Vista Capital Company Closes $28 Million of Financing for Three Hotels

MALIBU, Calif., June 1, 2016 /PRNewswire/ –Vista Capital Company announced that it recently structured $28 million of financing for three hotels, including a Crowne Plaza in Indianapolis, a Holiday Inn Express in Louisville, and a Homewood Suites in Chicago. The three deals were funded by three different capital sources, including a life insurance company, a regional bank, and a CMBS lender.


Given the constantly shifting hospitality capital markets, Vista utilized its diversified base of financing sources, allocating capital to the most advantageous sources in real-time, said Zak Selbert, the founding principal at Vista Capital. Data analytics and intuition were central to each financing, since lender selection was required under extremely volatile market conditions.

Vista negotiated highly favorable, fixed-rate financing for all three loans, with pricing ranging from 3.5% to 5%. The conduit and the life insurance company loans both feature 10-year terms, and will be used, in part, to fund large renovation projects. The seven-year bank loan was utilized to take advantage of incredibly low rates currently available for hotels. Each financing was awarded to their respective lender after intense competitive bidding, affirming Vistas specialization in financing hotels under all market dynamics.

About Vista Capital Company

Vista Capital Company is a Los Angeles-based, real estate investment banking firm that specializes in arranging financing for commercial property nationwide. As a real estate capital intermediary, Vista procures tailored capital solutions for their clients through a comprehensive platform of services. Vista ensures that its clients are capable of seizing opportune advantage based upon accurate and smartly synthesized real-time intelligence of available capital.

Zak Selbert
Phone: 310.285.3803

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SOURCE Vista Capital Company

May 24, 2016: What’s happening at tonight’s Assembly meeting?

When the Assembly meets tonight (5-24-16), it will consider a proposal to subsidize utility costs for low-income homeowners. The ordinance is sponsored by Assemblymen Tristan Guevin and Bob Potrzuski.

Here is the Assembly Agenda for 5/24/16

Guevin pulled the ordinance from two previous meeting agendas to make time for revisions. Namely, this version widens the pool of who is eligible to qualify.

Potrzuski told KCAW he sponsored to ordinance to help Sitka’s working poor, by having part of their utility bill paid for by the city. Seems like two people making $20 an hour is what it takes in a household to really be able to make it here in Sitka. And I’m not sure all those jobs are out there. So this is to fill the gap, between folks who are really impoverished and can get a lot of assistance and folks who aren’t, Potrzuski said.

See a draft of the ordinance here: Ord 2016-15.

Under their proposed program, the city would pay some of the monthly utility bill on behalf of eligible homeowners. Subsidization may be revoked any time. Homeowners qualify if they are receiving or seeking assistance from the state or  a handful of programs run by local agencies, such as Sitka Tribe of Alaska and SEARHC. Families with children who qualify for the School District’s Free-or-Reduced Lunch Program would qualify too.

If approved, the city would hire an outside organization to run the program. Potrzuski estimated it would cost $200,000 a year and added, “it might be a tough sell to find money.” He said, I’m as curious as you are as to folks are going to respond in a year when budgets are tight to essentially municipal assistance.

The Assembly will also vote to free up funds to repair the float plane dock and meet in executive session afterwards to discuss a legal matter, affecting the municipality and the Baranof Island Brewing Company loans.

The Sitka Assembly meets at 6 pm tonight in Room 229 at UAS. Raven Radio will join the meeting live in progress after Alaska News Nightly.

Budget 2016: Company tax break extended for small business, ATO multinational crackdown launched

The cost of these tax breaks for business is being partially offset by a crackdown on multinational corporate tax avoidance.

The Australian Taxation Office (ATO) will receive an extra $679 million over the forward estimates to hire an extra 390 staff to form part of a thousand-person team to monitor large firms.

These extra tax officers will also have a tougher anti-profit shifting law to assist them, with the Government announcing a UK-style diverted profits tax, popularly known as the Google tax, to charge companies a higher 40 per cent tax rate on money they seek to shift offshore to low-tax jurisdictions through intra-company loans.

The Treasurer said the corporate tax crackdown should raise an additional $3.9 billion in revenue over the next four years.

CLSA: 15-19% Of China’s Bank Loans Are Bad

By Shuli Ren

Are Chinese banks cheap enough, now that they trade at only 0.8 times book and offer handsome dividends?

Not yet. According to CLSA, about 15-19% of bank loans are non-performing, well above the official statistic of 1.6%.

Part of the big discrepancy comes from how Chinese banks recognize non-performing loans. In the West, commercial banks call a loan non-performing if they are more than 90 days due. In China, a loan past 90-days due is non-performing only when the banks expect a loss. But when the borrowers are state-owned enterprises, technically they have Beijing&’s backing and presumably their loans will be paid in full some day, so it is difficult for bank loan managers to characterize them as &“non-performing&”, said CLSA strategist Francis Cheung.

CLSA derived its 15-19% non-performing loan ratio estimate based on Chinese companies&’ financial statements. For instance, a company&’s loans are classified as non-performing if its operating income is less than interest expenses (in technical terms, EBITDA/interest expense < 1), or if its net debt is larger than 5 years of operating income (a fairly standard treatment, according to Cheung).

While slowly moving, Chinese banks will have to recognize bad debt faster, as they will be moving to Basel III by 2018. After all, China&’s largest banks are also listed in Hong Kong.

And at the current valuation, Chinese banks have not priced in enough bad debt. CLSA estimates that banks on average only recognize 8.5% non-performing loan ratios assuming 12% return-on-equity going onward. In the last quarter, we saw Chinese banks&’ profit margins continued to fall. They are way short.

Year-to-date, China Construction Bank (939.Hong Kong) fell 10.5%, ICBC (1398.Hong Kong) dropped 14.9%, Bank of China (3988.Hong Kong) retreated 12.3%, Agricultural Bank of China (1288.Hong Kong) was down 15.3%. The iShares China Large-Cap ETF (FXI) fell 8.5%, the iShares MSCI China ETF (MCHI) dropped 8.5%, the Deutsche X-Trackers Harvest CSI 300 China A-Shares ETF (ASHR) was down 13.7%.

Goldman, Jefferies Put LendingClub Deals on Hold

Two Wall Street investment banks handling bond sales for LendingClub Corp. have stopped buying the company’s loans after the ouster of CEO Renaud Laplanche, people familiar with the matter said.

The move by Goldman Sachs Group Inc. and Jefferies LLC could delay or jeopardize a number of securitization deals for LendingClub, by most measures the biggest and most successful in a wave of online lenders that have blossomed since the…

3 Stocks That Could Double Your Money

At this point, shares look attractively valued if the growth begins to translate to profitability, but thats a big if. Even after a recent rise in interest rates, the companys loans are more attractive than a credit card, so the demand could continue to climb. Analysts are projecting EPS of $0.27 per share this year and $0.45 in 2017, and if the company meets or exceeds these estimates, it could mean big gains for investors.

Lots of demand, but not a lot of profits
SolarCity (NASDAQ:SCTY) perhaps has the most potential of any stock on this list. Its the leader in residential solar installations — an industry that has less than 1% penetration and growing demand. However, the company is yet to show that it can be profitable. (See a pattern forming here?)

The growth is impressive — during the fourth quarter of 2015, installations grew by 54% year-over-year, and the company expects another 44% growth this year. Since the beginning of 2014, the companys installation rate has grown from 82 megawatts to 272 megawatts. And SolarCitys commercial installations (the grey in the chart below) has picked up significantly in recent quarters.

Additionally, the 30% federal tax credit that helps drive the companys business was extended through 2019 and will exist in a reduced form through 2021.

Now, the company needs to do a good job of showing investors that it can control costs, and eventually turn a profit. It has already managed to decrease its cost per watt by 17% over the past two years, but its sales cost per watt has actually increased from $0.51 to $0.56 during that time period. The company has set a goal to get this down to $0.40, and also to drop its installation costs from $1.92 per watt to $1.52. If it can do both of these, while continuing to meet its growth objectives, the next few years could be good to SolarCity shareholders.

Will handmade goods stay popular?
A popular 2015 IPO, Etsy (NASDAQ:ETSY) has gone cold, down 64% from its day one price, even after a recent rally.

Just like the other two stocks mentioned, Etsy is producing some impressive growth. For 2015, Etsys revenue grew by 39.8%, and EBITDA grew by 34.8%. And, the customer base continues to grow — the company ended 2015 with 15.5% more active sellers and 21.4% more active buyers than the year before.

The company is also confident that the growth will continue for at least several more years. Through 2018, Etsy is projecting a 20%-25% annual revenue growth rate, which even at the low end would translate to 73% higher revenue in three years.

The question is whether that will be enough to produce a profit. For 2015, Etsy produced a net loss of $54 million, or $0.59 per share. Analysts expect that it will be at least 2017 before Etsy turns its first profit, so its a risky bet at this point. And theres always the continuing threat from Amazon.coms venture into the online handmade goods business, which is still in its infancy.

These could double your money
Now, I want to be perfectly clear on one point. Just because I say that these stocks could double doesnt necessarily mean that they will, or even that I think its likely. Rather, these are high-potential stocks that need a lot to go right before investors will be rewarded.

For this reason, its important to remember these are speculative stocks at this point, and shouldnt be bought with money youll be relying on for your retirement, your childs tuition, or anything else. However, if you have some money in your brokerage account that youre willing and able to take a little risk with, these stocks might be worth a closer look.

Questions over Compass’ tax payments

Compass is one of the worlds biggest catering companies, and supplies nearly half of all public hospital meals in New Zealand.

Accounts filed with the Companies Office show its New Zealand arm has been lending the companys British parent millions of dollars.

Those loans increased six-fold over the last four years to $33 million for the year ended September 2015, up from $5.5m in 2012. Royalties and fees quadrupled over that same period, from $805,000 to $3.5m.

Such so-called transfer pricing transactions are all legal.

However, Auckland tax consultant Terry Baucher described the loans as unusual, especially given the interest rate of between 2.9 percent to 3.8 percent was a lot higher than what Compass would pay for borrowing money in the UK and none of the money had been repaid.

Its unusual to see. Its not surprising – intra-company loans go on all the time. But you would think that given low rates of interest available in the UK there was no need for those advances to be made, he said.

RNZ News asked Compass to explain why a multinational that made a global profit of $2.5 billion last year needed to borrow $33m from its New Zealand arm.

In a statement, Compass said there were no loans.

The figure shown in the accounts is a standard cash deposit facility, effectively like a current account, used by Compass to manage its working capital requirements, Compass national development and innovation manager Lauren Scott said.

The accounts filed with the Companies Office describe the transactions as loans. The 2015 accounts state the receivables from related parties arise mainly from loans and are receivable on call.

When this was put to Compass, the company added: They are effectively a cash deposit facility. Compass Group NZ deposits and withdraws cash from this facility on an almost daily basis. It gets the appropriate interest return on it and that interest income is subject to the full rate of NZ corporate income tax.

Compass said it conducted an open and transparent relationship with the Inland Revene.

As a large tax payer with turnover greater than $80 million, Compass NZ is subject to the IRDs Basic Compliance Package, an additional layer of tax compliance for large multinationals. As part of the annual BCP process, Compass NZ is subject to a review of all its income tax affairs, including its international transactions, it said.

Compass New Zealand has not paid a dividend to its British parent in the last four years, but has paid about $1m in fees and services to its Australian arm each year. Fees and royalties to its British parent between 2012 and 2015 have quadruped to $3.5m.

Dividends and royalties were taxed by Inland Revenue (IRD), and loans were not. Compass New Zealand paid $2m in tax last year, just over 1 percent of its revenue of $170 million.

Compass said it paid that amount because its costs were high and its margins low.

Auckland University tax professor Craig Eliffe said intra-company loans, along with fees and royalties paid to parent companies, were all used by multinationals to move profits around.

If theyve got more money than they can use in their New Zealand operations, you would expect it to be repatriated by way of a dividend. So this could be viewed as effectively as a device or mechanism of effectively repatriating the cash without paying a dividend.

Compass said it was required by law to pay fees to its affiliates for any support received from them.

It did not answer questions about whether it had tried to avoid paying tax in this country but said it employed 4000 people and expected to spend $70m with suppliers in New Zealand this year.

Green Party co-leader James Shaw said New Zealand needed follow Australias lead in tightening rules around transactions between multinational subsidiaries.

One of which would be compulsory reporting from multinational companies about how theyre accounting for their transfer pricing because currently in New Zealand they dont have to report on that and so its very very difficult to get a clear picture of whats going on, he said.

Greater resourcing of IRD was also needed so it could better police multinationals operating in New Zealand, he said.

Mr Shaw questioned the value of outsourcing public services to multinational companies, which he said as a rule tried to pay as little tax as possible.

Protests over hospital contract

Meanwhile, Compass has also been in the spotlight in recent weeks after protests about the quality of the food that it has supplied to hospitals in Otago and Southland.

Compass has a 15-year meal supply contract, which has termination clauses based on key performance measures such as nutritional value, taste and presentation.

The company said last week it had the right to remedy any issues raised, and a qualitative survey at Dunedin Hospital had shown three quarters of patients were satisfied with their food.

Southern DHB chief executive Carole Heatly, speaking on Friday, also pointed to the companys patient satisfaction surveys, saying opponents of the contract were not providing the full picture.

Compass prepares much of its food in the North Island and then freights it south.

Why bank stocks are on the nose

But one of Australias biggest institutional investors, JCP Investment Partners, says there could be a significant impact on bank earnings if the fall in commodity prices is sustained. It says the debt exposure needs to be viewed as a percentage of resource company loans to the book value of the banks equity.

In this case, the percentage of those $65.6 billion in loans to the banks $217.8 billion book value is 30 per cent. The percentage of the market value of equity is 18.2 per cent. This means that if a proportion of those loans turn bad, the costs will impact on shareholders and then spill into mortgage loan books.

Housing markets will ultimately have the biggest impact on banks performance in the short-term, although the prospect of more big capital raisings to support higher funding costs looms large.

There is evidence housing prices are cooling. The Australian Financial Review reports inner-city Melbourne apartment prices have fallen as much as 30 per cent.

While the Sydney market remains buoyant, the city recorded a fall in housing prices for the first time in three years in the December quarter, according to Australian Bureau of Statistics figures out in March.

Westpac the winner

Westpac is the pick of the sector. It has been winning market share in mortgage lending and its exposure to New South Wales and Victoria where property markets are booming is an advantage.

Westpac holds the number-two spot with about 23 per cent share of consumer loans and deposits and the second largest branch network, Westpac has now regained momentum with housing credit now growing at 1.3 times system and consumer deposits  are back at 1.4 times system, UBS analyst Jonathan Mott says.

ANZ remains under pressure despite strong momentum in housing lending compared to CBA, which Macquarie analysts say has been shedding market share.

Analysts warn ANZs ability to pay a steady dividend will be challenging as it pulls back from Asia although cost-cuts will help. The uptick in bad debts has also rattled sentiment.

UBS points out it is not the first time in the last 18 months that ANZ has underestimated its bad debt exposure. Such a track record brings to mind the old banking adage – bad debts are like cockroaches, they never come in ones, UBS says.

Newcomers welcome

Macquarie analysts say the sector is now trading at a significant discount to its long-term average and continues to offer solid dividend yield support. This means it could be a good time to get in, but perhaps not so good if you have owned the stock for years.

There are six buys, eight holds and two sells on ANZ, according to Bloomberg. Westpac has nine buys, six holds and one sell, CBA has six buys, eight holds and two sells, and National Australia Bank nine buys, six holds and one sell.

The regional banks have also taken a hit. Bank of Queensland shares have fallen 15 per cent so far this year. Deutsche Bank expects Bank of Queensland to report a 5 per cent fall in first-half cash net profit of $181 million as cost growth offsets revenue growth.

Bendigo and Adelaide Bank shares have fallen  27.8 per cent so far.