Local Community Expert shares money-saving tips after Fed cuts interest rates


September 19, 2024
By Joe Gorchow

MIAMI – One day after the Federal Reserve lowered interest rates, CBS News Miami is exploring how the move can help you save money on loans, credit cards and mortgages.

Miami investment banker Jim Cassel explained how to cash in and save on the expenses weighing you down.

“It pays to refinance and chase it down, which is what people have done,” Cassel said.

By “it,” he means the rate that affects what is paid for loans. Cassel said he sees Wednesday’s decision as an opportunity to adjust student loans, credit card debt and mortgage rates.

“Sometimes, even doing it with the same lender, you can save points, other expenses, legal fees and things,” Cassel said. “Pick up the phone and call a lender and negotiate a lower rate.”

People were interviewed about the rate change after it was announced.

Before the move by the Fed, residents in Miami also shared their borrowing experiences.

“Buying a house is kind of impossible right now,” Brickell resident Fabianny Crespo said. She hopes to one day trade in the apartment life and walk toward Biscayne Bay for a life living in a house with a fence.

“When I came to Miami, a regular salary was enough to cover the basics,” Crespo said. “Now you have to struggle with, even with a $100,000 salary.”

Crespo and countless others like her hope a big move could come soon.

“It’s extremely hard,” said a Miami resident who goes by Cyntrina. “It’s very difficult.”

Cyntrina said she made a life-changing decision to give up her car and take the bus to save money. However, perhaps the Fed’s decision to lower interest rates might help her situation.

“Deals out there that if you want to move from one credit card to another,” Cassel said. “Many times not have to pay interest, get a hiatus period, or a lower interest rate.”

Besides dealing with debt, Cassel said homeowners should consider locking in a lower mortgage rate to save thousands.

“Personally, I did it three times many years ago,” Cassel said. “As we were chasing rates down, my rate ended up at 3%.”

Cassel said that can mean savings of thousands of dollars a year for homeowners. It can also be savings on car loans.

And with any big purchase, for a car or a home, Cassel advises to look beyond the rate and at your budget.

“I’m not prepared for that,” Crespo said about buying a home. “I’m just trying to increase my salary however I can.”

Cassel advises creating an Excel spreadsheet to see if you can afford a significant purchase like a home or car before making a quick decision. And if you’re unsure, he said to visit a bank or a qualified lender to help you understand your price range.

 

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Expect ‘B’ Assets to Come to Market First as Dealflow Waits to Pick Up

September 6, 2024
By Demitri Diakantonis

There’s the annual summer deal lull, then there’s the flat cycle as dealmakers wait for interest rates to pick up and for the results of the November elections. Still though, there’s nothing positive about the latest numbers, as August deal volume was the worst in three years, according to data supplied by LSEG. Here’s our monthly deal analysis.

There were just 44 mid-market deals in August, the lowest monthly tally year to date and worst since August 2021. Deal value came in at around $19 billion, the second lowest total this year after February’s $16.4 billion output.

Investors are saying deal activity will pick up, eventually. But when that happens, don’t expect the winners to come out of the gate right away, as sponsors are desperate to return liquidity to their LPs, while waiting to get top value for their most prized assets.

“Most of what I think will come out from a lot of sponsors in the next three to nine months are what I call the B-assets,” says Oaktree Capital Managing Director Matt Wilson. “These are not top-tier portfolio companies, but assets that need to be sold to extract whatever returns sponsors can get so they can return capital and raise the next fund. These are probably the most price sensitive assets to interest rates, hence the reason they haven’t had a bid over the last 18-24 months.

“Right now, for a lot of sponsors, it’s about ‘We haven’t sold much in the last two years and we have to return capital to retain our clients and raise the next fund. Let’s try to sell our second-tier assets, get what we can for them so we can return the capital, and keep our real gems, the assets we will make the most money on in 2025 when we have more clarity on rates,” he adds.

Looking at specific sectors, the top two industry staples-technology is down
significantly, while healthcare is still down slightly year-over-year. In other sectors, real estate, consumer products and services are down. On the other end of the spectrum, consumer staples and industrials are on the rise.
Other notable deals that closed last month include:

  • Quest Diagnostics‘ (NYSE: DGX) $987 million deal for laboratory test company LifeLabs
  • Bank of Nova Scotia’s (NYSE: BNS) minority investment in regional bank KeyCorp (NYSE: KEY)
  • Gallatin Point Capital’s minority investment in commercial bank Israel Discount Bank of New York

In the league tables, JP Morgan (NYSE: JPM), Goldman Sachs (NYSE: GS) and Morgan Stanley hold the top three spots in terms of number of deals (34, 29 and 22, respectively) and deal volume (about $16.4 billion, $16.2 billion and $10.6 billion, respectively). A couple of other banks made big jumps into the top 10. Wells Fargo (NYSE: WFC) went from 22nd to eighth place and Moelis (NYSE: MC) went from 18th to ninth place.

“I believe we will see an uptick in mid-market M&A during the last four months of the year,” says James Cassel, co-founder of Miami-based investment bank Cassel Salpeter & Co. “There is a robust pipeline of deals that were preparing to go to market as well as pent up demand on the buy side for companies and PE firms to deploy capital.”

 

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1H 2024 Florida Sponsor Report

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