HAA receives top ratings but waits for EC stamp of approval

By Aimee Donnellan

Fri Nov 30, 2012 10:35am EST

LONDON, Nov 30 (IFR) - A government-guaranteed subordinated Tier 2 bond for Austrian Hypo Alpe-Adria Bank, which will be the first of its kind, will surface as soon as the European Commission signs off on the guarantee, bankers said this week.

The issuer, which mandated Citigroup, Commerzbank, Deutsche Bank and Morgan Stanley last week for a EUR1bn 10-year subordinated deal, finishes its roadshow today for the trade, which has received preliminary Aaa/AA+/AAA ratings from the three major agencies, in line with the sovereign.

"We are waiting for the EC approval of the guarantee, which is expected in the second half of next week, so it's likely the deal will follow the week after," said a banker mandated on the upcoming transaction.

The expected rating of the notes is sensitive to changes in Austria's sovereign ratings: an Austrian downgrade would lead to a downgrade of the subordinated notes.

The leads said they will look at the sovereign, as well as explicitly government-guaranteed Austrian agencies OeBB and Asfinag, to calculate relative value.

OeBB's 4.875% June 2022 issue was bid at mid-swaps plus 24bp, according to Tradeweb data on Friday at 12.30GMT, while an interpolation of Asfinag's 3.375% July 2019s and September 2025s showed that a hypothetical November 2022 issue would trade around plus 19bp on the bid side.

Comparing these levels with Austria's 3.4% November 2022s, trading at a mid-asset swap level of 9.4bp on Tradeweb, shows that an Austrian agency would have to pay a premium of around 10bp-15bp to the sovereign to issue a new 10-year.

A banker on the deal said it makes sense to look at the aforementioned reference points but that it would be necessary to add an additional concession for a rare and lesser known issuer like HAA.

"Ultimately, investors should see this as the cheapest way to buy Austrian government-guaranteed risk and view it as a one-time event," said the banker.

"But beyond that, it is difficult to go into specifics at this stage."

Although 100% state-owned banks have raised Tier 2 debt in the market before, it is the first time that a government will explicitly guarantee a new subordinated debt issue from a wholly owned entity.

"The roadshow went pretty well and we are now just collecting data," said a banker.

"During the course of investor meetings, a number of people were keen to understand how the government guarantee will work but were positive about the prospects of a deal of this kind."

Under the terms of the issue, even if the bank were to go bust in five years and the bonds were written down to zero, Austria would continue to pay interest and principal.

Bankers said this was a way for the government to avoid using up liquidity in order to inject capital into the institution.

Austrian regulators have given the bank until the end of the year to come up with EUR1.5bn of extra capital and until the end of March 2013 to raise another EUR700m.

As well as the Tier 2, which will be sold to private investors, the state will directly inject cash into the bank. Domestic accounts are expected to provide the bulk of demand for the Hypo Alpe-Adria deal, said another lead manager.

(Reporting by Aimee Donnellan; additional reporting John Geddie; editing by Helene Durand & Philip Wright)

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AMR seeks to keep control over bankruptcy through March 11

By Nick Brown

NEW YORK | Fri Nov 30, 2012 1:04pm EST

NEW YORK Nov 30 (Reuters) - American Airlines' bankrupt parent has asked a judge to extend by six weeks, through March 11, the period in which it has the exclusive right to propose a plan to exit bankruptcy.

The request, made jointly with its creditors' committee, was filed on Friday in U.S. Bankruptcy Court in Manhattan. The current exclusive window is set to end on Jan. 28.

AMR Corp filed for bankruptcy a year ago in hopes of reducing its labor costs and returning to profitability.

Its smaller competitor, US Airways Group, is making a push to acquire it out of bankruptcy. AMR said earlier this year it would prefer to exit as a standalone company, but is discussing merger options, including with US Airways.

Friday's filing is a sign that discussions with creditors on how to bring AMR out of bankruptcy are progressing cooperatively, if a bit slower than initially expected.

"American and the [creditors' committee] believe that the proposed extensions will facilitate the expedition of the chapter 11 cases and benefit all parties in interest," the filing said.

The exclusivity period bars creditors and other parties from proposing their own plans for how AMR should exit bankruptcy.

That effectively blocks US Airways from making a hostile bid, as any merger plan unveiled during exclusivity would have to be proposed by AMR itself.

A hearing on the extension request is set for Dec. 19.

The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.

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UPDATE 2-AMR wants keep control over bankruptcy through March 11

Fri Nov 30, 2012 5:01pm EST

* Current exclusive window set to end Jan. 28

* Creditors would be barred from proposing restructuring plans

* US Airways in effect blocked from making hostile bid

By Nick Brown

NEW YORK, Nov 30 (Reuters) - American Airlines' bankrupt parent has asked a judge to extend by six weeks, through March 11, the period in which it has the exclusive right to propose a plan to exit bankruptcy.

The request, made jointly with its creditors' committee, was filed on Friday in U.S. Bankruptcy Court in Manhattan. The current exclusive window is set to end on Jan. 28.

AMR Corp filed for bankruptcy a year ago in hopes of reducing labor costs and returning to profitability.

Its smaller competitor, US Airways Group Inc, is making a push to acquire it out of bankruptcy. AMR said earlier this year it would prefer to exit as a standalone company, but is discussing merger options, including with US Airways.

Friday's filing is a sign that discussions with creditors on how to bring AMR out of bankruptcy are progressing cooperatively, if a bit slower than initially expected.

"American and the (creditors' committee) believe that the proposed extensions will facilitate the expedition of the chapter 11 cases and benefit all parties in interest," the filing said.

Sean Collins, a spokesman for American, said in a statement that the company "has made significant progress in its restructuring."

"The work, while progressing well, takes time," he said.

The exclusivity period bars creditors and other parties from proposing their own plans for how AMR should exit bankruptcy.

That effectively blocks US Airways from making a hostile bid, as any merger plan unveiled during exclusivity would have to be proposed by AMR itself.

AMR's pilots union, in the midst of bitter contract talks with the company, supports a US Airways merger and called Friday's extension request a sign that "things are proceeding in a positive way."

"We assume that the strategic alternative talks, which include US Airways, are functional," union spokesman Dennis Tajer said.

A hearing on the extension request is set for Dec. 19.

The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.

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HAA receives top ratings but waits for EC stamp of approval

By Aimee Donnellan

Fri Nov 30, 2012 10:35am EST

LONDON, Nov 30 (IFR) - A government-guaranteed subordinated Tier 2 bond for Austrian Hypo Alpe-Adria Bank, which will be the first of its kind, will surface as soon as the European Commission signs off on the guarantee, bankers said this week.

The issuer, which mandated Citigroup, Commerzbank, Deutsche Bank and Morgan Stanley last week for a EUR1bn 10-year subordinated deal, finishes its roadshow today for the trade, which has received preliminary Aaa/AA+/AAA ratings from the three major agencies, in line with the sovereign.

"We are waiting for the EC approval of the guarantee, which is expected in the second half of next week, so it's likely the deal will follow the week after," said a banker mandated on the upcoming transaction.

The expected rating of the notes is sensitive to changes in Austria's sovereign ratings: an Austrian downgrade would lead to a downgrade of the subordinated notes.

The leads said they will look at the sovereign, as well as explicitly government-guaranteed Austrian agencies OeBB and Asfinag, to calculate relative value.

OeBB's 4.875% June 2022 issue was bid at mid-swaps plus 24bp, according to Tradeweb data on Friday at 12.30GMT, while an interpolation of Asfinag's 3.375% July 2019s and September 2025s showed that a hypothetical November 2022 issue would trade around plus 19bp on the bid side.

Comparing these levels with Austria's 3.4% November 2022s, trading at a mid-asset swap level of 9.4bp on Tradeweb, shows that an Austrian agency would have to pay a premium of around 10bp-15bp to the sovereign to issue a new 10-year.

A banker on the deal said it makes sense to look at the aforementioned reference points but that it would be necessary to add an additional concession for a rare and lesser known issuer like HAA.

"Ultimately, investors should see this as the cheapest way to buy Austrian government-guaranteed risk and view it as a one-time event," said the banker.

"But beyond that, it is difficult to go into specifics at this stage."

Although 100% state-owned banks have raised Tier 2 debt in the market before, it is the first time that a government will explicitly guarantee a new subordinated debt issue from a wholly owned entity.

"The roadshow went pretty well and we are now just collecting data," said a banker.

"During the course of investor meetings, a number of people were keen to understand how the government guarantee will work but were positive about the prospects of a deal of this kind."

Under the terms of the issue, even if the bank were to go bust in five years and the bonds were written down to zero, Austria would continue to pay interest and principal.

Bankers said this was a way for the government to avoid using up liquidity in order to inject capital into the institution.

Austrian regulators have given the bank until the end of the year to come up with EUR1.5bn of extra capital and until the end of March 2013 to raise another EUR700m.

As well as the Tier 2, which will be sold to private investors, the state will directly inject cash into the bank. Domestic accounts are expected to provide the bulk of demand for the Hypo Alpe-Adria deal, said another lead manager.

(Reporting by Aimee Donnellan; additional reporting John Geddie; editing by Helene Durand & Philip Wright)

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AMR seeks to keep control over bankruptcy through March 11

By Nick Brown

NEW YORK | Fri Nov 30, 2012 1:04pm EST

NEW YORK Nov 30 (Reuters) - American Airlines' bankrupt parent has asked a judge to extend by six weeks, through March 11, the period in which it has the exclusive right to propose a plan to exit bankruptcy.

The request, made jointly with its creditors' committee, was filed on Friday in U.S. Bankruptcy Court in Manhattan. The current exclusive window is set to end on Jan. 28.

AMR Corp filed for bankruptcy a year ago in hopes of reducing its labor costs and returning to profitability.

Its smaller competitor, US Airways Group, is making a push to acquire it out of bankruptcy. AMR said earlier this year it would prefer to exit as a standalone company, but is discussing merger options, including with US Airways.

Friday's filing is a sign that discussions with creditors on how to bring AMR out of bankruptcy are progressing cooperatively, if a bit slower than initially expected.

"American and the [creditors' committee] believe that the proposed extensions will facilitate the expedition of the chapter 11 cases and benefit all parties in interest," the filing said.

The exclusivity period bars creditors and other parties from proposing their own plans for how AMR should exit bankruptcy.

That effectively blocks US Airways from making a hostile bid, as any merger plan unveiled during exclusivity would have to be proposed by AMR itself.

A hearing on the extension request is set for Dec. 19.

The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.

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UPDATE 2-AMR wants keep control over bankruptcy through March 11

Fri Nov 30, 2012 5:01pm EST

* Current exclusive window set to end Jan. 28

* Creditors would be barred from proposing restructuring plans

* US Airways in effect blocked from making hostile bid

By Nick Brown

NEW YORK, Nov 30 (Reuters) - American Airlines' bankrupt parent has asked a judge to extend by six weeks, through March 11, the period in which it has the exclusive right to propose a plan to exit bankruptcy.

The request, made jointly with its creditors' committee, was filed on Friday in U.S. Bankruptcy Court in Manhattan. The current exclusive window is set to end on Jan. 28.

AMR Corp filed for bankruptcy a year ago in hopes of reducing labor costs and returning to profitability.

Its smaller competitor, US Airways Group Inc, is making a push to acquire it out of bankruptcy. AMR said earlier this year it would prefer to exit as a standalone company, but is discussing merger options, including with US Airways.

Friday's filing is a sign that discussions with creditors on how to bring AMR out of bankruptcy are progressing cooperatively, if a bit slower than initially expected.

"American and the (creditors' committee) believe that the proposed extensions will facilitate the expedition of the chapter 11 cases and benefit all parties in interest," the filing said.

Sean Collins, a spokesman for American, said in a statement that the company "has made significant progress in its restructuring."

"The work, while progressing well, takes time," he said.

The exclusivity period bars creditors and other parties from proposing their own plans for how AMR should exit bankruptcy.

That effectively blocks US Airways from making a hostile bid, as any merger plan unveiled during exclusivity would have to be proposed by AMR itself.

AMR's pilots union, in the midst of bitter contract talks with the company, supports a US Airways merger and called Friday's extension request a sign that "things are proceeding in a positive way."

"We assume that the strategic alternative talks, which include US Airways, are functional," union spokesman Dennis Tajer said.

A hearing on the extension request is set for Dec. 19.

The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.

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HAA receives top ratings but waits for EC stamp of approval

By Aimee Donnellan

Fri Nov 30, 2012 10:35am EST

LONDON, Nov 30 (IFR) - A government-guaranteed subordinated Tier 2 bond for Austrian Hypo Alpe-Adria Bank, which will be the first of its kind, will surface as soon as the European Commission signs off on the guarantee, bankers said this week.

The issuer, which mandated Citigroup, Commerzbank, Deutsche Bank and Morgan Stanley last week for a EUR1bn 10-year subordinated deal, finishes its roadshow today for the trade, which has received preliminary Aaa/AA+/AAA ratings from the three major agencies, in line with the sovereign.

"We are waiting for the EC approval of the guarantee, which is expected in the second half of next week, so it's likely the deal will follow the week after," said a banker mandated on the upcoming transaction.

The expected rating of the notes is sensitive to changes in Austria's sovereign ratings: an Austrian downgrade would lead to a downgrade of the subordinated notes.

The leads said they will look at the sovereign, as well as explicitly government-guaranteed Austrian agencies OeBB and Asfinag, to calculate relative value.

OeBB's 4.875% June 2022 issue was bid at mid-swaps plus 24bp, according to Tradeweb data on Friday at 12.30GMT, while an interpolation of Asfinag's 3.375% July 2019s and September 2025s showed that a hypothetical November 2022 issue would trade around plus 19bp on the bid side.

Comparing these levels with Austria's 3.4% November 2022s, trading at a mid-asset swap level of 9.4bp on Tradeweb, shows that an Austrian agency would have to pay a premium of around 10bp-15bp to the sovereign to issue a new 10-year.

A banker on the deal said it makes sense to look at the aforementioned reference points but that it would be necessary to add an additional concession for a rare and lesser known issuer like HAA.

"Ultimately, investors should see this as the cheapest way to buy Austrian government-guaranteed risk and view it as a one-time event," said the banker.

"But beyond that, it is difficult to go into specifics at this stage."

Although 100% state-owned banks have raised Tier 2 debt in the market before, it is the first time that a government will explicitly guarantee a new subordinated debt issue from a wholly owned entity.

"The roadshow went pretty well and we are now just collecting data," said a banker.

"During the course of investor meetings, a number of people were keen to understand how the government guarantee will work but were positive about the prospects of a deal of this kind."

Under the terms of the issue, even if the bank were to go bust in five years and the bonds were written down to zero, Austria would continue to pay interest and principal.

Bankers said this was a way for the government to avoid using up liquidity in order to inject capital into the institution.

Austrian regulators have given the bank until the end of the year to come up with EUR1.5bn of extra capital and until the end of March 2013 to raise another EUR700m.

As well as the Tier 2, which will be sold to private investors, the state will directly inject cash into the bank. Domestic accounts are expected to provide the bulk of demand for the Hypo Alpe-Adria deal, said another lead manager.

(Reporting by Aimee Donnellan; additional reporting John Geddie; editing by Helene Durand & Philip Wright)

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AMR seeks to keep control over bankruptcy through March 11

By Nick Brown

NEW YORK | Fri Nov 30, 2012 1:04pm EST

NEW YORK Nov 30 (Reuters) - American Airlines' bankrupt parent has asked a judge to extend by six weeks, through March 11, the period in which it has the exclusive right to propose a plan to exit bankruptcy.

The request, made jointly with its creditors' committee, was filed on Friday in U.S. Bankruptcy Court in Manhattan. The current exclusive window is set to end on Jan. 28.

AMR Corp filed for bankruptcy a year ago in hopes of reducing its labor costs and returning to profitability.

Its smaller competitor, US Airways Group, is making a push to acquire it out of bankruptcy. AMR said earlier this year it would prefer to exit as a standalone company, but is discussing merger options, including with US Airways.

Friday's filing is a sign that discussions with creditors on how to bring AMR out of bankruptcy are progressing cooperatively, if a bit slower than initially expected.

"American and the [creditors' committee] believe that the proposed extensions will facilitate the expedition of the chapter 11 cases and benefit all parties in interest," the filing said.

The exclusivity period bars creditors and other parties from proposing their own plans for how AMR should exit bankruptcy.

That effectively blocks US Airways from making a hostile bid, as any merger plan unveiled during exclusivity would have to be proposed by AMR itself.

A hearing on the extension request is set for Dec. 19.

The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.

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UPDATE 2-AMR wants keep control over bankruptcy through March 11

Fri Nov 30, 2012 5:01pm EST

* Current exclusive window set to end Jan. 28

* Creditors would be barred from proposing restructuring plans

* US Airways in effect blocked from making hostile bid

By Nick Brown

NEW YORK, Nov 30 (Reuters) - American Airlines' bankrupt parent has asked a judge to extend by six weeks, through March 11, the period in which it has the exclusive right to propose a plan to exit bankruptcy.

The request, made jointly with its creditors' committee, was filed on Friday in U.S. Bankruptcy Court in Manhattan. The current exclusive window is set to end on Jan. 28.

AMR Corp filed for bankruptcy a year ago in hopes of reducing labor costs and returning to profitability.

Its smaller competitor, US Airways Group Inc, is making a push to acquire it out of bankruptcy. AMR said earlier this year it would prefer to exit as a standalone company, but is discussing merger options, including with US Airways.

Friday's filing is a sign that discussions with creditors on how to bring AMR out of bankruptcy are progressing cooperatively, if a bit slower than initially expected.

"American and the (creditors' committee) believe that the proposed extensions will facilitate the expedition of the chapter 11 cases and benefit all parties in interest," the filing said.

Sean Collins, a spokesman for American, said in a statement that the company "has made significant progress in its restructuring."

"The work, while progressing well, takes time," he said.

The exclusivity period bars creditors and other parties from proposing their own plans for how AMR should exit bankruptcy.

That effectively blocks US Airways from making a hostile bid, as any merger plan unveiled during exclusivity would have to be proposed by AMR itself.

AMR's pilots union, in the midst of bitter contract talks with the company, supports a US Airways merger and called Friday's extension request a sign that "things are proceeding in a positive way."

"We assume that the strategic alternative talks, which include US Airways, are functional," union spokesman Dennis Tajer said.

A hearing on the extension request is set for Dec. 19.

The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.

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UPDATE 1-Hostess liquidation draws scores of potential bidders

Thu Nov 29, 2012 3:40pm EST

By Tom Hals

Nov 29 (Reuters) - Hostess Brands Inc, the bankrupt maker of Twinkies snack cakes, received court permission to wind down its 82-year-old business on Thursday but revealed "furious" interest in its iconic brands from potential buyers.

New York Bankruptcy Court Judge Robert Drain approved the final orders that cleared the way for the company to begin selling its assets, everything from brands such as Ding Dongs and Twinkies to baking equipment and real estate.

"It's undisputed they will be worth more moving down this path," Drain said of the wind-down plan.

Around 110 potential bidders have contacted the company about bidding for at least part of its business, and 70 had enough interest to sign confidentiality agreements, Hostess' banker told the hearing in White Plains, New York.

Joshua Scherer of Perella Weinberg, who was hired by Hostess to sell its assets, said that six potential bidders have hired large investment banks to help them.

"It's very significant because it indicates to me that not only are these buyers serious, but they are expecting to spend substantial sums," said Scherer. He said the liquidation could raise $1 billion.

Scherer described the level of incoming calls from potential bidders as "fast and furious." Interested parties include large national retailers and overseas buyers that wanted to bring Hostess brands to India, he said.

By early January, the company expects to have initial bids for its various brands, which will then be put to auction.

Money raised from the sale of assets will help Hostess repay its creditors. It has about $900 million of secured debt and faces up to about $150 million of administrative claims.

Scherer said last week that Hostess could be worth $2.3 billion to $2.4 billion in a normal bankruptcy, an amount equal to its annual revenue.

Hostess abandoned its initial plan to reorganize as an ongoing business and decided to liquidate on Nov. 16, saying it was losing about $1 million per day after the Bakery, Confectionery, Tobacco and Grain Millers Union, representing close to one-third of its workers, went on strike a week earlier.

Drain expressed frustration with the bakers' union earlier this month for striking. The union walked out after Drain authorized Hostess to impose pay and benefit cuts, which the International Brotherhood of Teamsters, Hostess' largest union, had accepted.

His frustration burst into the open again on Thursday and he briefly shouted at the bakers' attorney, Ancela Nastasi, after he questioned her approach in questioning witnesses.

"I have to wonder, again ... what your clients' basis is for whatever they are doing here. I just don't get it," he said.

The case is In re: Hostess Brands Inc et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.

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