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Trlpc mizuhos rbs portfolio purchase tests loan relationships


´╗┐Mizuho Bank's purchase of Royal Bank of Scotland's US and Canadian loan portfolio in a deal worth $3 billion is causing a stir with banks and blue-chip borrowers in the US investment-grade loan market. US companies are adjusting to the Japanese bank's push for a bigger role in North America, and second tier banks are poised to snap up ancillary business in areas where RBS has traditionally been strong. As part of the asset purchase agreement, Mizuho is expected to hire roughly 200 employees from RBS as early as Tuesday in areas such as capital markets, which includes loan and bond specialists. The hiring is aimed at boosting Mizuho's profile in the US, where RBS was seen as having a deeper franchise. Mizuho and RBS declined to comment. Dow Chemical could not immediately be reached. As Mizuho, Japan's second-largest lender by assets, builds and deepens new and existing relationships in the US, banks and companies are adjusting as lending syndicates reshuffle and changing expectations about what to expect in terms of relationship lending and accessing secondary business, known as cross-sell."Every bank that exits the market creates opportunities for its competitors," a banker said. DOW'S DILEMMA In early March, less than a week after the Mizuho's purchase was announced, specialty chemical manufacturer Dow Chemical Co asked lenders to refinance and extend maturities on a $5 billion, five-year revolving credit that the company signed in 2011.

Citigroup and HSBC Bank were leading the deal with commitments of $328 million, each. Mizuho and RBS had both joined with commitments of $250 million each. Mizuho's asset purchase suggested that Mizuho would absorb RBS's loan commitment, which would have doubled its exposure to $500 million, significantly higher than Mizuho's existing level and put the bank in a dominant position in the syndicate with a larger commitment than either lead bank."From a theoretical standpoint, I don't know whether a bank or a company would be comfortable with a $500 million exposure right off the bat," another banking source said. Mizuho had also absorbed a bilateral loan from RBS to Dow Chemical which further increased its exposure to the chemical firm, sources said. The level of exposure in syndicated loans is significant as it dictates the hierarchy of relationships between borrowers and their banks and determines the amount of ancillary business, such as derivatives, cash management and bond and equity issuances which banks depend on to subsidise low-priced revolving credits.

"Companies are strict about keeping the pecking order in their revolvers," a second banker said. "It goes back to how these companies pay the banks back with ancillary business."In the case of Dow Chemical however, Mizuho stayed at a lower level with a commitment of $240 million, rather than increasing its exposure to $500 million. Other banks in the syndicate offered to increase their commitments to Dow Chemical in a bid to win the ancillary business that used to be offered in areas that RBS was strong, including European cash management and capital markets, sources said. Dow Chemical's management liked that option, which allowed it to preserve its existing relationship hierarchy and even invite new banks including Credit Agricole and Riyad Bank to its core group. Both of the lead banks and a handful of other lenders absorbed RBS's exposure, which allowed them to increase their commitments and thus their relevance to the company.

Dow Chemical's refinancing was one of the first deals to launch after Mizuho's purchase of RBS assets. It was also one of the first times that a major company has had to assess whether to boost its relationship with a bank in its group or reassign the exposure across its bank group, sources said."It's all about relationship," the first banker said. "And relationship means cross-sell."MIZUHO'S PUSH Mizuho said on February 26 that it would buy RBS's $36.5 billion of loan commitments, which included future pledges as well as $3.2 billion of loans that had already been extended. The deal is likely to close around October 2015. Mizuho's purchase follows an aggressive strategy of expansion by Japanese lenders in the US. Highly liquid Japanese banks have been actively buying assets and making loans overseas to compensate for a weak domestic market. Mizuho will not double its commitments on every loan that RBS has made as not every client may be comfortable promoting Mizuho to a lead role and giving the bank RBS' ancillary business, sources said. Dow Chemical's new bank group includes leads Citigroup and HSBC at $320 million each and Bank of America Merrill Lynch, Barclays, BNP Paribas, Deutsche Bank, JP Morgan, Mizuho, Sumitomo Mitsui and MUFG with $240 million each. BBVA, Credit Agricole, Goldman Sachs and ING Bank and Morgan Stanley, RBC, Santander, Societe Generale and Standard Chartered are also lending $160 million each. Bangkok Bank, Bayerische Landesbank, Intesa SanPaolo, Riyad Bank, Bank of Nova Scotia and Wells Fargo have committed $125 million each, Bank of New York Mellon and Northern Trust are providing $75 million each and Fifth Third Bank and Itau Banco are lending $50 million each.

Your money want to stay together dont mess with the hair budget


´╗┐Here's a little marital tip: When financial experts say couples should compromise on absolutely everything, there are times when you just need to split hairs. For instance, just try to tell your spouse how much he or she should spend on getting their hair done. Guaranteed nuclear war. I asked my social media followers about the way couples should handle the significant costs of getting one's hair done, and the reaction was fiery. A sampler: "There are some things you don't share with your spouse, and hair cost is one of them.""It costs to look this good ... and no, hubby doesn't need to know, nor does he ask.""Smart husbands don't mess with the hair-doing budget.""Two things men should only address if they have something good to say: hair and weight."

Haircare, in particular, seems to be an intensely personal subject for couples. Throw money concerns into the mix, and it can lead to the financial equivalent of a really bad hair day. Indeed, financial arguments are by far the No. 1 one predictor of divorce, according to research by Sonya Britt, a professor at Kansas State University. There is no doubt the costs of haircare can add up, and quickly. U.S. spending on hair services in 2014 amounted to a record $46 billion, estimates Parsippany, New Jersey-based consulting firm Kline & Co. The average salon client drops $67.17 per visit for hair services, according to American Salon's Green Book industry report. That's a repeated cost, of course, with men going to a stylist 11.2 times a year on average, and women dropping in 12.9 times annually."As a woman you grow up feeling like expensive hair treatments are mandatory, almost like you're being shamed into it," says Dr. Phoenyx Austin, a fitness expert in Washington and author of "If You Love It, It Will Grow" and the children's book "Love Your Hair."

"You don't want someone telling you you're spending too much money. It's a very touchy subject."That said, Austin says the final tab can easily get "out of hand," when you are combining pricey appointments with expensive take-home products. She knows of women who spend up to $1,500 a month on their hair. ELABORATE PROCEDURES

Costs can disproportionately affect minority communities, where haircare procedures tend to be more elaborate. The average cost of getting extensions or weaves, according to the Green Book: A whopping $487.25 every time, up $137.29 in a single year. Austin, who is African-American, went for a more natural look years ago, which saves a ton of money on processes like chemical straightening. But if times are tight and there is room for your family's salon budget to be cut back, she advises that you look in the mirror first."The worst thing is to come at your spouse complaining about a salon bill, when you're shelling out lots of money on other stuff," she says."Make sure to frame the discussion that any cutbacks will go into family savings, or to your kids' college. That's a good way to massage it into the conversation."Samantha McGarry once went into battle on the subject, and the skirmish was brief and decisive."At one point, my husband said something about the cost of getting my hair done," says the 47-year-old public relations executive from Framingham, Massachusetts. "So we had a little conversation, and now he knows to focus on other areas."If times got really tough, McGarry would find room to trim spending and try more do-it-yourself coloring jobs. Truth be told, McGarry doesn't spend crazy amounts on her hair: $120 every now and then on a cut-and-color. She certainly does not want that budget shorn."It's about feeling beautiful, it's about having 'Me Time,' it's about all of that," McGarry says. "Spouses should probably steer clear in order to keep the peace."