Markets live chat transcript for the chat ending at 16:39 on 15 Jan 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) Stacy-Marie Ishmael, FT (SMI)
PM:
Howdy
PM:
We’re back again
PM:
Unscripted this time
PM:
Neil and I couldn’t stay away
PM:
generalised wipe out of the banks once again underway
NH:
afternoon, just fastening the tin hat
NH:
third notch on the chin strap
PM:
But before we lead you through he carnage, Neil has had a little history lesson over lunch
PM:
Sandwich lunch
PM:
Courtesy of Credit Suisse
PM:
The history lesson — not th elunch
NH:
“I am certain that my fellow Americans expect that on my induction into the
Presidency I will address them with a candor and a decision which the
present situation of our Nation impels. This is preeminently the time to speak
the truth, the whole truth, frankly and boldly. Nor need we shrink from
honestly facing conditions in our country today. This great Nation will endure
as it has endured, will revive and will prosper. So, first of all, let me assert my
firm belief that the only thing we have to fear is fear itself – nameless,
unreasoning, unjustified terror which paralyzes needed efforts to convert
retreat into advance. In every dark hour of our national life a leadership of
frankness and vigor has met with that understanding and support of the
people themselves which is essential to victory. I am convinced that you will
again give that support to leadership in these critical days
Presidency I will address them with a candor and a decision which the
present situation of our Nation impels. This is preeminently the time to speak
the truth, the whole truth, frankly and boldly. Nor need we shrink from
honestly facing conditions in our country today. This great Nation will endure
as it has endured, will revive and will prosper. So, first of all, let me assert my
firm belief that the only thing we have to fear is fear itself – nameless,
unreasoning, unjustified terror which paralyzes needed efforts to convert
retreat into advance. In every dark hour of our national life a leadership of
frankness and vigor has met with that understanding and support of the
people themselves which is essential to victory. I am convinced that you will
again give that support to leadership in these critical days
PM:
So where’s that from?
NH:
Franklin Delano Roosevelt: First Inaugural Address
PM:
Ahah
PM:
Makes sense, when everyone is drawing comparisons with the Great Depression
NH:
In such a spirit on my part and on yours we face our common difficulties.
They concern, thank God, only material things. Values have shrunken to
fantastic levels; taxes have risen; our ability to pay has fallen; government
of all kinds is faced by serious curtailment of income; the means of
exchange are frozen in the currents of trade; the withered leaves of
industrial enterprise lie on every side; farmers find no markets for their
produce; the savings of many years in thousands of families are gone.
More important, a host of unemployed citizens face the grim problem of
existence, and an equally great number toil with little return. Only a
foolish optimist can deny the dark realities of the moment.
They concern, thank God, only material things. Values have shrunken to
fantastic levels; taxes have risen; our ability to pay has fallen; government
of all kinds is faced by serious curtailment of income; the means of
exchange are frozen in the currents of trade; the withered leaves of
industrial enterprise lie on every side; farmers find no markets for their
produce; the savings of many years in thousands of families are gone.
More important, a host of unemployed citizens face the grim problem of
existence, and an equally great number toil with little return. Only a
foolish optimist can deny the dark realities of the moment.
NH:
Yet our distress comes from no failure of substance. We are stricken by no
plague of locusts. Compared with the perils which our forefathers
conquered because they believed and were not afraid, we have still much
to be thankful for. Nature still offers her bounty and human efforts have
multiplied it. Plenty is at our doorstep, but a generous use of it languishes
in the very sight of the supply. Primarily this is because the rulers of the
exchange of mankind’s goods have failed, through their own stubbornness
and their own incompetence, have admitted their failure, and abdicated.
Practices of the unscrupulous money changers stand indicted in the court
of public opinion, rejected by the hearts and minds of men.
plague of locusts. Compared with the perils which our forefathers
conquered because they believed and were not afraid, we have still much
to be thankful for. Nature still offers her bounty and human efforts have
multiplied it. Plenty is at our doorstep, but a generous use of it languishes
in the very sight of the supply. Primarily this is because the rulers of the
exchange of mankind’s goods have failed, through their own stubbornness
and their own incompetence, have admitted their failure, and abdicated.
Practices of the unscrupulous money changers stand indicted in the court
of public opinion, rejected by the hearts and minds of men.
PM:
Well i noticed Jonathan Guthrie went one better this morning
PM:
Drawing comparisons with the Black Death
PM:
very day economic historians find further terrifying precedents for the current catastrophe. Shortly they will identify parallels with the era of the Black Death, when collapsing hovel prices triggered devaluation of the groat. Lending officers, hunkered in their bunkers, are accordingly unwilling to lend generously until the collapse of civil society and cannibalism of infants has been averted.
3:52PM
NH:
right let’s get back to today
NH:
what we are seeing here in Europe
NH:
is being triggered by events on Wall Street
NH:
and specifically fears
NH:
real fears
NH:
that Citi will be nationalised
NH:
and the US govt is going to end up owning an even larger slug of BoA
NH:
Paul has the price action
PM:
Bank of America currently down 2.26 at 7.94 — drop of 22%
Citigroup off 0.96 at 3.56 – drop of 21.4%
JMP UP — a fraction
PM:
25.95 — up a princely 0.04
NH:
in the case of BoA and C
NH:
that’s an improvement
NH:
at once stage they were both off 25%
NH:
which seems incredible
NH:
both lost 25% of their value
3:55PM
PM:
How about over here?
PM:
Lloyds trading down 14.7 at 102.5
PM:
Did touch 99.2p earlier
PM:
Barclays — poor barclays — off 8.8%
PM:
129p
NH:
and here’s the rest
HBOS (HBOS:LSE): Last: 70.10, no change, Volume: 0.00
Royal Bank of Scotland Group (RBS:LSE): Last: 40.80, down 0.9 (-2.16%), High: 43.80, Low: 40.30, Volume: 77.00m
HSBC Holdings plc (HSBA:LSE): Last: 551.50, down 37.25 (-6.33%), High: 587.75, Low: 550.25, Volume: 38.86m
Standard Chartered (STAN:LSE): Last: 746.50, up 1 (+0.13%), High: 792.00, Low: 741.50, Volume: 3.48m
PM:
And the indices???
PM:
Dow currently trading at 8061, off 137
PM:
Keeps making little runs at 8k
PM:
Nice of you to give us the HBOS quote neil
PM:
Fromyesterday
NH:
of course
NH:
they have gone
NH:
but they are not fogotten
PM:
Thanks Chartist below
PM:
Footsie off 61.7 at 4118
PM:
touched 4090
NH:
right let’s get to some of chatter we have been picking up in the market
NH:
this is all RAW of course
RAW is market chatter – information that has not been formally tested through traditional journalistic channels (PRs etc). The story might be complete rubbish, but if we believe there is some substance to it we will say so. Either way, Reader Beware.
PM:
RED RAW
PM:
Traders are panicking themselves with terror stories
PM:
READER BEWARE
NH:
right here goes
NH:
Further to the Citi nationalised rumour which still has not been denied, we’re also now hearing that ML will have a $16bn loss in Q4 which is weighing on BAC share price: -26%
- Whilst remember, UK Financials shorting is allowed from tonight, & now spec that however bad the news is, the Govt can’t u-turn this owing to a complete loss of face/confidence….but beware LLOY has just fallen off a cliff.
- Whilst remember, UK Financials shorting is allowed from tonight, & now spec that however bad the news is, the Govt can’t u-turn this owing to a complete loss of face/confidence….but beware LLOY has just fallen off a cliff.
NH:
and
NH:
There is a rumour currently circulating that a European bank is about to be nationalised – I haven’t been able to get any more info (country or region) – have you guys heard anything? Irish banks just downgraded by Fitch so you could look that way.
There is always the argument that most of the banks in Europe are virtually nationalised anyway..
There is always the argument that most of the banks in Europe are virtually nationalised anyway..
NH:
and this
NH:
I have just been rang up and told there are heavy rumours doing the rounds that a EUROPEAN bank is about to be nationalised… Change in Fitch view of Irish banks turning heads that way…
NH:
and perhaps the most interesting one of all
NH:
BN: Ackermann Collapsed After Sausage, Sauerkraut, Bild-Zeitung Says
PM:
NH:
I have also got some analyst comment
NH:
on the BoA situation
NH:
here’s Morgan Stanley
PM:
(“Bankers and mashed – thats rather good David B)
NH:
Impact on our views: No change to our Underweight
rating. We do not have facts on this next USG
intervention yet. We estimate that it will be structured
like Citigroup’s TARP II; incremental preferred, higher
coupon of ~9%, common dividend cut to 1c/quarter,
Without facts detailing program, we are not changing our
Underweight recommendation on BAC. Our
Underweight is based on an expectation that BAC’s
losses rise against its own portfolio, CFC, and MER. We
will update our model as the facts regarding the next
round of government support are disclosed.
rating. We do not have facts on this next USG
intervention yet. We estimate that it will be structured
like Citigroup’s TARP II; incremental preferred, higher
coupon of ~9%, common dividend cut to 1c/quarter,
Without facts detailing program, we are not changing our
Underweight recommendation on BAC. Our
Underweight is based on an expectation that BAC’s
losses rise against its own portfolio, CFC, and MER. We
will update our model as the facts regarding the next
round of government support are disclosed.
NH:
What’s new: WSJ reported that BAC is likely to be
receiving incremental funds from the USG to cover for
higher-than-expected risk in Merrill Lynch. Confirmation
anticipated on January 20 during BAC’s earnings
announcement.
receiving incremental funds from the USG to cover for
higher-than-expected risk in Merrill Lynch. Confirmation
anticipated on January 20 during BAC’s earnings
announcement.
NH:
Investment thesis: We are Underweight BAC due to our
expectation for rising losses in BAC’s portfolio as well as
CFC and MER. We estimate an additional $6B in credit
costs to come from CFC over BAC’s purchase
accounting MTM. For 4Q08, we expect a MTM
write-down of $3.3B on illiquid assets (lev loans, CDOs,
CMBS).
expectation for rising losses in BAC’s portfolio as well as
CFC and MER. We estimate an additional $6B in credit
costs to come from CFC over BAC’s purchase
accounting MTM. For 4Q08, we expect a MTM
write-down of $3.3B on illiquid assets (lev loans, CDOs,
CMBS).
NH:
and this from Stifel Nicolas
NH:
The Wall Street Journal reported after the close Wednesday that Bank of
America and the U.S. Treasury Department are in discussions to provide
BAC with additional capital and provide protection from losses on Merrill
Lynch’s balance sheet.
According to the article, discussions began in mid-December when BAC
informed the Treasury that it was unlikely to complete its purchase of Merrill
Lynch because of Merrill’s larger-than-expected losses in the fourth
quarter.
America and the U.S. Treasury Department are in discussions to provide
BAC with additional capital and provide protection from losses on Merrill
Lynch’s balance sheet.
According to the article, discussions began in mid-December when BAC
informed the Treasury that it was unlikely to complete its purchase of Merrill
Lynch because of Merrill’s larger-than-expected losses in the fourth
quarter.
NH:
The article further states that officials at the Treasury were concerned
failure of BAC’s acquisition of Merrill could affect the stability of U.S.
financial markets. As such the Treasury agreed to work with BAC in
formulating a plan that includes new government capital. In addition, the
Journal indicated that any possible plan could protect BAC from losses on
Merrill’s troubled assets. There would be a cap on the losses that BAC
would be on the hook for with the federal government picking up the rest.
Clearly, the initial take on this is negative given the need for more capital
and a loss sharing agreement for BAC. However, is that reaction premature
without really knowing the specific details of the plan? If the timeline of the
Journal article is accurate, then it seems reasonable to us to believe that
BAC was willing to walk away from the Merrill deal (unlike the Countrywide
deal) because of the risk involved unless it was enticed by some Fed
assistance.
failure of BAC’s acquisition of Merrill could affect the stability of U.S.
financial markets. As such the Treasury agreed to work with BAC in
formulating a plan that includes new government capital. In addition, the
Journal indicated that any possible plan could protect BAC from losses on
Merrill’s troubled assets. There would be a cap on the losses that BAC
would be on the hook for with the federal government picking up the rest.
Clearly, the initial take on this is negative given the need for more capital
and a loss sharing agreement for BAC. However, is that reaction premature
without really knowing the specific details of the plan? If the timeline of the
Journal article is accurate, then it seems reasonable to us to believe that
BAC was willing to walk away from the Merrill deal (unlike the Countrywide
deal) because of the risk involved unless it was enticed by some Fed
assistance.
NH:
The question then becomes how much assistance and on what terms? Is it
punitive or advantageous to BAC? Did the systemic risk of a failed
acquisition of Merrill by BAC cause the Treasury Department to provide
assistance (a la Bear Stearns) or is this another bailout is disguise?
The devil will be in the details of the announced plan, which unfortunately is
not expected to occur until BAC reports 4Q08 earnings this coming
Tuesday. If it is punitive, then it is a bailout of BAC, which is not good. If it is
advantageous then it would appear that BAC earned some “goodwill” from
the Federal government and any initial negative reaction would be
premature.
punitive or advantageous to BAC? Did the systemic risk of a failed
acquisition of Merrill by BAC cause the Treasury Department to provide
assistance (a la Bear Stearns) or is this another bailout is disguise?
The devil will be in the details of the announced plan, which unfortunately is
not expected to occur until BAC reports 4Q08 earnings this coming
Tuesday. If it is punitive, then it is a bailout of BAC, which is not good. If it is
advantageous then it would appear that BAC earned some “goodwill” from
the Federal government and any initial negative reaction would be
premature.
NH:
as for Citigroup
NH:
analysts talking about what sort of loss it could post next week
NH:
4QE to -$1.19 from -$0.47
Cut reflects add’l asset marks and cont’d credit losses
Citi recently announced an expected $1.4bn credit loss provision as a result of the
Lyondell bankruptcy. Accordingly, we are raising our loss forecast in the Inv.
Bank by about $1bn (-$0.12). We also adjusted our already high consumer loss
forecasts up slightly to reflect cont’d credit deterioration (-$0.07). The primary
driver of our cut, however, is a significant increase in our expected mark-to-mkt
loss in Citi’s portfolio of illiquid securities to $8bn from $4bn:
Cut reflects add’l asset marks and cont’d credit losses
Citi recently announced an expected $1.4bn credit loss provision as a result of the
Lyondell bankruptcy. Accordingly, we are raising our loss forecast in the Inv.
Bank by about $1bn (-$0.12). We also adjusted our already high consumer loss
forecasts up slightly to reflect cont’d credit deterioration (-$0.07). The primary
driver of our cut, however, is a significant increase in our expected mark-to-mkt
loss in Citi’s portfolio of illiquid securities to $8bn from $4bn:
NH:
$4bn in leveraged loan book suggesting a cum. 66% mark
$3bn in CMBS portfolio suggesting a cum. 60% mark
$1bn in Alt-A portfolio suggesting a cum. 28% mark
$3bn in CMBS portfolio suggesting a cum. 60% mark
$1bn in Alt-A portfolio suggesting a cum. 28% mark
NH:
The additional $0.04 cut is to reflect 2 months effect of the first government
preferred issuance. Note that this forecast does not include an expected $4bn
(+$0.75) gain from the sale of Citi’s consumer business in Germany.
preferred issuance. Note that this forecast does not include an expected $4bn
(+$0.75) gain from the sale of Citi’s consumer business in Germany.
NH:
Post Smith Barney sale, major restructuring appears likely
In the face of mounting losses and particularly stressed capital ratios, Citigroup
has agreed to sell its Wealth Mgmt business into a minority owned JV and is now
thought to be planning a significant asset disposition that would significantly
reduce the footprint of the firm. Amidst all this, Citi has moved up its earnings
date to Friday, January 16. We are evaluating the implications of this
restructuring and expect more color on these possible plans Friday. However, we
remain concerned that a spin-off/good + bad bank move may require a
considerable equity infusion, creating more dilution.
In the face of mounting losses and particularly stressed capital ratios, Citigroup
has agreed to sell its Wealth Mgmt business into a minority owned JV and is now
thought to be planning a significant asset disposition that would significantly
reduce the footprint of the firm. Amidst all this, Citi has moved up its earnings
date to Friday, January 16. We are evaluating the implications of this
restructuring and expect more color on these possible plans Friday. However, we
remain concerned that a spin-off/good + bad bank move may require a
considerable equity infusion, creating more dilution.
PM:
Thanks for all that Neil
PM:
And a big thanks to Bryce onthe Markets Desk for collating the notes
PM:
He’s a mean acquirer of IB research notes, our Bryce
NH:
hang on, another rumours had just landed in my inbox
NH:
Hearing talk of Merrill’s to post $16bln loss for Q4.
SMI:
Allo all
NH:
actually, the market seems to be taking all this bad bank news fairly well
SMI:
Just dashed back from a press conference given by the G30
NH:
FTSE 100 still down around 70 points
SMI:
Chaired by Paul Volcker
PM:
Hi Stacy
PM:
What did Volcker have to say?
PM:
And is he still growing
SMI:
(Dr Evil please do stop talking up CIT. I’ve spoken to you about that before)
SMI:
Volcker and the G30 think banks should be banned from prop trading
PM:
I remember standing next to him once — he’s HUGE
PM:
Volcker says ban prop trading
PM:
Dismantle Goldman Sachs?
NH:
this really could be the end of Wall Street
4:09PM
SMI:
Argues that any banks (well, the ones that survive) “should be restricted in undertaking proprietary activities that prsent particularly high risks and serious conflicts of interest”
PM:
Hmmm
PM:
Okay lets move on
NH:
let’s get away from equities and look at some other asset classes
NH:
forex
SMI:
Latest CDS: itraxx main 169.18, Xover 1016.3, CDX IG 224.25
NH:
Dollar yen is around 89.65
NH:
cable is $1.456
NH:
and dollar euro is 1.30
NH:
surprised by that thought it would have been weaker
NH:
T-bills
SMI:
[On G30, I will do a post in a bit with more details and extracts from the report]
NH:
big, big move in the 30-year
NH:
up 0.5468
PM:
THAT’S MASSIVE
NH:
but the 10-year down on the day – small
PM:
Very odd — ever other maturity yield down
NH:
and gold
NH:
what’s that doing
NH:
looks like it is $808
4:14PM
NH:
latest Citi price
NH:
3.69 -0.84 (-18.54%)
PM:
Stacy — how is Francesco fairing up
NH:
8.06 -2.14 (-20.98%)
NH:
small rally
PM:
Given that he largest brought it to everyone’s attention on the citigroup front
PM:
With his scoop earlier this week on the break up plan
SMI:
PM – he’s typing very very fast at the moment
PM:
That’s Francesco Guerrera — US fin editor
PM:
And a rather good market reporter in his own right – in his day
PM:
And so he should be — typing quickly
NH:
OK, bank share prices might be collapsing round the world
NH:
but HSBC’s PR company
NH:
are still out banging the drum
PM:
NH:
or banging their head against a brick wall
PM:
We’ve got a new missive from the felt
PM:
PM:
it’s actually a female felt — but that’s irrelevant
NH:
did she email this time or was it her PA?
PM:
No — this is “from the desk of…”
PM:
Drawing our attention to a note by Nomura
PM:
Follows a sales team meeting
NH:
background
NH:
HSBC’s flaks have been trying to rubbish Morgan Stanley banks analyst Michael Helsby
NH:
he put a note out yesterday saying
NH:
HSBC needs to raise between $20-$30bn
NH:
and halving its dividend
PM:
Well, this is what Nomura had to say — reportedly
PM:
Rob Law was speaking to our sales team this morning to address the views
in the market regarding any need for HSBC to raise capital. In summary
he is not a buyer of the MS opinion and HSBC remains his most favoured
bank share.
in the market regarding any need for HSBC to raise capital. In summary
he is not a buyer of the MS opinion and HSBC remains his most favoured
bank share.
On the Morgan Stanley analysis, he did point out that their history of
recommendations is not great – this time last year they were buyers of
B&B and HBOS and sellers of Lloyds and HSBC. He also pointed out some
of the deficiencies in the analysis of the HSBC capital position: In
particular he noted that they mark to market the HSBC Finance loan book
without making similar adjustments to the peer group – which is clearly
inconsistent. He also pointed out that you would also need to mark to
market the liabilities, which is likely to have a positive impact.
On capital, reiterated that HSBC have maintained their capital strength
in good times and he did agree that there is no longer a surplus.
Furthermore the gap in terms of their surplus capital versus the
competition has closed as other banks have raised capital. He also
noted that HSBC’s capital ratios are not as flexible as more localised
banks given the requirements to provide that capital into those local
markets.
He also went on to say that in the current market environment, one
cannot rule out the possibility of HSBC raising capital. However, he
made the point that there is not much point having a surplus in good
times if you then need to raise capital in bad times. He also stated
that if there was more capital required for the industry, HSBC would be
last in that line. However, he did say that he would not discount the
possibility of HSBC raising capital in association with an acquisition.
On the subject of dividends, his stated view is that HSBC will cut its
dividend for 2009 and that this dividend cut will be significant. On
timing he believes that if HSBC are going to be cut in 2009, they may as
well cut in the Q4 2008 payout.
More generally on the sector, he said that global deleveraging is going
to get worse in 2009 and fundamentally one should not own banks – this
is not a new line from him! However, if you do want to buy a bank, own
the one least geared to this deterioration – with loan to deposits at
90% and falling, and with a risk appetite in lending that has been
historically lower than the competition, HSBC fits this bill.
Geographically, the banking system is geared to debt to GDP ratios, and
this must fall (the only place where this ratio might actually rise is
Asia), and allied to this there will be economic growth in these
regions, so exposure to this region remains positive.
On that basis, he recommended owning HSBC on a short and long term basis
(and the worse economic conditions get, the more one should want to own
HSBC).
PM:
Give people a moment to read that — its really bitchy
NH:
that’s really, really bitchy. bringing up past recommendations
PM:
We wouldnt do that! 
NH:
like a load of kids squabbling in the playground
NH:
and what exactly does the PR company acting for HSBC hope to achieve from this?
NH:
makes them look more desperate
NH:
if HSBC has a problem with this note
SMI:
[on JP - Aa3 is the fourth highest rating; Moody's outlook is stable]
NH:
make a statement
NH:
or write a letter to a newspaper
NH:
this tactic sucks
PM:
Fun to exposure this really — how corporate communication actually works
PM:
Post-modern journalism
PM:
NH:
yes folks that’s how it works
4:23PM
PM:
sort of
NH:
getting away from the banks quickly
NH:
two bits of late RAW
NH:
rumours around of a bid for Eidos
NH:
stock up 40%
NH:
and Venture Production
NH:
the Centrica bid rumours won’t go away, probably because of this
NH:
Centrica in talks to raise GBP 1.5bn debt for British Energy stake buy; would leave it with GBP 500m surplus
Centrica, the listed UK gas company, is in talks to arrange up to GBP 1.5bn in debt facilities for its purchase of a 25% stake in the existing UK nuclear business of British Energy from EdF, it is understood. If secured, this would leave it with a surplus of around GBP 500m.
The same seven banks that handled a GBP 2.2bn rights issue for Centrica earlier this month would provide the new debt facility, it was said. It is expected that the additional money could be available within several weeks.
Centrica needs to raise only GBP 1bn in debt to complete the 25% GBP 3bn stake purchase, but this news service has learned it is now in talks to arrange as much as GBP 1.5bn in debt. It was said that the additional funds would be used for additional corporate purposes, it was said.
NH:
Centrica has been linked in media reports with a potential bid for UK North Sea oil company Venture Production. However, a person familiar with the situation said that there was nothing imminent on this front, noting that ‘someone had made a lot of money’ in the run-up in Venture’s share price on the back of the takeover rumours. The individual also denied a media report saying that Centrica had already bought a stake in Venture. A spokesperson for Centrica said that the company had no comment.
NH:
A spokesperson for Venture Production did not immediately return a telephone call seeking comment, but the company released a statement to the UK stock exchange this morning saying that ‘The Board of Venture has noted the recent movement in the Company’s share price and speculation concerning a potential offer for the Company. The Board of Venture has received no approaches in relation to any potential offer.’ Reports on Wednesday suggested Centrica, the owner of British Gas, had bought a stake in Venture from either 3i Group or Aberdeen Asset Management, who together own a total stake of around 15%. Neither 3i nor Aberdeen would comment. Venture shares were trading at GBp 149.770 on Thursday in London giving the company a market capitalization of GBP 724m.
NH:
It is understood that Centrica remains in discussions with EdF on a number of issues, including the exact financing of the deal, potential power purchase or off-take agreements, and the exact sites of new nuclear power stations.
It is also understood that Centrica’s bid for 25% of British Energy’s existing nuclear business in the UK would need a separate regulatory approval from the Office of Fair Trading (OFT), the UK regulator.
A second source familiar with the situation also confirmed that it was likely that the 25% stake transaction would need a separate regulatory approval from the larger deal, in which EdF bought British Energy for GBP 12.4bn. This transaction received regulatory approval from the European competition authorities late last month.
The GBP 2.2bn rights issue was organised by a consortium of seven banks, with Goldman Sachs International, Credit Suisse and UBS Investment Bank, acting as joint book runners and Barclays Capital, BNP Paribas, HSBC and RBS as lead managers.
It is also understood that Centrica’s bid for 25% of British Energy’s existing nuclear business in the UK would need a separate regulatory approval from the Office of Fair Trading (OFT), the UK regulator.
A second source familiar with the situation also confirmed that it was likely that the 25% stake transaction would need a separate regulatory approval from the larger deal, in which EdF bought British Energy for GBP 12.4bn. This transaction received regulatory approval from the European competition authorities late last month.
The GBP 2.2bn rights issue was organised by a consortium of seven banks, with Goldman Sachs International, Credit Suisse and UBS Investment Bank, acting as joint book runners and Barclays Capital, BNP Paribas, HSBC and RBS as lead managers.
NH:
that’s from Deal Reporter
NH:
and as we said this morning
NH:
Centrica are being really cagey at the moment
Venture Production (VPC:LSE): Last: 514.00, down 39 (-7.05%), High: 530.00, Low: 450.00, Volume: 2.57m
NH:
which given they were up 23% yesterday
NH:
and the market is lower today
NH:
is a pretty good performance
NH:
and suggests there is no smoke without fire
PM:
one to watch
4:28PM
PM:
Should point out that the equties markets have calmed down somewhat
PM:
Looks like we’ve had a positive influence
PM:
Wall street often goes to sleep during the the middle of the day
PM:
Watch the last half hour tho — to get the real trend
NH:
oh, looks like there has been a big clear out at Dresdner Kleinwort today
NH:
loads of executives resigned following the ComedyBank takeover
NH:
The other committee members are leaving. According to DK’s website they
were:
Chief Executive Stefan Jentzsch;
Jens-Peter Neumann, head of capital markets and head of equity and credit
derivatives
Baudouin Croonenberghs, chief operating officer
Alberto Piedra, head of global banking
Mergers and acquisitions (M&A) specialist John McIntyre, head of
strategic advisory
Bertrand Pinel, head of global finance
William Fish, head of global loans and transaction services
Martin Newson, head of hedge fund solutions and head of global equities
Thomas Roeder, head of principal investments
Mike Adams, head of emerging markets
Eddie Listorti, head of fixed income, currencies and commodities (FICC)
Stefan Guetter, head of global distribution
Colin Phillips, head of research
were:
Chief Executive Stefan Jentzsch;
Jens-Peter Neumann, head of capital markets and head of equity and credit
derivatives
Baudouin Croonenberghs, chief operating officer
Alberto Piedra, head of global banking
Mergers and acquisitions (M&A) specialist John McIntyre, head of
strategic advisory
Bertrand Pinel, head of global finance
William Fish, head of global loans and transaction services
Martin Newson, head of hedge fund solutions and head of global equities
Thomas Roeder, head of principal investments
Mike Adams, head of emerging markets
Eddie Listorti, head of fixed income, currencies and commodities (FICC)
Stefan Guetter, head of global distribution
Colin Phillips, head of research
PM:
hmm
NH:
in fact, all but one of the executive committe that ran the bank has gone
4:31PM
PM:
Now — we are going to finish up now
PM:
But before we do — some people were interested in Albert Edwards this morning
PM:
Sam was saying earlier that it was the scariest thing he’d read in ages
PM:
Post is here
SMI:
Edwards is terrifying
PM:
terrifying — and hugely entertaining — all at once
PM:
Thanks for joining us this afternoon
NH:
and just to say we are planning more afternoon sessions like this, to link in with US economic data, corporate results, etc
PM:
yes — first one with Neil and Stacy next Tuesday
PM:
Ive booked my ticket as a reader/commenter below
SMI:
Our Inauguration and inaugural session
NH:
and readers, this session was completely live and unscripted. we dont pre can everything
NH:
we can do it LIVE
PM:
Just and so
PM:
Also — anyone who wants adding to the email alert list for unscheduled Market Live session — drop us a mail at alphaville@ft.com
PM:
And we will put you on the list
SMI:
Monkey – Edwards.
PM:
Re the dinner comments below — we had Roubini along to our Webby dinner in New York
PM:
The guy is extremely good company
NH:
not sure Taleb would be a bundle of fun
PM:
Oh, i dont know
SMI:
I saty between him and Andrew Betts. Very entertaining evening
PM:
As for Edwards…
PM:
Anyway — we should let people get on with some proper work
NH:
OK, that’s it
NH:
closing FTSE level
NH:
looks like it will settle around 75 points lower at 4,105
NH:
and look at Smug Bank
SMI:
Dow at 8066.65 -133.49 (-1.63%)
NH:
and look at Smug Bank
NH:
does not look like the PR offensive is working
PM:
Leave em alone Neil!
NH:
in fact it is making things worse
NH:
down 7% now
PM:
Stacy — thanks for joining us at short notice — dashing across manhattan
SMI:
In a cab in the snow. V glam, I thought.
PM:
seeya