NEW YORK — UCC Capital Corp.’s recent annual financial predictions for 2006 include slowed second lien lending, deceleration in the real estate market and a loosening of Sarbanes-Oxley.
The predictions were released in UCC’s IP Innovator report, which forecasts the outlook of several different markets, including real estate, banking, communications, technology and apparel.
The report predicted that companies struggling financially under the yoke of Sarbanes-Oxley legislation could catch a break as the law becomes more diluted. This is thought to be particularly true of regulations that hinder small companies’ efforts to go public.
Second lien lending will slow. The projection states that as a combined result of rising interest rates, the complexity of current lien structures and increased competition from mezzanine lenders, the former upsurge of second lien lending will be considerably stalled.
The real estate market is also expected to continue to decelerate. The IP Innovator is quick to assert, however, that it does not believe there will be a “bubble burst” effect, as others have warned. Instead there will be a “soft landing,” as a consequence of both a slowdown of housing in urban markets due to high mortgage and energy prices, and a continued boom in second-home markets thanks to the Baby Boomer generation, which is at the height of its purchasing power.
Google’s ubiquitous influence has found its way into the world of marketing, and IP Innovator predicts the “Googleization of advertising.” The report envisages advertising following Google’s “pull” model as opposed to the current “push” model. In addition, advertisers will harness the considerable power of trusted source marketing, which is defined as “when a company engages a brand, celebrity or other source of information that a consumer already trusts in order to market particular selected products,” and is best exhibited by the commercial phenomenon that is Oprah’s Book Club.
Inspired by the newfound success of comeback brands like Generra and Wrangler, the report predicts a continued restoration of old brands. Such acquisitions by apparel companies would keep their product fresh without the economic burden of creating a start-up.