Economy | Business | Social | Leaked | Opinions
Friday, April 25, 2008
GLOBAL INDEXES
FTSE 100 INDEX 6,091.40 40.70 0.67%
CAC 40 INDEX 4,978.21 48.66 0.99%
DAX INDEX 6,896.58 75.26 1.10%
---
US
DOW JONES INDUS. AVG 12,891.86 42.91 0.33%
S&P 500 INDEX 1,397.84 9.02 0.65%
NASDAQ COMPOSITE INDEX 2,422.93 -5.99 -0.25%
CAC 40 INDEX 4,978.21 48.66 0.99%
DAX INDEX 6,896.58 75.26 1.10%
---
US
DOW JONES INDUS. AVG 12,891.86 42.91 0.33%
S&P 500 INDEX 1,397.84 9.02 0.65%
NASDAQ COMPOSITE INDEX 2,422.93 -5.99 -0.25%
Citigroup, Merrill Lead Record Week of Bond Offerings
Citigroup, Merrill Lead Record Week of Bond Offerings
April 25 (Bloomberg) -- Citigroup Inc. and Merrill Lynch & Co. led $43.3 billion of U.S. corporate bond sales, the busiest week on record, as financial companies sold debt at the highest yields since May 2001.
Sales compare with $31.2 billion last week and an average this year of $18 billion, according to data compiled by Bloomberg. Citigroup, the biggest U.S. bank by assets, sold $6 billion of hybrid bonds in the company's largest public debt offering, while New York-based securities firm Merrill Lynch raised $9.55 billion by issuing debt and preferred securities.
Bond offerings soared as investors grew more optimistic financial companies can recover from $309 billion of writedowns and credit losses tied to the collapse of subprime-mortgage securities. Banks and securities firms sold 88 percent of investment-grade debt this week, Bloomberg data show. High-yield bond sales swelled to the most since November.
``Investors are feeling better about banks being proactive about raising capital,'' said Mike Difley, who helps oversee $21 billion in fixed-income assets as a portfolio manager at American Century Investment Management in Kansas City. ``They're trying to get their house in order.''
The extra yield investors demand to own investment-grade debt fell 9 basis points this week to 268 basis points, the lowest since March 5, according to Merrill Lynch index data. Yet yields rose to 6.13 percent, the highest since August. A basis point is 0.01 percentage point.
`Access to Markets'
Spreads began to fall from a record high of 305 basis points on March 20 after the Federal Reserve engineered a bid by JPMorgan Chase & Co. to buy Bear Stearns Cos. following a run on the company. The bailout convinced investors that the Fed won't let a major financial company fail, said Sabur Moini, who oversees $1.5 billion of fixed-income securities as a money manager at Payden & Ragel in Los Angeles.
``Despite the challenges that some of these banks have, they're going to be around,'' Moini said. ``They have access to the markets.''
Yields on bonds issued by financial companies rose to 6.34 percent yesterday, the highest since May 2001, Merrill data show.
Citigroup sold perpetual preferred shares after posting almost $16 billion in writedowns, increasing the New York-based bank's total capital raising since November to $37.2 billion, Bloomberg data show. The sale helps compensate for more than $40 billion of credit losses and writedowns since last year.
The perpetual hybrid bonds pay interest of 8.4 percent for 10 years. After that, if not called, the interest rate will begin to float at 4.03 percentage points more than the London interbank offered rate, or Libor, which is currently set at 2.91 percent.
Merrill Lynch
Hybrid bonds such as preferred shares that have characteristics of both debt and equity count toward capital reserves, allowing banks to replenish their coffers without diluting equity. Hybrids typically allow issuers to defer interest payments without defaulting, and credit-rating companies usually consider the bulk of the money raised as equity, meaning only a portion is counted as debt on an issuer's balance sheet.
Merrill Lynch, after writing down the value of $6.5 billion of assets, sold $7 billion of senior unsecured notes in its biggest debt offering, attracting investors with spreads as much as triple what it paid a year ago. Merrill Lynch, the third- biggest U.S. securities firm, also issued $2.55 billion of perpetual preferred shares that yield 8.625 percent, its largest sale of the securities.
Bank of America
The firm split its bond sale between $1.5 billion of 5-year 6.15 percent notes that priced to yield 325 basis points more than Treasuries of similar maturity and $5.5 billion of 10-year 6.875 percent notes that paid a spread of 320 basis points, Bloomberg data show. That compares with the 107-basis point spread Merrill Lynch paid on $1 billion of 10-year notes in April 2007.
Merrill Lynch may now lose its A1 ranking at Moody's Investors Service because the credit rating service won't count the proceeds of the preferred sale as equity, Sanford C. Bernstein & Co. analyst Brad Hintz said today in a note to clients. Credit-rating companies typically don't allow more than 25 percent of a bank's capital base to be made up of preferred stock, a limit Merrill is ``well over,'' he said.
Bank of America Corp., the second-biggest U.S. bank by assets, sold $4 billion of perpetual hybrid bonds that pay 8.125 percent until 2018, and French investment bank Natixis SA raised $750 million in an offering of perpetual subordinated securities yielding 10 percent.
Massive Deals
The financial companies are ``coming out with some pretty yieldy paper,'' Moini said. ``That's why all these massive deals are getting done. And people still have a lot of cash.''
Four high-yield, high-risk companies sold $2.85 million of debt this week, the most since the week ended Nov. 30, according to Bloomberg data. FireKeepers Casino, owned by the Nottawaseppi Huron Band of Potawatomi, sold $340 million of seven-year senior secured notes at a yield of 13.875 percent, and Russian mobile phone company OAO VimpelCom raised $2 billion in the country's biggest sale of dollar-denominated debt.
Investors added $211 million to high-yield corporate bond funds, the fourth straight inflow, according to AMG Data Services in Arcata, California. That's the longest streak of inflows since October, AMG said.
High-yield spreads dropped 13 basis points this week to 692 basis points, the lowest since January, Merrill data show. Yield premiums reached a five-year high of 862 basis points on March 17. Junk bonds are rated below Baa3 by Moody's and BBB- by Standard & Poor's.
Non-financial investment grade issuers this week included Xerox Corp., the world's largest maker of high-speed color printers, with its record sale of $1.4 billion of 5- and 10-year notes, and Midwest utility Great River Energy, which issued $400 million of 30-year first-mortgage bonds.
BLOOMBERG
April 25 (Bloomberg) -- Citigroup Inc. and Merrill Lynch & Co. led $43.3 billion of U.S. corporate bond sales, the busiest week on record, as financial companies sold debt at the highest yields since May 2001.
Sales compare with $31.2 billion last week and an average this year of $18 billion, according to data compiled by Bloomberg. Citigroup, the biggest U.S. bank by assets, sold $6 billion of hybrid bonds in the company's largest public debt offering, while New York-based securities firm Merrill Lynch raised $9.55 billion by issuing debt and preferred securities.
Bond offerings soared as investors grew more optimistic financial companies can recover from $309 billion of writedowns and credit losses tied to the collapse of subprime-mortgage securities. Banks and securities firms sold 88 percent of investment-grade debt this week, Bloomberg data show. High-yield bond sales swelled to the most since November.
``Investors are feeling better about banks being proactive about raising capital,'' said Mike Difley, who helps oversee $21 billion in fixed-income assets as a portfolio manager at American Century Investment Management in Kansas City. ``They're trying to get their house in order.''
The extra yield investors demand to own investment-grade debt fell 9 basis points this week to 268 basis points, the lowest since March 5, according to Merrill Lynch index data. Yet yields rose to 6.13 percent, the highest since August. A basis point is 0.01 percentage point.
`Access to Markets'
Spreads began to fall from a record high of 305 basis points on March 20 after the Federal Reserve engineered a bid by JPMorgan Chase & Co. to buy Bear Stearns Cos. following a run on the company. The bailout convinced investors that the Fed won't let a major financial company fail, said Sabur Moini, who oversees $1.5 billion of fixed-income securities as a money manager at Payden & Ragel in Los Angeles.
``Despite the challenges that some of these banks have, they're going to be around,'' Moini said. ``They have access to the markets.''
Yields on bonds issued by financial companies rose to 6.34 percent yesterday, the highest since May 2001, Merrill data show.
Citigroup sold perpetual preferred shares after posting almost $16 billion in writedowns, increasing the New York-based bank's total capital raising since November to $37.2 billion, Bloomberg data show. The sale helps compensate for more than $40 billion of credit losses and writedowns since last year.
The perpetual hybrid bonds pay interest of 8.4 percent for 10 years. After that, if not called, the interest rate will begin to float at 4.03 percentage points more than the London interbank offered rate, or Libor, which is currently set at 2.91 percent.
Merrill Lynch
Hybrid bonds such as preferred shares that have characteristics of both debt and equity count toward capital reserves, allowing banks to replenish their coffers without diluting equity. Hybrids typically allow issuers to defer interest payments without defaulting, and credit-rating companies usually consider the bulk of the money raised as equity, meaning only a portion is counted as debt on an issuer's balance sheet.
Merrill Lynch, after writing down the value of $6.5 billion of assets, sold $7 billion of senior unsecured notes in its biggest debt offering, attracting investors with spreads as much as triple what it paid a year ago. Merrill Lynch, the third- biggest U.S. securities firm, also issued $2.55 billion of perpetual preferred shares that yield 8.625 percent, its largest sale of the securities.
Bank of America
The firm split its bond sale between $1.5 billion of 5-year 6.15 percent notes that priced to yield 325 basis points more than Treasuries of similar maturity and $5.5 billion of 10-year 6.875 percent notes that paid a spread of 320 basis points, Bloomberg data show. That compares with the 107-basis point spread Merrill Lynch paid on $1 billion of 10-year notes in April 2007.
Merrill Lynch may now lose its A1 ranking at Moody's Investors Service because the credit rating service won't count the proceeds of the preferred sale as equity, Sanford C. Bernstein & Co. analyst Brad Hintz said today in a note to clients. Credit-rating companies typically don't allow more than 25 percent of a bank's capital base to be made up of preferred stock, a limit Merrill is ``well over,'' he said.
Bank of America Corp., the second-biggest U.S. bank by assets, sold $4 billion of perpetual hybrid bonds that pay 8.125 percent until 2018, and French investment bank Natixis SA raised $750 million in an offering of perpetual subordinated securities yielding 10 percent.
Massive Deals
The financial companies are ``coming out with some pretty yieldy paper,'' Moini said. ``That's why all these massive deals are getting done. And people still have a lot of cash.''
Four high-yield, high-risk companies sold $2.85 million of debt this week, the most since the week ended Nov. 30, according to Bloomberg data. FireKeepers Casino, owned by the Nottawaseppi Huron Band of Potawatomi, sold $340 million of seven-year senior secured notes at a yield of 13.875 percent, and Russian mobile phone company OAO VimpelCom raised $2 billion in the country's biggest sale of dollar-denominated debt.
Investors added $211 million to high-yield corporate bond funds, the fourth straight inflow, according to AMG Data Services in Arcata, California. That's the longest streak of inflows since October, AMG said.
High-yield spreads dropped 13 basis points this week to 692 basis points, the lowest since January, Merrill data show. Yield premiums reached a five-year high of 862 basis points on March 17. Junk bonds are rated below Baa3 by Moody's and BBB- by Standard & Poor's.
Non-financial investment grade issuers this week included Xerox Corp., the world's largest maker of high-speed color printers, with its record sale of $1.4 billion of 5- and 10-year notes, and Midwest utility Great River Energy, which issued $400 million of 30-year first-mortgage bonds.
BLOOMBERG
U.S. Economy: Consumer Sentiment Weakens More Than Anticipated
U.S. Economy: Consumer Sentiment Weakens More Than Anticipated
April 25 (Bloomberg) -- U.S. consumer confidence fell more than forecast in April to a 26-year low as record gasoline prices and rising unemployment threaten to reduce spending.
The Reuters/University of Michigan sentiment index decreased to 62.6, from 69.5 the previous month. The measure was down from a preliminary estimate of 63.2 issued on April 11.
Consumers are growing increasingly anxious because the economy has lost almost a quarter million jobs so far this year, the cost of refueling a car is up 17 percent and property values have fallen. Sales of houses and cars have declined as a result, contributing to a slowdown that may bring an end to the six-year expansion.
``Consumers are feeling the pinch, not only from the labor market, but also from prices,'' Aaron Smith, an economist at Moody's Economy.com in West Chester, Pennsylvania, said in a Bloomberg Television interview. ``There's a squeeze on incomes from two sides.''
Economists had forecast the consumer sentiment gauge would fall to 63.2 from 69.5 in March, according to the median of 60 projections in a Bloomberg News survey. Estimates ranged from a low of 62 to a high of 72.
The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, dropped to 53.3 from 60.1 last month.
Current Conditions
A measure of current conditions, which reflects Americans' perceptions of their financial situation and whether it's a good time to make big ticket purchases like cars, decreased to 77 from 84.2 last month.
Consumers were also more concerned about inflation. Americans thought prices would increase 4.8 percent over the next 12 months, up from a 4.3 percent estimate in March. Longer term, inflation was pegged at 3.2 percent, the highest level since August 2006 and compared with 2.9 percent last month.
The economy lost 80,000 jobs in March, the most in five years, following a 76,000 drop in payrolls in each of the prior two months, according to figures from the Labor Department. The jobless rate rose to 5.1 percent, the highest level in more than two years.
Rising fuel costs have contributed to a drop in auto sales and prompted some shoppers to limit trips to malls. The average price of regular unleaded gasoline rose to a record $3.58 a gallon yesterday, according to data from AAA.
Auto Sales
Cars and light trucks sold at an average 15.2 million annual pace in the first three months of the year, the fewest since the third quarter of 1998. Some 14.9 million autos will be sold this year, the fewest since 1995, Standard & Poor's forecast this month.
AutoNation Inc., the largest publicly traded U.S. car dealer, yesterday said first-quarter profit fell 35 percent as weak housing markets in states including California hurt demand for new vehicles.
``We expect to continue to see a challenging automotive retail market as long as the current economic difficulties persist,'' Chief Executive Officer Michael Jackson said in a statement.
Economists surveyed by Bloomberg earlier this month forecast consumer spending will rise at a 0.5 percent pace in the first half of the year, the smallest gain since 1991. The economy is unlikely to grow at all through June, the survey also showed.
Those polled put the odds of the economy entering a recession this year at 70 percent, up from 50 percent in the prior month's poll.
Falling Home Values
The biggest housing slump in a generation is leading the downturn. Home prices nationwide have fallen 10 percent from their peak, according to the S&P Case-Shiller home-price index, and many economists are forecasting values will keep dropping. Falling property prices make Americans feel less wealthy and reduce the amount of equity owners can tap for spending.
Rising foreclosures are also lifting stress levels. Foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier as rates on adjustable mortgages increased, Irvine, California-based RealtyTrac Inc., a seller of default data, said last week.
BLOOMBERG
April 25 (Bloomberg) -- U.S. consumer confidence fell more than forecast in April to a 26-year low as record gasoline prices and rising unemployment threaten to reduce spending.
The Reuters/University of Michigan sentiment index decreased to 62.6, from 69.5 the previous month. The measure was down from a preliminary estimate of 63.2 issued on April 11.
Consumers are growing increasingly anxious because the economy has lost almost a quarter million jobs so far this year, the cost of refueling a car is up 17 percent and property values have fallen. Sales of houses and cars have declined as a result, contributing to a slowdown that may bring an end to the six-year expansion.
``Consumers are feeling the pinch, not only from the labor market, but also from prices,'' Aaron Smith, an economist at Moody's Economy.com in West Chester, Pennsylvania, said in a Bloomberg Television interview. ``There's a squeeze on incomes from two sides.''
Economists had forecast the consumer sentiment gauge would fall to 63.2 from 69.5 in March, according to the median of 60 projections in a Bloomberg News survey. Estimates ranged from a low of 62 to a high of 72.
The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, dropped to 53.3 from 60.1 last month.
Current Conditions
A measure of current conditions, which reflects Americans' perceptions of their financial situation and whether it's a good time to make big ticket purchases like cars, decreased to 77 from 84.2 last month.
Consumers were also more concerned about inflation. Americans thought prices would increase 4.8 percent over the next 12 months, up from a 4.3 percent estimate in March. Longer term, inflation was pegged at 3.2 percent, the highest level since August 2006 and compared with 2.9 percent last month.
The economy lost 80,000 jobs in March, the most in five years, following a 76,000 drop in payrolls in each of the prior two months, according to figures from the Labor Department. The jobless rate rose to 5.1 percent, the highest level in more than two years.
Rising fuel costs have contributed to a drop in auto sales and prompted some shoppers to limit trips to malls. The average price of regular unleaded gasoline rose to a record $3.58 a gallon yesterday, according to data from AAA.
Auto Sales
Cars and light trucks sold at an average 15.2 million annual pace in the first three months of the year, the fewest since the third quarter of 1998. Some 14.9 million autos will be sold this year, the fewest since 1995, Standard & Poor's forecast this month.
AutoNation Inc., the largest publicly traded U.S. car dealer, yesterday said first-quarter profit fell 35 percent as weak housing markets in states including California hurt demand for new vehicles.
``We expect to continue to see a challenging automotive retail market as long as the current economic difficulties persist,'' Chief Executive Officer Michael Jackson said in a statement.
Economists surveyed by Bloomberg earlier this month forecast consumer spending will rise at a 0.5 percent pace in the first half of the year, the smallest gain since 1991. The economy is unlikely to grow at all through June, the survey also showed.
Those polled put the odds of the economy entering a recession this year at 70 percent, up from 50 percent in the prior month's poll.
Falling Home Values
The biggest housing slump in a generation is leading the downturn. Home prices nationwide have fallen 10 percent from their peak, according to the S&P Case-Shiller home-price index, and many economists are forecasting values will keep dropping. Falling property prices make Americans feel less wealthy and reduce the amount of equity owners can tap for spending.
Rising foreclosures are also lifting stress levels. Foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier as rates on adjustable mortgages increased, Irvine, California-based RealtyTrac Inc., a seller of default data, said last week.
BLOOMBERG
Ιταλία: Εντός 10 ημερών οι διευκρινίσεις στην Κομισιόν για την Alitalia
Ιταλία: Εντός 10 ημερών οι διευκρινίσεις στην Κομισιόν για την Alitalia
Εντός της διορίας των 10 εργάσιμων ημερών που θέτει η Κομισιόν θα καταθέσει η ιταλική κυβέρνηση «τις απαιτούμενες πληροφορίες» σχετικά με το δάνειο των 300 εκατομμυρίων ευρώ που αποφάσισε να χορηγήσει στην Αlitalia, όπως αναφέρεται σε ανακοίνωση από το γραφείου του απερχόμενου πρωθυπουργού Πρόντι.
Η Ευρωπαϊκή Επιτροπή εξέφρασε σήμερα «τις αμφιβολίες της για τη φύση της βοήθειας» της Ρώμης προς την αεροπορική εταιρεία που απειλείται με πτώχευση.
NAFTEMPORIKI
Εντός της διορίας των 10 εργάσιμων ημερών που θέτει η Κομισιόν θα καταθέσει η ιταλική κυβέρνηση «τις απαιτούμενες πληροφορίες» σχετικά με το δάνειο των 300 εκατομμυρίων ευρώ που αποφάσισε να χορηγήσει στην Αlitalia, όπως αναφέρεται σε ανακοίνωση από το γραφείου του απερχόμενου πρωθυπουργού Πρόντι.
Η Ευρωπαϊκή Επιτροπή εξέφρασε σήμερα «τις αμφιβολίες της για τη φύση της βοήθειας» της Ρώμης προς την αεροπορική εταιρεία που απειλείται με πτώχευση.
NAFTEMPORIKI
Πόσο κοντά στο Χ.Α. βρίσκεται η Marfin Real Estate
Πόσο κοντά στο Χ.Α. βρίσκεται η Marfin Real Estate
Την αξιοποίηση της ακίνητης περιουσίας του ομίλου Marfin θα συμπεριλάβει στο χαρτοφυλάκιό της η θυγατρική εταιρεία η Marfin Real Estate. Αυτό αναφέρουν πληροφορίες προσκείμενες στη διοίκηση η οποία προετοιμάζει την εισαγωγή της στο Χρηματιστήριο Αθηνών. Σύμφωνα με αυτές, η εταιρεία θα αγοράσει ακίνητα από τις εταιρείες-μέλη του επιχειρηματικού ομίλου (Vivartia, Υγεία κλπ.) που διαθέτει μεγάλη ακίνητη περιουσία. Η διοίκηση όπως αναφέρουν οι ίδιες πηγές βρίσκεται σε συζητήσεις με τράπεζες για να αναλάβουν ρόλο αναδόχου στην εισαγωγή. Σύμφωνα με ορισμένες πληροφορίες η MIG Real Estate επιδιώκει στην άντληση 150-200 εκατ. ευρώ ενώ σχεδιάζει και σύναψη ομολογιακού δανείου.
REPORTER.GR
Την αξιοποίηση της ακίνητης περιουσίας του ομίλου Marfin θα συμπεριλάβει στο χαρτοφυλάκιό της η θυγατρική εταιρεία η Marfin Real Estate. Αυτό αναφέρουν πληροφορίες προσκείμενες στη διοίκηση η οποία προετοιμάζει την εισαγωγή της στο Χρηματιστήριο Αθηνών. Σύμφωνα με αυτές, η εταιρεία θα αγοράσει ακίνητα από τις εταιρείες-μέλη του επιχειρηματικού ομίλου (Vivartia, Υγεία κλπ.) που διαθέτει μεγάλη ακίνητη περιουσία. Η διοίκηση όπως αναφέρουν οι ίδιες πηγές βρίσκεται σε συζητήσεις με τράπεζες για να αναλάβουν ρόλο αναδόχου στην εισαγωγή. Σύμφωνα με ορισμένες πληροφορίες η MIG Real Estate επιδιώκει στην άντληση 150-200 εκατ. ευρώ ενώ σχεδιάζει και σύναψη ομολογιακού δανείου.
REPORTER.GR
Subscribe to:
Posts (Atom)