September, 2009
Bharti, MTN in $24bn accord
Bharti Airtel, India’s biggest mobile-phone company, and South Africa’s MTN Group reached a $24bn preliminary accord to buy each other’s shares, the first step in a planned merger, reports Bloomberg.
Suntory eyes Orangina
Suntory Holdings, the privately held Japanese beverage maker, is in talks to acquire Orangina, the French soft drink manufacturer, from buyout firm Blackstone and its partner Lion Capital in a deal that would likely be worth at least $3bn.
New hopes breathe fire into stocks
Hopes for a revival in company takeovers and growing belief in the strength of economic recovery on Wednesday drove the FTSE 100 index through the 5,000 level for the first time in almost a year. The rebound in world stock markets since March drew fresh momentum this week from Kraft’s potential £10.2bn bid for Cadbury.
Goldman chief admits banks lost control
Lloyd Blankfein, chief executive of Goldman Sachs, on Wednesday criticised some of the exotic products sold by banks in the run-up to the financial crisis and called for restraint on executive pay and bonuses.
Banks face loss of FDIC guarantee
The US Federal Deposit Insurance Corp is preparing to wind down an emergency programme launched last year, in what could become an early test of how the banking industry will fare without extraordinary government assistance,
NatExpress bid hurdle cleared
The board of National Express on Wednesday night paved the way for a £765m takeover of the British bus and rail group after it agreed to allow a consortium comprising its largest shareholder to examine its books.
Brazil oil bonanza boosts BG
Brazil’s prospects of becoming a top oil producer increased on Wednesday when it emerged that an offshore field being developed by BG could be twice the size of a discovery reported by BP last week in the Gulf of Mexico.
BAIC to rescue Saab takeover
China’s Beijing Automotive Industry Holding Co has plugged a funding gap that threatened to scupper General Motors’ sale of Saab with a €275m ($400m) investment and an agreement to expand the Swedish brand in China.
Dutch banks agree milestone code
Dutch banks will become the first in the world to cap the value of bonuses paid to top executives under a new code that will restrict such pay-outs to one year’s salary. The code, drawn up by the Dutch bankers’ association and the finance ministry,
Cadbury investors press Kraft
Cadbury investors are putting pressure on Kraft to raise its putative offer for the UK confectionery group quickly, even as the value of the possible deal falls. With a combined bid from Nestlé/Hershey or a PepsiCo approach seen as possible,
Bank of China to launch fund of funds
Bank of China is planning to launch a fund to invest in hedge funds, the latest sign of keen Chinese interest in the alternative investment industry. The new fund of funds will be launched next year and will be offered via Bank of China Suisse,
BofA, SEC justify $33m settlement
Bank of America and America’s SEC were on Wednesday forced to file arguments with a federal judge justifying their $33m settlement in August over allegations of false and misleading statements to shareholders,
Jobs takes stage again at Apple
Steve Jobs on Wednesday made his first public appearance since a liver transplant five months ago. In an unbilled speech at Apple’s launch in San Francisco of ringtones and other improvements to its music products and services,
Morgan Stanley loses Mideast chief
George Makhoul, the Dubai-based president of the Middle East for Morgan Stanley, is resigning from the investment bank, officials said on Wednesday. One fellow executive said Makhoul decided he “isn’t suited to the industry” and might join local boards and return to consulting.
Overnight markets:Up
Asian stocks climbed on Thursday, sending the MSCI Asia Pacific Index to a one-year high after strong gains in US and European markets on Wednesday amid a flurry of deal activity and growing confidence in the global economic recovery.
US economy steadying, but still fragile, Beige Book finds
The Federal Reserve released the latest edition of its so-called Beige Book on Wednesday. Unlike the Federal Open Market Committee minutes, the report is not representative of the Fed’s views; instead,
CDS report: The tightening trend continues
Gavan Nolan of Markit wrote this CDS report
After a slow start, the European credit markets extended the tightening trend seen this week. The Markit iTraxx indices opened wider as stocks moved lower and investors took profits.
CRE datapoint du jour, Tishman Speyer edition
The crisis has not been kind to either the empire or the reputation of property developer Tishman Speyer.
In August, the Wall Street Journal reported a partnership led by Tishman had been hurt by the downturn in office property,
Star Tudor trader Mark Hillery joins Brevan Howard
Mark Hillery – until last year the head of emerging markets at blue chip hedge fund Tudor Investment Management and one of the most senior traders at the firm – has joined London’s Brevan Howard.
Mr Hillery,
Even the US Treasury is downbeat on housing
The US Treasury Department painted a less than rosy picture of the health of and outlook for the country’s housing market on Wednesday.
According to the prepared remarks of Michael Barr, the assistant secretary for financial institutions,
The Black Swan battle is about to begin
On Thursday, the US House of Representatives Committee on Science & Technology will turn its attention to financial modeling.
Specifically, the committee will be scrutinising the role of the much-maligned Value-at-Risk model,
Hybrid debt attack, from Moody’s
Perhaps genuinely expected by the market this time — a Moody’s downgrade of Lloyds, RBS, Allied Irish Banks and Bank of Ireland subordinated, or hybrid, debt.
On the UK side:
London, 09 September
Fabulous Footsie back through 5000
Now just 1,930 points off an all time high
$134bn of US Option ARM RMBS to recast by 2011, Fitch says
First, some definitions and context (via Tanta, RIP). Emphasis FT Alphaville’s:
“Reset” refers to a rate change. “Recast” refers to a payment change.
…
Option ARMs do not “recast” until the sooner of 1) the loan reaching its balance cap or 2) the first “scheduled”
Adventures in hybrid debt, fixed income fund edition
So who buys banks’ hybrid, or subordinated, debt?
Fixed income funds (FIFs), for a start. And S&P’s just-released report into UK FIFs makes for an interesting illustration of what’s been going on in the sector.
Shop till you drop
The Fed’s “consumer credit outstanding” measure tumbled by a record $21.6bn in July. Here’s what that drop looks like in graphic terms:
(H/T Marc Ostwald at Monument Securities)
Lunch Wrap
On FT Alphaville Wednesday morning,
- Kraft’s credit.
- RBS and Lloyds “most exposed” to CRE.
- Spanish catastrophe, datapoint del dia.
- Tear down this hybrid capital wall.
- Bonfire of the bears – Yell edition.
Petroplus, still praying for a distillate recovery
Europe’s largest independent refiner, Swiss-based Petroplus, announced a capital raising on Wednesday consisting of a $400m from a senior-note issue, a $150m convertible bond issue and a CHF290m new share issue to boost the firm’s capital and support its acquisition campaign.
China discovers the joy of DIY debt
Treasury lovers across the world beware – China has discovered the joys of DIY.
On Tuesday, the world’s biggest holder of US government debt said it would issue renminbi-denominated bonds to offshore investors for the first time.