1406508--4/24/2009--Capmark_Financial_Group

related topics

{loss, insurance, financial}

{condition, economic, financial}

{regulation, government, change}

{regulation, change, law}

{loan, real, estate}

{acquisition, growth, future}

{operation, international, foreign}

{interest, director, officer}

{capital, credit, financial}

{tax, income, asset}

{debt, indebtedness, cash}

{system, service, information}

{competitive, industry, competition}

{stock, price, operating}

Our independent registered public accounting firm has concluded that substantial doubt exists about our ability to continue as a going concern as a result of our net losses and breach of financial covenants in certain of our borrowing arrangements. Our liquidity and financial condition have been and could continue to be adversely affected by current market and economic conditions. Our business is significantly affected by general business, economic and cyclical market conditions, particularly in the commercial real estate industry, and accordingly, our business has been and could continue to be harmed in the event of a prolonged economic slowdown or recession or a market downturn or disruption. Developments in the debt capital markets have adversely affected and may continue to adversely affect our results of operations and financial condition. We require substantial amounts of capital to fund our operations. If we are unable to maintain adequate funding on acceptable terms, our results of operations and financial condition could suffer and we could face difficulty in operating our business and may need to seek some form of reorganization. Our senior credit facility, our bridge loan, our notes and other financing arrangements contain restrictions that may limit our flexibility or adversely affect our business. We have suffered adverse consequences as a result of downgrades of our credit ratings, and future downgrades could result in further adverse impacts. Our reserve for loan losses may prove inadequate, which could have a material adverse effect on our financial results. Changes in prevailing interest rates, credit spreads and credit availability have and may continue to adversely affect our results of operations and financial condition. Our business outside the United States exposes us to additional risks, including foreign currency exchange rate risks, that may adversely affect our results of operations. Our efforts to mitigate risks relating to changes in interest rates, credit spreads and foreign currency exchange rates may not be successful and may expose us to additional types of risks. We may suffer a loss if the value of property or other assets securing loans that we hold for sale or investment deteriorates. Our results of operations and financial condition could be adversely affected if assumptions underlying our credit underwriting models prove to be incorrect. If the estimates or assumptions we use to value our assets or determine our allowance for loan losses prove to be incorrect, we may be required to write down assets or increase our allowance for loan losses. The loss of or changes in our relationships with GSEs and federal agencies would have an adverse effect on our business. Changes in existing government-sponsored and federal mortgage programs could negatively affect our business. We are required to apply complex accounting standards in the ordinary course of our business. Changes in those standards, or improper application of those standards, may adversely affect our reported results of operations and financial condition. The requirements associated with being a reporting company require significant company resources and management attention. Risks associated with yield guarantees for some of our LIHTC funds expose us to potential losses. Our sponsorship of LIHTC funds exposes us to various risks associated with equity investments in multifamily properties. We have exposure to risks of loss in the event that we are unable to recover advances or guarantee payments relating to certain lower-tier partnerships. Our sponsorship of LIHTC funds involves additional risks that could adversely affect our business and results of operations. We are dependent upon the proper operation of our systems and adequacy of our internal processes, and any failure in the operation of those systems or the adequacy of those processes could negatively affect our ability to operate our businesses. We face competition that could harm our market share and results of operations. Our business may be adversely affected by the regulated environment in which we operate and by governmental policies. Our business could be adversely affected by changes in governmental fiscal and monetary policies. If we are required to register under the Investment Company Act, our ability to conduct our business could be materially adversely affected. We have businesses that generate significant income from tax-favored investments, and changes in law or tax rates can reduce the income of those businesses by decreasing the attractiveness of those products. Our sponsorship of NMTC funds is subject to unique risks that could impact our business and results of operations. Liabilities under environmental laws may expose us to losses or limit our ability to foreclose on properties securing loans. We are controlled by our Sponsors whose interests may differ from the interests of our other stockholders or our creditors.

Full 10-K form ▸

1406508--4/24/2009--Capmark_Financial_Group_Inc.