CLOs

WeWork this week went public, ending a two-year saga, reports Bloomberg (21 October, McBride). When it last tried to go public in 2019, WeWork was a giant in real estate and technology. At that time, it was one of the most richly valued startups in the world and the largest tenant in its hometown of New York City. But the prospectus for WeWork's initial public offering (IPO) offered a glimpse into the inner workings of the company and exposed a series of personal and professional conflicts for cofounder Adam Neumann. Within months, Neumann had lost his job, WeWork almost ran out of cash, and a major shareholder — SoftBank — had to agree to bail the firm out. This time around, WeWork's IPO was a much smoother process. The company now trades on the New York Stock Exchange under the ticker symbol WE, and the stock climbed on Thursday.

From "WeWork Goes Public, Finding a Warmer Reception This Time"
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McDonald's this week announced it has achieved pay equality for company employees in underrepresented groups, reports Restaurant Business (19 October, Maze). The Chicago-based fast food giant confirmed that its employees who are part of historically underrepresented groups are now paid the same as their white counterparts for equal work. Additionally, McDonald's has achieved equal pay by gender at its US company eateries and is on track to do the same with its corporate workforce by 2022. Currently, women are paid 99.16 percent of the pay men receive for comparable work, and the company expects to erase the remaining gap during next year's pay cycle. McDonald's has been working for the past decade to achieve pay equity among company restaurant and corporate employees.

From "McDonald's Says It Has Largely Achieved Pay Equality"
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A criminal organization believed to have built the software that shut down Colonial Pipeline has set up a fake company to recruit potential employees, reports the Wall Street Journal (21 October, McMillan). According to researchers at Recorded Future and Microsoft, the fake company is using the name Bastion Secure. The company has a professional-looking website and purports to sell cybersecurity services, but the site's operator is a well-known hacking group called Fin7, said Recorded Future and Microsoft. Fin7 is believed to be responsible for hacking hundreds of businesses and stealing more than 20 million customer records. The attempt to impersonate a legitimate company for recruiting purposes represents a new development by purveyors of ransomware. With hundreds of millions of dollars in illegal earnings, ransomware operators are increasingly operating like criminal startups with professionalized support staff, software development, cloud-computing services, and media relations.

From "Ransomware Gang Masquerades as Real Company to Recruit Tech Talent"
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The United Kingdom has reached a free trade deal with New Zealand, according to BBC News (20 October). London hopes the New Zealand trade deal will set the stage for the United Kingdom to join a trade club with countries like Canada and Japan. By itself, the New Zealand deal is unlikely to boost UK growth, according to the government's own estimates. But UK Prime Minister Boris Johnson said the deal will cut costs for exporters and open up New Zealand's job market to UK professionals. As part of the deal, tariffs will be removed on UK goods like clothing, ships, and bulldozers, as well as New Zealand goods like wine, honey, and kiwi fruits.

From "United Kingdom Reaches Free Trade Deal with New Zealand"
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Mastercard has partnered with the UK fintech firm Demica to offer supply chain finance to its business clients, reports the Financial Times (21 October, Smith, Franklin), showing the continued strength of demand for the lending product even after the collapse of Greensill Capital. The credit card giant on Thursday confirmed it is launching a new supply chain finance product with Demica, based on its technology platform that banks use to track the invoices underpinning this form of financing. Craig Vosburg, Mastercard's chief product officer, declined to offer revenue targets for the program, but described the potential market for the product as "enormous" and predicted it would be "a multi-decade growth opportunity." Supply chain finance is a process in which financial institutions pay the bills a company owes to its suppliers, who accept less than the full amount in return for quicker payment. While it is an established financial product, the collapse of supply chain finance specialist Greensill Capital earlier this year drew attention to the ways in which it can be used to flatter and distort corporate balance sheets.

From "Mastercard Bets on Supply Chain Finance Despite Greensill Collapse"
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Facebook's oversight board rebuked the social media giant for failing to be forthcoming about how it exempts high-profile from its rules, according to the Wall Street Journal (21 October, Schechner). In a report released Thursday, the oversight board also said it is drafting recommendations for how to overhaul the system. Thursday's report said Facebook had repeatedly failed to turn over information or provided incomplete information about how it treats content from a large swath of high-profile users. “The fact that Facebook provided such an ambiguous, undetailed response to a call for greater transparency is not acceptable,” the board wrote in its report. A Facebook spokesman thanked the oversight board for its "ongoing work and for issuing their transparency report." The spokesman went on to say Facebook "will strive to be clearer in our explanations to them going forward."

From "Facebook Is Rebuked by Oversight Board Over Transparency on Treatment of Prominent Users"
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Dozens of Netflix employees staged a walkout at a company office building in Los Angeles on Wednesday, with the New York Times (21 October, Koblin, Sperling) reporting the move was one of the most visible signs yet of worker unrest at the streaming service. The workers walked out to protest a recent Dave Chappelle stand-up special. Critics inside and outside the company have contended that Chappelle's show, "The Closer," promotes bigotry against transgender people. The protest put Netflix at the center of a broader cultural debate about transphobia, free speech, and employee activism. Amid the public relations crisis, Netflix executives have adopted a conciliatory tone while remaining supportive of Chappelle. Ted Sarandos, the streaming giant's co-CEO, said this week that he had "screwed up" communication with employees after the outcry.

From "Netflix Employees Walk Out to Protest Dave Chappelle's Special"
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An Amazon employee group formed by warehouse workers in New York’s Staten Island announced its goal to vote on unionization, reports the Wall Street Journal (21 October, Herrera, Calfas), becoming the latest labor-organizing effort from workers at one of the nation's largest employers. The independent group of Amazon employees, called the Amazon Labor Union, plans to file with the US National Labor Relations Board (NLRB) on 25 October for an election. A statement from the Amazon Labor Union said the organizing involves more than 2,000 workers across four Amazon facilities in Staten Island. “Workers are demanding Amazon to stop their union busting practices and allow workers to use their rights to organize towards collective bargaining without interference,” the group said in a statement. It is seeking higher wages, safer working conditions, and more paid time off, among other goals.

From "Amazon Employee Group Seeks Worker Vote on Unionization"
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The German bus service FlixBus' parent company, FlixMobility, on Thursday confirmed it will acquire Greyhound Lines, reports Deutsche Welle (21 October). The purchase of the iconic US bus company expands FlixMobility's base in the United States. FlixMobility will pay US$172 million in cash for Greyhound, with a portion of the money earmarked to pay down Greyhound's liabilities and leases. Greyhound was founded in 1914. It is North America's largest motor coach operator, serving 2,400 locations across the continent. Greyhound ferries almost 16 million passengers annually.

From "Germany's Flixbus Acquires US Greyhound Bus Company"
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Reuters (20 October, Roumeliotis, McLymore) sources are reporting that PayPal has offered to purchase the digital pinboard site Pinterest for US$45 billion. Such a combination could herald more financial technology and social media tie-ups in the ecommerce world. It would certainly rank as the largest purchase of a social media company, topping Microsoft's US$26.2 billion acquisition of LinkedIn five years ago. The deal negotiations come as online shoppers increasingly purchase merchandise they see on social media, often following "influencers" on such platforms as Instagram and TikTok. Acquiring Pinterest would enable PayPal to capture more of that ecommerce growth, as well as diversify its income via advertising revenue.

From "PayPal in US$45 Billion Bid for Pinterest"
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The UK government has opened a long-awaited consultation into the "buy now, pay later" (BNPL) market, reports the Financial Times (21 October, Venkataramakrishnan). London's review, which is due to close next January, comes 10 months after a report commissioned by the UK Financial Conduct Authority (FCA) called for "very urgent" intervention on the matter. Consumer credit regulations cover some BNPL providers, but market leaders like Klarna, Clearpay, and PayPal have so far avoided regulatory scrutiny due to an exemption designed for short-term invoice deferral. The government consultation will look at a range of issues, including assessing evidence of "consumer detriment," the way providers assess creditworthiness of clients, and how any increased regulation would impact smaller merchants.

From "United Kingdom Launches Review of 'Buy Now, Pay Later' Market"
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China Evergrande on Friday made an US$83.5 million interest payment to bondholders, reports the New York Times (22 October, Stevenson). In doing so, the troubled property giant bought itself a little more time as it draws closer to default. Friday's interest payment was initially reported by Securities Times, an official newspaper backed by People's Daily, the Communist Party's newspaper. Securities Times did not offer further details on Evergrande's payment. The company made the interest payment with just one day left on a 30-day grace period to avoid a default. Evergrande shook global financial markets a month ago when it skipped a payment to foreign bondholders. Burdened by more than US$300 billion in debt, the property developer has been trying to sell off parts of its vast empire in order to raise cash and appease creditors. Until the report from Securities Times on Friday, many market watchers assumed Evergrande would miss the bond payment, effectively triggering a default. Evergrande's financial crisis has tested the resolve of Chinese officials who were once quick to intervene on behalf of struggling corporate giants. Beijing has vowed to clean up Chinese companies' mountain of debt and end the property sector's binge-borrowing habits. “Anything that smacks of ‘saving Evergrande’ risks creating moral hazard that runs against the anti-leverage campaign,” said Arthur Kroeber, head of research at the economic research firm Gavekal Dragonomics.

From "China Evergrande Makes Payment Before Deadline, Official Media Says"
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Ecommerce websites have contributed to rising inflation, reports the Financial Times (20 October, Manayiti, Edgecliffe-Johnson), reversing a yearslong trend and heralding the prospect of higher prices and fewer discounts during the holiday season. Amazon and other online retailers have kept prices down for years, challenging their brick-and-mortar rivals to follow suit. But that trend has reversed over the past 15 months, according to a report published Wednesday by Adobe. Prices on US retail websites were up 3.3 percent year-on-year in September, in contrast to the two through five percent declines seen at this point in most previous years. Meanwhile, prices are expected to continue rising throughout the holiday shopping season.

From "Online Retailers Fuel Inflation in Reversal of Yearslong Trend"
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The beleaguered Chinese real estate developer Evergrande has confirmed that a potential sale of its property services unit has collapsed, according to the Financial Times (20 October, Hale). The breakdown of the sale enhances pressure on Evergrande, which has just days to avoid an official default on its debt. The company had hoped to sell 51 percent of Evergrande Property Services Group to fellow developer Hopson Development Holdings for US$2.6 billion, but the deal fell apart last week. Evergrande is the world's most indebted property developer and has more than US$300 billion in liabilities. Its escalating liquidity crisis has prompted global concern over the deteriorating health of China's vast real estate sector.

From "Evergrande's Plan to Sell Property Services Division Collapses"
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The United States blasted China's trade policy, reports Bloomberg (20 October, Baschuk), accusing its economic rival of failing to play by the rules of international commerce. David Bisbee, the chargé d’affaires at the US mission in Geneva, said nations broadly expected Beijing to dismantle its existing trade policies and practices when it joined the World Trade Organization (WTO) 20 years ago. Some of China's existing trade policies and practices were in violation of the WTO's rulebook. But "those expectations have not been realized," Bisbee said, adding that "it appears that China has no inclination to change." Bisbee accused China of using "the imprimatur of WTO membership to become the WTO’s largest trader, while doubling down on its state-led, non-market approach to trade, to the detriment of workers and businesses in the United States and other countries."

From "Washington Blasts China's Harmful Industrial Policies in WTO Review"
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The Financial Times (20 October, Wilson), citing internal company documents and interviews with former executives, is reporting that TotalEnergies was aware of the link between fossil fuels and increased global temperatures 50 years ago. Even so, the documents and executives indicate, Total worked with other oil majors to play down the risks for at least 30 years. News of Total's activities broke Wednesday in an article by three historians in the peer-reviewed Global Environmental Change journal. The historians' research indicates Total worked to cast doubt over emerging climate science in the 1970s, 1980s, and 1990s. All the while, the company was pushing back against emissions reductions and climate-related taxes. The study echoes similar allegations made against other oil and gas majors in recent years, including ExxonMobil and Royal Dutch Shell.

From "Total Accused of Campaign to Play Down Climate Risk From Fossil Fuels"
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People familiar with the matter told the Wall Street Journal (20 October, Matthews, Glazer) that Exxon Mobil's newly-reorganized board of directors is debating whether to continue with several major oil and gas projects. According to the sources, the company is reconsidering its investment strategy in a fast-changing energy landscape. Members of the board — including three directors successfully nominated by an activist investor in May, as well as two other new members — have expressed concerns about certain projects, including a US$30 billion liquefied natural gas development in Mozambique and another multibillion-dollar gas project in Vietnam. Meanwhile, investors are pressuring the oil giant to restrain its fossil fuel investment and limit its carbon emissions. Accordingly, Exxon's board is weighing the fate of future projects as it reviews the company's five-year spending plan.

From "Exxon Debates Abandoning Some of Its Biggest Oil and Gas Projects"
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When news broke of Facebook's plan to change its corporate name, a flurry of speculation on the rebrand followed, reports Bloomberg (20 October, Savov). The Verge, which first broke the news on Tuesday, reported the new name might have something to do with "Horizon" after a virtual reality platform the social media giant is developing. That would be a nod to CEO Mark Zuckerberg's ambition for Facebook to eventually be known for its metaverse — referring to the idea that the next evolution in online connectivity will be people living, working, and interacting in an immersive virtual world. Meanwhile, Samidh Chakrabarti, the company’s former civic integrity chief, has joined others in suggesting the new name might be "Meta." Facebook plans to announce the name change by 28 October.

From "Meta? Horizon? Facebook Renaming Report Sparks Speculation"
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The Associated Press (19 October) has learned that Southwest Airlines will allow unvaccinated employees to keep working past early December rather than putting them on unpaid leave if they apply for an exemption on religious or medical grounds. Federal contractors — including major US airlines – face a deadline of 8 December to require employees to get vaccinated against COVID-19. Southwest spokesperson Brandy King stated on Monday that employees must submit proof that they got the shots, or file a request for an exemption from vaccination, by 24 November. Employees whose requests have not been processed or approved by 8 December will be permitted to keep working, she added. The airline backtracked from an earlier position that staffers who had not been vaccinated or received an exemption would be placed on unpaid leave.

From "Southwest Airlines Will Keep Workers Who Apply for Vaccination Exemptions on the Job"
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The Wall Street Journal (20 October, Vielkind, Mai-Duc, Kamp) reports New York City is requiring its entire municipal workforce to get vaccinated against COVID-19, eliminating the option for testing. Mayor Bill de Blasio announced an order Wednesday that compels 46,000 city workers to get their first shot by 29 October or potentially lose their jobs. In total, the rule applies to 160,500 employees, about 71 percent of whom are already partially or fully vaccinated. Noncompliant employees will be placed on unpaid leave. City Hall officials plan to negotiate in the coming days with labor unions to discuss what procedures would follow that step.

From "New York City Issues COVID-19 Vaccine Mandate for All Public Employees"
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