At this year’s Baltimore Smart Business Dealmakers Conference, an expert panel, featuring specialists in interest rate risk management, strategic advisory, and M&A transactions, provide actionable insights to mitigate risks and maximize opportunities for both growth and divestiture in an increasingly complex time of tax policies and tariffs.
Paragon Biosciences’ Peter Buzy, Evergreen Advisors Capital’s Stephen Prichett and First National Bank’s David Valentiner headline the panel, moderated by FNB Corporation’s Mac Tisdale. Here’s an excerpt:
“Everything that we're seeing is a very simple, the markets are unsure — they are moving simply away from anything risky towards things that are safer,” says David Valentiner, Director of Interest Rate Management, First National Bank. “Even in the M&A market, it's been a little more difficult. We've seen fewer sponsor deals, but you're seeing more strategic buyers. Those deals are still seemingly getting done because the way the sponsors are looking at the risk and trying to finance it. I would say the one big difference there is that in all of that, everything makes sense. The counterintuitive part has been that we would expect to see overall interest rates fall as markets move from riskier assets into the safe haven of U.S. Treasuries. And that's actually gone the opposite way. We're seeing those rates go higher. And that should give everyone a pause to ask why that's happening. And we don't fully know, but it could be that people are so worried they're actually moving directly into cash. It's also worth noting that about 30 percent of our bond markets are from foreign investors. They may be pulling money out of the United States altogether, and that's why the dollar is actually coming down. So, in terms of Treasury interest rates, we're kind of in the middle of the range we've been in for the last three years, and I think we'll stay there. In terms of funding rates for, say, M&A transactions, banks are still lending at pretty good, tight spreads. The rest of that capital stack, anything risky is definitely moving away and getting a lot more expensive, and I think it will continue to until we get some clarity on tariffs and how much that's going to impact the economy.”
