Posts from Monday Jan 11 2010

PIKing apart the Man Utd refinancing

You have to look hard to find it, but it’s there in the notes on page 30 of the (printed) prospectus — what appears to be a key reason for Manchester United’s £500m senior notes offering and refinancing.

Emphasis ours… Read more

SEC offers Judge Rakoff a Bronx cheer…

This is the second amended SEC complain in the ongoing rumpus over whether Bank of America adequately informed investors over the size of losses at soon-to-be-acquired Merrill Lynch, along with the fact that Merrill executives were about to trouser $5.8bn in bonuses.

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Does Hank Greenberg read the news?

Having been CEO of AIG since the 1960s, only to resign in 2005 amidst a major accounting scandal, you could perhaps forgive him if he doesn’t.

Maurice `Hank’ Greenberg spoke with the Wall Street Journal this weekend past, and he had some interesting things to say about the bailed-out insurer, as well Goldman Sachs. Read more

More fun and games on Aim

Aim-listed shell company Deo Petroleum has featured in a couple of recent Markets Live sessions here on FT Alphaville.

The reasoning behind its multiple appearances: its moon-bound share price, which left a company with just £200,000 of cash valued at more than £15m. Read more

CDS report: Sovereigns wider than corporates?

Gavan Nolan of Markit wrote this CDS report

After a brief pause on Friday normal service was resumed as the credit and equity markets continued to rally. The Markit iTraxx Europe index was about 2bp tighter at 65.5bp, while the Markit iTraxx HiVol tightened by a similar amount to trade at 92.5bp. The Markit iTraxx Crossover index was 12bp tighter at 384bp. All three indices gave back some of their gains in the afternoon after a weak US opening. Read more

Norway – BUY

We’ve got an outbreak of hegemony in the world of strategy research.

Andrew Garthwaite, and his global equity research macro team at Credit Suisse, have published a currencies outlook for 2010. Read more

Man Utd edition (updated)

Click to enlarge…

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Speculative default rates decrease, Moody’s says

Here’s something to boost Monday’s junk bond-craze.

Moody’s reports that the speculative-grade default rate has decreased for the first time since January 2008. Here’s the relevant bit from the ratings agency’s December default report. Read more

Switzerland, the former bolt-hole?

Neutral, snowy, and tax-lite – Switzerland was supposed to be the destination of choice for outraged City-types and others in the financial sector intent on protecting their bonuses.

Some excited reports even had Goldman Sachs moving its European headquarters from London to somewhere less fiscally challenged, and Switzerland might have fitted the bill. Read more

Talf gaffe at the Fed

Whoops. Here’s something FT Alphaville missed last week.

A major mea culpa from the Federal Reserve on the legacy CMBS portion of its Talf programme. Read more

Lunch Wrap

On FT Alphaville Monday morning,

- Debt double-Glazering for ManU. Read more

The trillion-dollar ETP market

In case there was any doubt exchange-traded products were developing as the world’s fastest growing asset class, Deutsche Bank — an exchange-traded product issuer — has come out with its first dedicated analysis series observing the degree of the products’ recent ascent.

As the bank’s ETP research analyst Christos Costandinides observed on Monday (our emphasis): Read more

Unintended consequences, accounting for Basel edition

No adjustment should be applied to remove from the Common Equity component of Tier 1 unrealised gains or losses recognised on the balance sheet.

Thus read the Basel Committee’s recommendations for strengthening the banking sector, released last month. Read more

Markets Live transcript 11 Jan 2010

Live markets commentary from FT.com 

Paying the piper

Dubai-based Arabtec is among the bigger construction companies in the United Arab Emirates. It worked on Burj Khalifa skyscraper and many of the region’s other iconic projects.

But over the weekend control of the company was effectively transferred to Abu Dhabi in a complex deal that will see investment fund Aabar emerge with a 70 per cent holding in the company. Read more

A secessionist recession for EU peripherals?

This paper examines the issues of secession and expulsion from the European Union (EU) and Economic and Monetary Union (EMU). It concludes that negotiated withdrawal from the EU would not be legally impossible even prior to the ratification of the Lisbon Treaty . . .

That, if you can believe it, is from a December 2009 ECB legal working paperRead more

Crying over hot air

Last week was an interesting one for commodities reporting.

In short, the mainstream press discovered the UK natural gas market. And while it’s very nice that they should care so much about a usually under-reported market (bar end-user price-hikes), it did show up some curious operational misunderstandings and err, slightly alarmist reaction. Read more

It’s happening, EM banks take on the world

China has had a few big moments along the way — becoming the world’s biggest holder of US government debt, building up the world’s biggest pool of foreign reserves and boasting the world’s biggest bank by some measures.

And now, the country’s banks are climbing Read more

Then and now: Banks and their book value

From Monday’s FT.

Then… Read more

The big boys move out of Tokyo

We’re wondering if it’s something in the Tokyo water — or perhaps it is all about the strange and increasingly vexing twists and turns of Japan’s new(ish) Hatoyama government. Or maybe it comes down to the old motive for just about everything in the big, wide world of investment banking: money.

Citigroup has just become the third big US bank (at least) in under four months to decide to pull its Japan chief out of the country. Read more

Debt double-Glazering

On sale today:

Issuer: MU Finance plc.
Sec Type: Senior Secured Notes Distribution: 144A and RegS (no Reg Rights)
Amount: £500,000,000 equiv.
Currency: GBP / USD Maturity: 7 Years NC3 (par + coupon)
Minimun denom: £50k + £1k / $100k + $1k
Ratings: None Business: Leading UK football club and global sports franchise Use of Proceeds: Refinance existing debt
Roadshow schedule: Asia – Jan 11-12th Europe – Jan 13-18th US – Week of Jan 19th Underwriters: JPM (b&d), BAML, DB, GS, RBS // KKR Read more

Further reading

Elsewhere on Monday and at the weekend,

- Another bubble? Thanks but we’ve already got oneRead more

Pink picks

Comment, analysis and other offerings from Monday’s FT,

Robert Barbera and Charles Weise: A jobs-rich US recovery?
Only one short year ago, the world was staring depression in the face. Now the economy is recovering but commentators warn of a “jobless recovery” of the kind that followed the last two recessions, in 1990-91 and 2001; they could well be wrong, write Barbera, chief economist, investment technology group, and economics department fellow at the Johns Hopkins University, and Weise, chairman and associate professor of economics at Gettysburg CollegeRead more

Snap news

Breaking pre-market news on Monday,

- Heineken buys beer division of Fomento Economico Mexicano SAB for €3.8bn – statement and statementRead more

Overnight markets: Up

Asian stocks rose and commodities gained after China’s exports surged in December and imports rose to a record, amid signs of accelerating global economic recovery, reports Bloomberg. Japan’s markets were closed on Monday for a public holiday.

Asian markets (Mon – Japan closed)
Nikkei 225 (Fri) up +116.66 (+1.09%) at 10,798
Topix (Fri) up +11.00 (+1.65%) at 676.00
Hang Seng (Mon) up +304.64 (+1.37%) at 22,601 Read more

China banks eclipse US rivals

Chinese banks have cemented their position as the most highly valued financial institutions, taking four of the top five slots in a ranking of banks’ share prices as a multiple of their book values. China Merchants Bank, China Citic, ICBC and China Construction Bank lead the table, followed by Itaú Unibanco of Brazil, all with a price-to-book multiple of more than three. The changes reflect growing confidence in emerging markets, particularly in China and Brazil.

RBS kickstarts branch sales

Part-nationalised Royal Bank of Scotland has started the sale process for over 300 of its British branches, reports Reuters. RBS has sent out a “teaser” document to interested parties and appointed UBS to handle the process. Potential bidders have been given until the end of the month to express an interest, one source said. RBS has been given up to four years to sell RBS-branded branches in England and Wales and NatWest branches in Scotland by the EU’s competition body for receiving government support.

Citi’s Japan chief to exit

Citigroup’s top executive in Japan is returning to the US to become chief operating officer of Citibank, North America, a commercial and retail banking arm. The move comes as Citi’s operations in Japan shrink with the sale of assets such as the lender’s Nikko unit. Darren Buckley, CEO of Citibank Japan, will replace Peterson as country head.

Tokyo rejects external funds for JAL

The state-backed fund in charge of Japan Airlines’ restructuring plans has indicated it opposes efforts by either Delta or American Airlines to inject capital into the struggling carrier. The development comes amid growing expectations that JAL will file for court-led rehabilitation, similar to America’s Chapter 11, within the next two weeks. It is thought that Japan’s Enterprise Turnaround Initiative Corp might want to avoid potential complications arising from a capital alliance with a US-based airline.

Santander to rebrand UK branches

Hundreds of branches of Abbey and Bradford & Bingley will on Monday be rebranded under the Santander name as the Spanish bank embarks on a mass transformation of its UK businesses. Santander has spent £30m refurbishing 1,000 UK branches, launching a marketing campaign as it brings its UK brands under one name. It will on Monday unveil about 500 new Santander branches in London and south-east England.