Another Potential Increase in Economically Bad Private Sector Debt

Another good example to report on how excess Federal Reserves on bank balance sheets will be used in the coming years. Case in point, this morning’s announcement about Dish’s offer to buy Sprint: http://on.wsj.com/114IFpM via @WSJ. Both of these companies, as reported on their 2012 balance sheets, have combined long term debt of around $36B and about $9.7B in cash. See these links to verify:

Sprint: http://www.marketwatch.com/investing/stock/DISH/financials/balance-sheet

Dish: http://www.marketwatch.com/investing/stock/S/financials/balance-sheet

Dish is offering $9B in cash plus stock that is altogether valued at $25.5B for Sprint. That $9B will probably be financed by debt (bank loans) and will add even more debt to a combined Sprint/Dish balance sheet. I doubt that there is even a small chance of not getting the green light from the SEC because there is $9B+ in cash between the two companies that can be leveraged by the banks and hedge funds thanks to fresh monthly QE injections by the Fed.

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This entry was posted in Economics, Fed, Federal Reserve, private sector debt, QE, quantative easing. Bookmark the permalink.

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