June, 2009
AIG eyes break-up of ILFC
AIG is considering whether to break up International Lease Finance Corp if it cannot reach a deal to sell the entire aircraft leasing business. The stricken US insurer remains in talks with three buyout groups bidding for ILFC,
Latvia auction flop sparks fears
A failed Latvian government debt auction on Tuesday triggered fears in financial markets that emerging economies would struggle to find buyers for a huge wave of sovereign debt issuance. The auction failure revived concerns about the economies of central and eastern Europe and triggered a sell-off in shares of Swedish banks,
UK hedge funds warn on EU rules
Some of Britain’s biggest hedge funds have warned the UK Treasury they will have to leave the country unless a draft European directive is radically altered. Some have already begun contingency preparations to move to Switzerland or New York if the rules – described by one manager as a “French plot against London” – are not rewritten.
Debenhams to raise up to £400m
UK retailer Debenhams is on Thursday expected to announce plans to raise up to £400m through a placing and open offer of shares in a bid to cut its debt burden of almost £1bn. The company aims to raise £300m to £400m,
Amlin buys Fortis business for €350m
Amlin is pulling the corporate insurance business of Fortis from the limbo of Dutch-government ownership after the Lloyd’s of London insurer bought it for €350m (£303m). Amlin said the acquisition would give it a better foothold in continental Europe.
Clear Channel lenders to nix refinancing
Some key lenders to the private equity groups that led the $23.8bn buy-out of Clear Channel Communications plan to reject a proposed debt exchange, hoping to drive the radio and outdoor advertising company towards default and take control of its equity at a steep discount.
$12.7bn record for S Korean bonds
South Korean companies are returning to the bond market in record numbers as investor appetite revives for dollar-denominated issues from Asia’s fourth-largest economy. Bankers said that, after a slow first quarter,
Hercules eyes early bond repayment
The £1.5bn Hercules Unit Trust, managed by British Land and Schroders, has proposed to pay its bondholders early as part of a broader restructuring that could see more than £100m injected by a new overseas investor.
Swiss watchdog to toughen bonus rules
Switzerland’s financial markets regulator, Finma, on Wednesday proposed new pay rules to link bonuses more closely to long-term profits and avoid excesses such as those at UBS, one of the biggest casualties of the credit crisis.
Fall in Libor clouds true picture
The dramatic fall in money market rates since last October’s peak has fuelled hopes that the credit crisis is easing. But analysts and bankers warn that the drop in Libor rates, which should boost lending in the financial markets,
HKEx names Li new chief
Hong Kong Exchanges and Clearing has appointed a Beijing-born investment banker as its new chief executive, in a move seen as cementing the bourse’s ties with the mainland Chinese market. Charles Li,
Morgan Stanley hires UBS derivatives chiefs
Morgan Stanley has hired Clark Hutchison and Bill Templer, co-heads of exchange-traded derivatives at UBS, in a push to become a top-tier broker in the listed futures and options industry. The two helped UBS scale the rankings in exchange-traded derivatives,
Overnight markets: Decline
Asian stocks dropped on Thursday for the first time in five days, led by consumer and mining companies, after US data showed weaker-than-expected growth in the service sector. Futures on the S&P500 Index slipped 0.5% as the gauge retreated from a seven-month high to fall 1.4% on Wednesday.
The first amendment is a valuable thing
A condensed version of an earlier post, this.
Graph taken from the excellent paper by Frank Partnoy: How and why credit rating agencies are not like other gatekeepers.
Gordon Gekko… has a daugher
Gordina?
Well no, but maybe.Via Dealbreaker, Nikki Finke’s Deadline Daily has detail on the latest version of the plot for the long a-rumoured Wall Street II:Michael Douglas, as everyone already knows,
Rating the first amendment
Floyd Abrams is defending the rating agencies.
Since time immemorial (well, Enron’s collapse) the rating agencies have steeled themselves against accusations of bias and mis-rating with a powerful defence:
El-Erian: Bernanke and the “new normal”
Pimco’s Mohamed El-Erian kindly provided FT.com with a snap commentary on Ben Bernanke’s congressional testimony on Wednesday.
Extract:
The bottom line is that we should come away from Mr Bernanke’s testimony with at least two conclusions:
Big news: apparently deficits are now officially a problem
Forgive us if we’re mistaken, but weren’t large current account deficits supposed to be totally manageable for sizable industrious nations like the United States and the United Kingdom? No problemo. All fine and dandy.
Maximum negative convexity
From bond market blog Across the Curve:
As far as the agency passthrough market is concerned, we are at the point of maximum negative convexity at the moment (Figure 2). We estimate that 30-year agency passthrough universe will extend by $149 billion 10-year Treasury equivalents for a 25bps backup (parallel shift) in rates.
You’re fired
The man on left is Paul Kemsley.
Apart from being mates with Sir Philip Green and ‘Magpie’ Mike Ashley, this wannabe property magnate he is probably best known for his appearances on the Apprentice as one of Surallun Sugar’s guest interogators.
Latvian bond failure begins
Jitters surrounding the fate of Latvia and its euro currency peg appear to have taken their first victim – the 50m lat sale of Latvian government Treasury bills on Wednesday. Here’s Reuters on the story:
Tavakoli really does have issues with Taleb
Seems we were being a bit charitable when we wrote on Monday that Janet Tavakoli, of Tavakoli Structured Finance, was criticising the journalistic manner of men’s magazine GQ rather than Nassim Nicholas Taleb’s honesty.
CDS report: Floored rally?
The cost of buying protection against default on investment-grade bonds in Europe continued to fall early on Wednesday despite a slight drop in the continent’s main equity markets.
The flagship Markit iTraxx Europe,
Lunch Wrap
On FT Alphaville Wednesday morning,
- Is the dollar losing its safe-haven premium?
- “Don’t take us back to the Dark Ages” – the popular unpopularity of fiscal stimulus.
- Foreigners are stealing our quantitative easing.
A new era of FX
An interesting observation from Bank of New York Mellon’s FX team on Wednesday (our emphasis):
Indeed, at the risk of over-simplification, it appears to us that we have now entered a new era in financial history – an era in which certain governments are seriously deliberating the USD’s hegemony as a reserve currency and even its stability over the longer-term.
Free risk!
No, not in the sense that you get risk for free. It’s an existential question as to whether that’s even available.
Rather, this is about “freeing financial data and risk modelling.”
Freerisk is a project with the goal of making freely available the data,
Das Volkswagen short squeeze Déjà vu-Erlebnis
We mentioned last week that certain short-sellers were steadily building positions in Volkswagen — again.
They appeared to have forgotten their last shorting experience with the German carmaker — which resulted in the biggest short squeeze in history.