May, 2009
Snap news
Breaking pre-market news on Tuesday,
- Bank of America said to sell stake in China Construction Bank for $7.3bn — Bloomberg.
- Porsche should reduce its debt before merging with Volkswagen, VW chairman says — Reuters.
Stress tests unleash fee bonanza
The completion of US banking “stress tests” has unleashed a fee bonanza for Wall Street, with financial institutions set to earn more than $500m within weeks as many of the 19 lenders involved in the tests tap the market to fill the capital holes uncovered by regulators or repay funds from the Tarp scheme.
Goldman agrees $60m subprime deal
Goldman Sachs has agreed to a $60m settlement to resolve claims by a Massachusetts regulator that it participated in unfair and deceptive lending practices involving subprime mortgages. The settlement did not involve an admission of wrongdoing by the bank.
Microsoft in landmark bond issues
Microsoft passed a significant milestone in its financial history on Monday as it turned to the bond market for the first time, raising $3.75bn to add to its already sizeable cash pile. The landmark long-term debt issue signals a further break with the company’s traditionally conservative stance towards its balance sheet.
Ford share issue to raise up to $2bn
Ford Motor, the only one of the three US carmakers to shun a government bail-out, has further distanced itself from its troubled rivals with plans for an equity issue of up to 345m common shares that could raise close to $2bn.
Credit insurance hinders GM restructuring
Hedge funds and other investors stand to make billions of dollars on credit insurance contracts if GM declares bankruptcy, a prospect that is complicating efforts to agree a restructuring plan for the automaker,
GM eyes quick Opel stake sale
General Motors aims to choose a preferred partner for its European Opel/Vauxhall operations by the end of May, although it is “more probable” that GM will file for Chapter 11 bankruptcy protection by the government-set deadline of June 1,
Ambac to file against banks
Ambac, the bond insurer whose finances have been hit by guarantees on billions of dollars of securities linked to risky mortgages, expects to file more lawsuits against banks that acted as underwriters and managers of these securities.
MBIA shares soar on profit news
MBIA, once the largest US bond insurer, reported Monday it had swung to a first-quarter profit after a huge year-earlier loss, sending its shares up 18% in after-hours trade, reports Reuters. MBIA’s quarterly results were helped by an accounting gain of about $1.6bn,
EDF sells 20% of British Energy to Centrica
EDF on Monday announced the sale of a 20% stake in British Energy to Centrica of the UK, in a deal that would value the French group’s recently acquired nuclear operator at close to 6% less than the £12.4bn it paid last year.
Energizer to buy Johnson brands
Energizer Holdings, which owns a variety of household product and personal care businesses, said on Monday that it will buy privately-held SC Johnson’s Edge and Skintimate shaving brands for $275m. Energizer,
Geffen sets sights on NY Times
David Geffen, the former record executive who made an offer for the LA Times two years ago, now wants to buy the New York Times, say people close to the situation. Geffen, a co-founder of DreamWorks SKG,
HK court: Li ‘manipulated’ PCCW vote
Richard Li, one of Hong Kong’s best-known business tycoons, was on Monday rebuked by a judge for a “clearly manipulated” shareholder vote that approved the attempted $2bn buy-out of his telecoms company PCCW.
Fed governors backed Friedman waiver
A waiver granted by Federal Reserve Vice Chairman Donald Kohn that allowed the chairman of the New York Fed’s board of governors to stay in his job had the full backing of the Fed’s Board of governors,
Dreier pleads guilty to $400m fraud
High-profile New York lawyer Marc Dreier pleaded guilty on Monday to criminal charges of running a $400m investment fraud involving fake promissory notes, and a judge released him into house arrest until sentencing,
Overnight markets: Down
Asian stocks slid on Tuesday from a seven-month high, ed by banks and mining companies, as investors sold shares trading at their most expensive valuations in five years. Futures on the S&P500 lost 0.5% after the gauge slid 2.2% on Monday.
[The Stanford Series] Laura Pendergest-Holt to face more charges, Fox Business says
Fox Business Network, which has been aggressively pursuing the Stanford story, reported on Monday that Laura Pendergest-Holt is facing further charges:
Laura Pendergest-Holt, chief investment officer of the Stanford Financial Group,
Aurelius Capital fails to trigger MBIA CDS payouts
Alea spotted this statement out from ISDA:
It’s from the newfangled ISDA CDS determinations committee, and it refers to an earlier formal request for the committee to ascertain whether CDS written on MBIA – the failed bond insurer – could be said to have been triggered under the terms of a “succession event”.
[The Stanford Series] Authorities still failing to get along
The SEC’s allegations against Sir Allen Stanford have illustrated the complex and often adversarial relationships between regulators, governments and quasi-governmental bodies, courts and individuals involved.
How to…launder money
A hot topic this, what with revelations from the BBC about Sir Allen Stanford’s DEA habit, the changing face of international trade and generalised regulatory lockdown the world over.
From the Miami Herald,
Ackman’s Gekko moment
Bill Ackman has had a tempestuous relationship with Target Corp; which has proved a rather large blot on the Pershing Square principal’s otherwise highly successful ride through the financial crisis.
Way back in July 2007,
Is that a buy from the Coppock indicator?
Mike Lenhoff, chief strategist and head of research at Brewin Dolphin Securities, draws our attention to the “Coppock indicator” in one of his latest posts on the London Stock Exchange website.
As Lenhoff points out,
Quick competition for money brokers
Question: If Terry Smith was asked to come up with a new name or acronym for Britain’s Local Authority Pension Fund Forum, what might he come up with?
Context: The Local Authority Pension Fund Forum (LAPFF) has called on its members to oppose the remuneration report at Tullett Prebon PLC.
Lotting premiums, covenants and Enterprise Inns
James Ainley, the pub sector analyst at Panmure Gordon, has done some interesting digging on Enterprise Inns.
According to Ainley, its seems that one reason Enterprise has been able to stay within its net worth covenants is its very liberal use of a 20 per cent “lotting premium”
Bonfire of the Vanities, redux
Tom Wolfe – chronicler par excellence of Eighties Wall Street excess, has written a piece in Monday’s revamped Evening Standard. In fact, he’s penned a “world exclusive”.
Alas, the piece isn’t digitised yet,
Very light jets look very vulnerable
An Irish-based, low-cost executive jet airline is all set to launch this September, reports CIARAN HANCOCK
IN AVIATION parlance, JetBird chief executive Stefan Vilner has “pushed back” and is about to begin his taxi to the runway.
Has the CDS rally gone too far?
The credit strategists at BNP Paribas believe the recent rally in the credit default swap market – particularly among riskier credits – may have gone too far, according to a comment issued on Monday.
BNP’s anaylsts highlight the iTraxx Crossover,
Pirates of London
So, it isn’t unreasonable to expect Somali Pirates to be powered by Bloomberg afterall. From the Guardian:
…pirate groups have “well-placed informers” in London who are in regular contact with control centres in Somalia where decisions on which vessels to attack are made.
Rig counts still falling
In more bearish news for the oil market, rig counts as compiled by Baker Hughes are continuing to fall across the world, implying a radical investment pullback in future production — ultimately a bullish factor further down the line.
CDS report: A reversal of trend
European credit markets saw an abrupt trend reversal on Monday as the cost of protecting against default on a range of higher-risk corporates widened suddenly after a week of falling prices.
Having tightened by almost 80 basis points last week,