1. Assisting an owner of a successful funeral home, owned for 25 years, to expand thru acquisition financing for the
purchase of five additional funeral homes.
2. Finding equipment financing for a two year old used car rental business which wants to expand from 24 cars to 150
cars over the next few years.
3. Finding a commercial land loan for a 33 acre land holding that borders a major highway on both sides
to bridge the projected move to a developer committment.
4. Introducing an Atlanta condo and apartment developer to a funding source interested in being primary
lender on future projects of developer.
5. Seeking long term capital for builder and leasor of rental homes in counties east of Atlanta; client
wants to expand inventory from 50 plus homes to 150 plus homes over two years.
Lenders/Investors Interested in Discussing any of the described Projects - please contact Ellery McLanahan
at 404-228-5355 or email ESMcL@comcast.net
At this time RBS is working on the following projects-
1. Refinancing the $11 million debt on a private school.
2. Providing funding to purchase the $12 million outstanding bonds that hold the first lien on a 300 plus apartment complex
on 33 acres. The bonds are currently in default and the purchaser will effectively own the entire complex.
3. As financial advisor providing funding advise to a group planning to develop a hospital, extended care facility.
4. Arranging the refinancing of an investor owned apartment complex.
5. Assisting a physician lease complex medical operating equipment.
6. Seeking $9mm partner equity to bring a 300 lot site to point of take out by a qualified homebuilder.
7. seeking clients that need tax free bond financing in the southeast,
schools, prisons, health care facilities, $5mm and up.
8. seeking clients that need a well established Wall Street investment banker for funding deals $20mm and up.
Dr Rajeev's Dhawan, Director, Economic Forecasting Center, Robinson College of Business, Georgia State University made
the following forecasts or observations on the national economy at the 2006 Databank Real Estate Symposium, held at the Atlanta
History Center, Thursday, January 5, 2006-
1. The national economy was superb in 2005.
2. 2006 is off to a good start and will end good.
3. watch out for 2007.
4. we have a disfunctional manufacturing market in the U.S.
5. the trade deficit is a conumdrum.
6. capital inflow is the flip side of the trade deficit.
7. the trade deficit increases capital flows into the U.S. and this brings down the 10 year bond rate.
8. short term, long term interest rates will rise.
9. the time to rent property is upon us.
10.job growth averaged 180,000 per month in 2005, should average 130,000 per month in 2006.
11. expect one more rate hike by the Fed in January, 2006
12. after that sit back, wait and watch the data.
13. 10 year rates should be at 5.2% at end of 2006.
14. short terms rates should be 4.75% at end of 2006.
15. lower energy prices will indicate weaker world economy.
16. $1.75-2.00 gas prices indicate good world economy,
prices above this level will cause the fed to counter.
17. predict $2.00 gas prices in 2006.
18. gold and google, question which one will hit $600 first.
19. China and electronics going very strong.
20. California job growth is a bellweather for national economy.
21. Expect flat yield curve for six months; don't worry about inverted yield curve.
22. New Fed Chairman will wait till June, then if economy is too strong watch for hikes.
23. Expect China to add capacity at a 40% rate in 2006, China emphasizing quantity over prices.
24. watch consumer by watching minimum payments on credit cards, if at 3% this is good, if it goes to 13-15%, not good.
And the following observations on the Atlanta Economy
1. 2005 economy was mixed in Atlanta
2. local economy added 30-40,000 jobs in 2005 versus 100,000 jobs in 1994.
3. office builders are betting on the addition of 150,000 additonal new jobs locally with present supply.
4. local economy added no jobs in 2004.
5. Delta and other large corporations are at flat to negative job growth.
6. $1B cut back in sales by Delta or others equals 15,000 jobs lost.
7. Delta has total revenues of $15B, a fuel cost of $4B, payroll costs of $6B. fuel costs not coming down. more cuts
are coming. both the planes and the work force are aging.
8. Delta needs to grow internationally; only 7% of flights from Hartsfield-Jackson are international versus 25% from
LAX, 45% from JFK. Boeing/Airbus are booked up on order backlog (450 orders booked now). Airtran has new planes coming as
does Jet Blue. Delta orders not in the mix.
9. Only Tourism doing great in the Atlanta market, but tourism produces low paying jobs.
At this time the Fed has jacked up short term rates through regular increases in the fed funds
rate. Consensus thinking is that one more rate hike will be enough to finish this tightening policy on the part of the Fed.
In contrast to short rates, long term rates as represented by the 30 year T-Bond yield have actually declined slightly over
the past year.
The new year opens with corporate 1-10 year high quality loans averaging 4.97% (5.42% for
medium quality), and longer term corporate high quality loans 10 years and out at 5.62% (5.93% for medium quality). High yield
corporate rates are averaging 8.11% at year end 2005.
At this time an inversion in rates has occurred in the Treasury markets with ten year treasury
rates actually below two year rates by a very small margin (4.393% to 4.408%). Economists wonder if this forecasts a potential
downturn or recession.
Leveraged loans (little known and little publicized) proved to be exceptionally popular with
Wall Street in 2005. These loans which are issued by junk rated companies sit senior to bonds in a company's capital structure
and would recover virtually all their value in case of default. The loans are popular with lenders as well because coupons
reset periodically to the benchmark interest rate - a bonus in a rising rate environment. There were $500 billion leveraged
loans issued in 2005, far more than the $95 billion issuance of junk bonds. (figures from Loan Pricing Corp and the Wall Street
Journal).
Announcement
We will bring comments on the credit markets to your attention in this space. We will
also advise readers on a timely basis of current funding projects in which RBS is engaged.
