December 10, 2023

Winter is Coming

“Winter Is Coming” For Leveraged Companies 

by Tyler Durden

Friday, Dec 08, 2023 – 12:45 PM

Earlier in the year, as regional banks faced a domino effect of failures, Bank of America strategist Michael Hartnett pointed out that every Fed tightening cycle has historically resulted in a crisis.

Given that the Federal Reserve hasn’t allowed a real credit cycle since the early 2000s, prolonged monetary tightening suggests that “winter is coming” for leveraged companies. 

“The whole market and companies have been living in this la la land, this fake world of wealth of quantitative easing where you can borrow at 1% or 2%, you can buy anything, you can make lots of mistakes and you’re not going to get called out,” said Paul Horvath, chief executive officer at investment firm Orchard Global. 

Horvath, speaking at the Milken Institute’s Middle East and Africa Summit in Abu Dhabi this week, was quoted by Bloomberg. He warned: “Winter is coming, and I don’t think people have enough parkas.”

The asset manager head said financial markets are holding up well so far, given the high rates. He noted corporates are levered up due to private equity firms buying up companies with cheap money, adding a global financial crisis might not be in the cards – but expects there will still be stress. 

Bloomberg pointed out there were record levels of dealmaking during the pandemic era of cheap money. This led to a surge in private equity buyouts, backed by leveraged finance and the debt load placed on the target company. A large amount of that debt for junk-rated firms is coming due as large maturity walls approach. 

Also speaking at the event was SLR Capital Partners co-founder Michael Gross, who said there is no easy solution for companies needing to refinance this debt. 

“It’s going to take more than public markets coming back,” Gross said, adding, “It’s going to probably require private equity sponsors to find unique solutions like putting in more equity or finding preferred investors to step into the capital structures.”

Gross said managing portfolio companies with outdated debt structures will also face challenges for private credit funds.

He explained that funds were structured in a world of “perfection” based on an era of low interest rates, but that has all changed. 

A higher for the longer environment with mounting macroeconomic headwinds only means over-leveraged firms are increasingly falling into distressed

The impact of this tightening cycle could be worse than the Great Recession – unless the Fed reverses course. 

Rate traders are already pricing more than 100bps of rate cuts for 2024. 

Meanwhile, Anne Walsh, chief investment officer of Guggenheim Partners Investment Management, said the US economy “hasn’t had a real corporate credit cycle since the early 2000s,” indicating a “purge is about to happen.” 

https://www.zerohedge.com/markets/winter-coming-leveraged-companies

December 6, 2023

PFA Elects New Officers

Polyurethane Foam Association Elects New Officers, Names
Additions To Executive Committee for 2024

Philipe Knaub Takes Reins As President

LOUDON, TN (December 5, 2023)—The Polyurethane Foam Association (PFA) has named its
officers and Executive Committee for 2024. The slate of officers and committee members was
approved by attendees at the General Business Meeting on November 2, 2023 in Toronto.

Officers include:

 Philippe Knaub, FXI, President
 Rob Heller, Future Foam, 1st Vice President
 Cam McLaughlin, Elite Comfort Solutions, 2nd Vice President
 Hamdy Khalil, The Woodbridge Group, Treasurer
 Bill Gollnitz, Immediate Past President.

Additional PFA Executive Committee members include:
 Frank Donato of VPC
 Karl Gust, BASF
 Scott Skolnekovich, Covestro
 Susan Kilpatrick, Evonik
 Rob Einterz, Monument Chemical
 Robert Smith, Wanhua
 Barry Gabelman, Chemfoam.

Knaub takes over the presidency from Chip Holton of NCFI Polyurethanes, who had served in
the position since 2015.

Knaub is Senior Vice President and Chief Technology Officer of FXI, a
position he has held since 2016. He supervises all research and development projects, reporting
to the company’s Chief Executive Officer. He is accountable for all aspects of R&D and product

development, including project portfolio management, discovery, scale ups and
commercialization of new polyurethane foams.

Knaub earned a Ph.D. in Polymer Science from the Institut National des Sciences Appliquées de
Lyon. He holds multiple patents in polyol composition.
“PFA is a vital organization in the flexible polyurethane foam industry,” Knaub said. “I look
forward to working with my colleagues in the industry to further PFA’s programs in advocacy
and education.”

The Polyurethane Foam Association is a trade association founded in 1980 to help educate foam
users, allied industries and other stakeholders. PFA provides facts on environmental, health and
safety issues and technical information on the performance of flexible polyurethane foam (FPF)
in consumer and industrial products. FPF is used as a key comfort component in most
upholstered furniture and mattress products, along with automotive seating, carpet cushion,
packaging, and numerous other applications.

To learn more, visit www.pfa.org.

November 28, 2023

Panama Canal Congestion

Panama Canal Congestion Causes MDI Price Increase in South America

PUdaily | Updated: November 27, 2023

The Panama Canal is Witnessing a Congestion with over 120 Ships Queueing

The Panama Canal Authority said on November 13 that approximately 126 ships were awaiting passage at the canal entrance, with potential waiting times of up to 12 days. To address the backlog of vessels, the authority holds auctions for those wishing to jump to the front of the line. In the latest auction, a Japanese energy group paid nearly USD 4 million to secure the crossing for its liquefied petroleum gas tanker, setting a new record and significantly increasing the transportation cost of transit goods.

El Niño Phenomenon Causes Congestion in the Panama Canal

Since the beginning of this year, the drought caused by the El Niño phenomenon has been affecting the water reservoir system of the Panama Canal, leading to a reduced supply of freshwater necessary for the operation of the locks. As a result, the Panama Canal Authority has repeatedly slashed the number of daily transiting vessels. Additionally, the authority has also lowered the permissible draft of ships, forcing vessels passing through the canal locks to reduce their weight or cargo load. This drove up the delivery time and logistics costs. In August, the canal experienced the first wave of congestion, with 200 vessels were floating at both ends of the dried up canal. Recently, the congestion issue has become more severe, significantly impacting global trade.

Panama Canal Congestion Affects Delivery Times and Costs between North and South America, Asia, and Europe

The Panama Canal, with a total length of 81.3 kilometers, connects the Atlantic Ocean and the Pacific Ocean. It is a lock-type canal where ships need to navigate through a series of locks to raise or lower the water level in order to traverse the canal located between the Central American mountain range. Alongside the Suez Canal, the Panama Canal plays a crucial role in global trade and economic development. The canal currently serves a total of 180 maritime routes that link 1,920 ports across 170 countries, the authority reported. The most significant trade routes serviced by the canal involve the US East Coast-Asia, US East Coast-South America West Coast, and Europe-South America West Coast routes.

MDI Prices are Moving up in South America

South American countries mainly import MDI from U.S., Europe, China, Japan, and South Korea. Due to the congestion in the Panama Canal and recent heavy rainfall in Brazil causing flooding in many ports, ships have been unable to dock, leading to delays in MDI imports and tight supply. As a result, some MDI suppliers have recently raised their quotations. PMDI prices in South America have moved up from the previous USD 1,900/tonne to the current range of USD 1,950-2,000/tonne.

https://www.pudaily.com/Home/NewsDetails/42390

November 20, 2023

Mattress Recycling Council tops the 10 million mattress mark in California

California reaches mattress recycling milestone

Since the launch of the Bye Bye Mattress campaign in California, the state has recycled 10 million mattresses.

Posted by Bob Gaetjens | November 14, 2023

More than 10 million mattresses have been recycled in California since the Mattress Recycling Council (MRC) launched the Bye Bye Mattress program in the state.

The organization, which has operations in several states, reached that milestone nationally in March 2022.

If laid end-to-end, that is enough mattresses to stretch from California’s coastline to the middle of the Indian Ocean. As a result, recyclers have diverted more than 380 million pounds of steel, foam, fiber and wood from landfills and made them available for use in new products such as carpet padding, construction rebar and mulch.

“By reducing the demand to use virgin materials in other products, mattress recycling is contributing to California’s other important environmental goals—saving water, conserving energy and preventing greenhouse gas (GHG) emissions,” MRC Chief Operating Officer Mike O’Donnell says. “We have the data to prove it too. A recent analysis of our California program’s environmental footprint from collection to recycling shows that each mattress recycled saves 500 gallons of water, conserves enough energy to power a house for three days and reduces greenhouse gas emissions equivalent to driving 60 fewer miles.”

MRC’s Bye Bye Mattress is a statewide network of collection sites and events serving urban and rural communities across California that is made possible through collaborations with solid waste providers and nonprofit organizations. A growing number of waste haulers collecting bulky items at the curb are also recycling mattresses through the program.

Mattresses are transported from participating collection locations to regional recyclers, where they are dismantled into their different component parts. Mattress retailers, hotels, dormitories, nursing homes, military bases and other types of businesses also are working with MRC to have their old mattresses collected and recycled by the program.

“We are proud of what we have accomplished in California, but we know there are opportunities for the program to innovate and evolve,” O’Donnell says. “This is why we are supporting the industry’s broader efforts to encourage circular design and sustainability initiatives.”

The MRC undertakes research to improve collection, transportation and recycling processes. This includes providing research firms and educational institutions up to $100,000 in funding for projects aimed at discovering new uses for mattress materials. To date, MRC has awarded funds to more than 30 projects and is seeing some promising outcomes.

“One day, recycled mattress materials may help [electric vehicle] batteries hold longer charges or be used to make shoe soles or clean up oil spills,” O’Donnell says. “We need innovators to create new uses for polyurethane foam, quilt panels, cotton and mixed fibers.”

In addition to Bye Bye Mattress, MRC’s other California activities include offering mattress manufacturing facilities in the state an environmental certification program known as the Sleep Products Sustainability Program (SP2), which encourages conservation and resource efficiency.

“All these accomplishments are possible because MRC has the support of the mattress industry, mattress retailers, the solid waste industry and state agencies that provide oversight and guidance for our programs,” O’Donnell says. “We are also grateful to the international community of mattress recyclers and product stewardship organizations for sharing their best practices, collaborating on research projects and their commitment to sustainability.”

The MRC is an Alexandria, Virginia-based nonprofit organization that operates recycling programs in states that have passed mattress recycling laws, including California, Connecticut and Rhode Island. MRC was founded by the bedding industry and recycles nearly 2 million mattresses each year.

https://www.recyclingtoday.com/news/mattress-recycling-council-bye-bye-california-milestone/

November 19, 2023

U.S. Airports in 2023

The Best and Worst U.S. Airports of 2023

The Journal’s ranking of the 50 largest U.S. airports finds fliers in the West have lots to brag about, while New Yorkers settle for ‘works in progress’

There’s enough that’s easy about traveling through Phoenix Sky Harbor International Airport to land it first among the 20 largest airports in this year’s rankings.

By Dawn Gilbertson| Photographs by Adam Riding for The Wall Street Journal

Nov. 14, 2023 9:00 pm ET

579 Responses

PHOENIX—Searing heat. Erratic sports teams. An unending influx of Californians.

Residents of this desert city have plenty of gripes. One thing you’ll hear few complaints about: the airport. Phoenix Sky Harbor International Airport is a breeze to get to. It offers a solid lineup of airlines and flights. And travelers rarely fret about flight delays and cancellations given the never-have-to-look-at-the-forecast weather.

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It’s a combination that helped land the airport atop The Wall Street Journal’s annual ranking of the country’s busiest airports—again. Sky Harbor took the crown in 2019, before a pandemic pause in the rankings.

Top Five Large U.S. Airports

Overall Rank	Airport	Overall Score
1	Phoenix (PHX)	63.4
2	Minneapolis (MSP)	63.2
3	Los Angeles (LAX)	62.9
4	Atlanta (ATL)	62.7
5	Detroit (DTW)	61.4

Click to see where every airport landed in the full ranking.

Source: 2023 WSJ Airport Rankings

Minneapolis-St. Paul International Airport finished a hair behind Phoenix among the 20 busiest U.S. airports on this year’s list. Los Angeles International Airport took third, just behind them.

The Journal’s report card ranks the 50 largest U.S. airports on 30 measures divided into two categories important to travelers: The first group measures reliability, the second value and convenience.

Each accounted for half of an airport’s overall score, with 10 reliability measures, from Transportation Security Administration waits to time on the tarmac, carrying the most weight overall. After all, the thing we care most about in our travels is getting there on time.

New this year as a measure of customer satisfaction: a survey of travelers done by Dynata for the Journal on amenities that airports get right and wrong, from food and drink to bathrooms to parking.

(See the full results of this year’s large-airport and midsize-airport rankings.)

Good, not great

No airport had a perfect score or anything close to it, a sign of the never-ending stresses on these complex, 24-hour businesses. Sky Harbor, my second home as a Phoenix resident, scored 63.4 out of 100. That wouldn’t earn report-card bonuses in any household.

Top Five Midsize U.S. Airports

Overall Rank	Airport	Overall Score
1	San Jose (SJC)	71.2
2	San Antonio (SAT)	70.4
3	Sacramento (SMF)	70.0
4	Indianapolis (IND)	69.9
5	Houston (HOU)	69.0

Click to see where every airport landed in the full ranking.

Source: WSJ Airport Rankings

San Jose Mineta International Airport in California, the winner in the midsize category, topped all airports with a score of 71.2. San Antonio finished second (70.4), followed by last year’s midsize winner, Sacramento (70).

San Jose shined in reliability, as well as value and convenience. The Silicon Valley airport prides itself on its short walks—you can still walk to the rental-car center—short security lines, on-time performance and therapy dog and cat programs. Earlier this year it introduced a new tagline: Fly Simple.

“We’ve worked really hard to concentrate on the things that we can control,” says Scott Wintner, deputy director.

San Jose Mineta International Airport topped the list of 30 midsize airports. Photo: Markus Mainka/Alamy

The worst-performing large airports won’t surprise anyone, especially given the nonstop headlines on congestion issues in the Northeast: Newark Liberty International Airport and New York’s John F. Kennedy. Dallas/Fort Worth International finished third-worst in our scorecard, dragged down by measures of reliability like heavy arrival and departure delays.

Rick Cotton, executive director of the Port Authority of New York and New Jersey, which oversees the region’s airports, describes Newark and JFK as “works in progress.” Newark’s redesigned Terminal A opened this year, and the Port Authority plans to overhaul the airport’s other two terminals. JFK is also in the midst of a revamp that will cost billions of dollars and take years to complete.

“We’re committed to a trajectory where Newark and JFK are world-class,” Cotton says.

Phoenix, where American and Southwest carry nearly three out of four passengers, was solidly reliable. It also performed well on money matters like airfares and Uber costs to downtown, plus amenities including baggage claim and car-rental facilities, though it fared poorly in rental-car costs on the November weekend we priced.

American and Southwest combine to fly by far the most passengers in and out of PHX.

Sky Harbor had among the fewest flight cancellations of any large airport, shorter delays than most and far shorter time on the tarmac awaiting takeoff or getting to the gate. The average taxi-out time—the time from when a plane leaves the gate until takeoff—was under 15 minutes, compared with 26 minutes at JFK.

Weather helps a lot, of course. Airport director Chad Makovsky also credits the takeoff and landing choreography the airport, airlines, FAA and others have worked to perfect over the years. It’s essential, given the airport’s compact size.

The Sky’s the Limit

Phoenix Sky Harbor International Airport finished first in the WSJ Airport Rankings. Below are some of its highlights and new features.

Sources: WSJ Airport survey; the airport

The city-owned airport near downtown Phoenix sits on 3,400 acres and has just three runways. That compares with 17,000 acres and seven runways at Dallas/Fort Worth, where Makovsky came from in 2021. PHX passenger traffic, fueled by the region’s explosive growth, is up nearly 10% from a year ago and about 4% from 2019 through September.

“We have to be very efficient,” he says.

Upgrades go live

Sky Harbor completed some major projects in the past 18 months that are already a hit with travelers, Makovsky says. Nearly 75% of the airport’s passengers are local. Contrast that with an airport like Charlotte, N.C., where 70% of the passengers are connecting.

In December, a couple months before metro Phoenix hosted the Super Bowl, the airport extended its PHX Sky Train service 2.5 miles to the rental-car center. Travelers previously had to schlep bags to the curb and board a shuttle bus that wound through clogged airport roadways. The airport’s bus fleet went from 120 to a dozen backup buses.

“Being able to connect from any of our terminals to the rental-car center in like five minutes is pretty cool compared to what we used to have,” Makovsky says.

Fliers appreciate features like the airport’s Sky Train and sun-blocking windows.

The airport opened a new concourse, for

Southwest Airlines, in summer 2022. It’s now coming to life as restaurants and bars start to open. A Bobby Flay outlet opened in the food court and a Guy Fieri sit-down restaurant is on the menu by the end of next year. Also on tap: a PGA Tour store with a simulator of the infamous 16th hole at the Phoenix Open. A Chase Sapphire Reserve lounge is due to boost the airport’s weak lounge lineup by next spring.

Makovsky says the new gates in Terminal 4, the airport’s busiest, provide a glimpse into PHX’s future as it builds another concourse in neighboring Terminal 3 and renovates existing concourses in Terminal 4. Many areas of Terminal 4, which opened 33 years ago, are showing their age.

The walkway to the new gates is significantly wider than other concourses at the airport, so there’s less passenger congestion. (Some passengers ding that area for the lack of moving walkways.) The gate areas are larger and windows have dynamic tinting so passengers can look out at the mountains even in the glare of the afternoon sun.

“At the end of the day, we’re trying to keep the stress down for customers,” Makovsky says.

Some fliers have suggested that Sky Harbor could have better signage, shorter walks and more long-haul international flights. (American and

British Airways offer nonstops to London and Condor has seasonal flights to Frankfurt.)

Richard Factor can’t find any fault with the airport. The inventor moved from New York to Sedona, Ariz., a tourist hot spot two hours north of Phoenix, about a decade ago. He and his wife travel frequently.

“The experience there compared to what it used to be back East is so much more pleasant that sometimes I think the airport itself should have a tip jar,” he says.

PHX ranked third in baggage-claim facilities in the traveler survey, trailing only New York’s LaGuardia and Minneapolis-St. Paul. The survey, done by Dynata for the Journal, is on amenities that airports get right and wrong, from food and drink to bathrooms and parking.

(See the full results of this year’s large-airport and midsize-airport rankings.)

—Jacob Passy, Allison Pohle and Kevin McAllister contributed to this article.

—Sign up for the WSJ Travel newsletter for more tips and insights from Dawn Gilbertson and the rest of the Journal’s travel team.

Write to Dawn Gilbertson at dawn.gilbertson@wsj.com

https://www.wsj.com/lifestyle/travel/best-worst-airports-2023-rankings-96d6b945