time to refinance to a fixed rate. Here, we break down how to refinance an ARM and when it's a good idea to refinance to a fixed rate. Can you refinance an ARM loan? Yes, you can refinance an ARM loan. By doing so, you'll replace your existing mortgage with a new one — it can be either another ARM or a fixed-rate mortgage. A fixed-rate mortgage is a home loan with an interest rate that stays the same for the entire loan term, usually 15 or 30 years. This means your monthly principal and interest payments never change, which can make payments easier to plan for. Shop Top Mortgage Rates Personalized rates in minutes A quicker path to financial freedom Your Path to Homeownership With an ARM, many people choose to refinance due to their rate adjusting higher. However, it's important to remember that refinancing isn't free — you'll have to pay closing costs. So, even if you're refinancing to a much lower rate, it's smart to calculate your break-even point to determine when you'll start saving money. Keep in mind: You don't have to stick with your current lender when refinancing an ARM. Be sure to shop around to get the best rates and terms. How to refinance an ARM Refinancing an ARM is very similar to refinancing a fixed-rate mortgage. Here are the basic steps to follow: Compare quotes: Don't just refinance with your current lender without shopping around first. Research multiple lenders and get quotes on rates, fees and terms that you can compare to find the best offer. Choose a lender and apply: Gather all of your financial documents and submit the paperwork and application to the lender of your choice. Schedule the appraisal: Like most mortgage loans, refinances generally require a home appraisal. Go through underwriting and close: The lender's underwriting process will verify your finances. Once everything is in order, assuming your loan is approved, you'll schedule a closing date to sign the paperwork and pay the closing costs. Lenders typically offer specific mortgage refinancing loans, so you'll use their refinance application form to apply. The fact that you already own the home can simplify the process. Requirements for refinancing an adjustable-rate mortgage Before you start the process, make sure you meet the requirements. The specific criteria may vary by lender, but here are some common requirements to refinance a mortgage, whether to another ARM or a fixed-rate loan: Credit score: Conventional loans generally require a credit score of at least 620. DTI ratio: To refinance, your debt-to-income ratio should be below 50 percent. Equity percentage: You typically need to maintain a minimum of 20 percent equity (though some lenders will allow less). Duration of ownership: In most cases, before a mortgage can be refinanced you'll need to make at least six payments on the loan — meaning you need to have lived there for at least six months. Learn more: ARM loan requirements in 2025 Costs of refinancing an ARM Remember: Refinancing isn't free. Before switching from an ARM to a fixed-rate loan, make sure you understand how much it costs to refinance a mortgage. You'll need to budget for a number of expenses, including: Origination fee Appraisal fee Title services On the plus side, refinancing costs often total far less than the closing costs on a home purchase loan. While many of the costs are fairly similar, you'll skip a few when you refinance. For instance, you won't be paying for a home inspection, and you likely won't need to pay for an attorney. Similarly, unless you're tapping equity, some fees will be lower since they're calculated as a percentage of the loan amount. Benefits of refinancing an ARM to a fixed-rate mortgage Fixed-rate mortgages keep the same mortgage rate throughout the entire loan term. ARMs are more complex: An ARM is a 30-year loan with a fixed rate for an introductory period (typically three to 10 years). After this period, the rate adjusts every six months or once per year, based on a specific market index. While ARMs may offer an initial lower rate than a fixed-rate loan, once that introductory rate ends, your payment can go up significantly. Here are the main benefits of refinancing an ARM to a fixed-rate mortgage: Your payments are always the same: A fixed-rate mortgage gives you the certainty of predictable payments. Rather than wondering how the market and economic trends will impact your adjustable rate — and consequently your monthly payments — you can rely on a consistent cost that won't change over the course of the loan. You can budget more easily: With a fixed-rate loan, the stable sum you put toward your major housing cost allows you to more effectively budget for the other expenses in your life, both now and in the future. You still have options: If a 30-year mortgage sounds like a lifetime, you can also look at a 15-year fixed-rate mortgage. The interest rates on this type of loan are even lower than the rates for a 30-year fixed loan, but the tradeoff is that you'll have higher monthly payments due to the accelerated timeline. Downsides of refinancing an ARM Refinancing an ARM to a fixed-rate mortgage isn't always the right choice. Here are some of the potential drawbacks to consider: You'll need to pay closing costs: Even though closing costs on a refinance are typically lower than a purchase loan, they can still cost thousands — and reduce (or delay) the benefits you'd expect from refinancing. You might lose out on savings: If you refinance to a fixed-rate loan and rates drop, you won't see any of the interest rate savings you would have gotten on your ARM. It could take longer — and cost more — to repay your mortgage: If you extend your loan term as part of the refinance, you could end up paying more in interest over the life of your mortgage. Plus, it'll delay your payoff date. Should you refinance an adjustable-rate mortgage (ARM) to a fixed-rate mortgage? Can you refinance an ARM loan? Sure. But should you? Today's high mortgage rates might make this less appealing if your ARM originated back in the pre-pandemic days. 'It's possible for borrowers who got their ARM five years ago to still have a lower monthly payment and pay less in interest during the first year or two of rate resets than what they would pay on a new mortgage at today's rates,' says Austin Kilgore, analyst for lender Achieve's Center for Consumer Insights. And there are limits to the increases, too. 'While interest rates are significantly higher today than they were five years ago, the rate resets on an existing ARM have both an annual cap, typically 1 to 2 percent per year, and a maximum cap, typically 5 to 6 percent over the life of the loan,' he adds. On the other hand, if your introductory rate is about to end, refinancing might make sense — the rate jump you might experience could be a shock. If you can secure a lower rate on a fixed-rate loan than the rate your ARM is about to adjust to, choosing to refinance an ARM to a fixed rate could be a smart move. How to decide to refinance To find out whether refinancing your ARM loan would be beneficial, consider the following: Your credit score: You need a great credit score to get the best interest rate. 'Someone coming up on the end of an ARM presumably has five or more years of timely mortgage payments on their credit history,' says Kilgore. 'There's a good chance their credit score is better now, and they may qualify for something better.' If your score needs some work, however, you may want to wait. Your financial goals: Before applying, determine why you want to refinance. For instance, do you want to pay off your mortgage sooner, have a more predictable payment or cash in some of your equity for home improvements or debt consolidation? Your long-term plans: How long do you intend to stay in the home? Weigh that against your ARM timeline. For example, if you only plan on staying in your home for a few more years and your ARM won't reset until after that, it might make sense to stick with your current loan, since you may not save enough to make refinancing worth it. Your ability to afford closing costs: Refinance closing costs can run anywhere from 2 to 6 percent of your mortgage principal. That means, for a $300,000 mortgage, you may pay $6,000 to $18,000 in closing costs. You can roll these into your mortgage with a no-closing-cost refinance, but if you do that, remember that you'll pay interest on them. FAQ What is the most obvious disadvantage of an ARM? The main disadvantage of an ARM is that your interest rate can increase after the introductory period ends — and can change again every six months or every year going forward. If the rate goes up, you'll have to put more money toward your monthly mortgage payments, which might mean putting other financial goals on hold or cutting back in certain areas of your life. What happens if the interest rate on an adjustable-rate mortgage loan goes up? If the interest rate on an ARM goes up, your monthly payment will also increase — and you'll end up paying more interest over the life of your loan. When should you refinance to an ARM? Refinancing to an ARM might make sense if you want a lower rate right now — especially if you plan to sell your home in the next several years (or at least before the introductory period ends). You might also consider this option if you need more affordable payments now, but you'll be able to handle larger ones down the road — when you go to work after getting a grad school degree, for example. You can also refinance an ARM to another ARM if you like, as long as you meet the lender's requirements.
South China Morning Post
13 hours ago
- Business
- South China Morning Post
Hong Kong builder Lai Sun seeks more bank support to refinance US$446 million loan
Hong Kong developer Lai Sun Development has been working to win banks' backing for a HK$3.5 billion (US$446 million) loan refinancing deal, but after about six months of talks, nearly half the lenders still aren't on board, according to people familiar with the matter. The property firm – controlled by local tycoon Peter Lam – has secured commitments from nine out of the original 19 lenders for the five-year refinancing, said the people, who declined to be identified discussing private matters. The existing loan matures on October 5, according to Bloomberg-compiled data. Even if Lai Sun doesn't manage to secure the target amount from all banks, it could still opt to partially repay the loan and refinance the rest, the people said. Lai Sun's financing challenges underscore the depth of Hong Kong's years-long property downturn, which has made banks cautious about lending to developers in the city. The company has already spent longer on its deal than property giant New World Development took to complete its recent record loan refinancing, a process that only materialised after months of negotiations and meetings between banks and regulators. 03:39 Shop occupancy recovers in Hong Kong, but vacant stores still visible across the city Shop occupancy recovers in Hong Kong, but vacant stores still visible across the city Lai Sun's original loan was backed by its Cheung Sha Wan Plaza office tower and shopping centre in Kowloon, and the refinancing would be too. The company has proposed an all-in pricing of about 160 basis points over the Hong Kong interbank offered rate for the refinancing, the people said.
Bloomberg
14 hours ago
- Business
- Bloomberg
HK Builder Lai Sun Seeks More Bank Support for Loan Refinancing
Hong Kong developer Lai Sun Development Co. has been working to win banks' backing for a HK$3.5 billion ($446 million) loan refinancing deal, but after about six months of talks, nearly half the lenders still aren't on board, according to people familiar with the matter. The property firm — controlled by local tycoon Peter Lam — has secured commitments from nine out of the original 19 lenders for the five-year refinancing, said the people, who declined to be identified discussing private matters. The existing loan matures on Oct. 5, according to Bloomberg-compiled data, adding urgency to Lai Sun's efforts.
