Shanghai launches latest bad loan bank - report

SHANGHAI, March 7 Thu Mar 6, 2014 8:53pm EST

SHANGHAI, March 7 (Reuters) - The Shanghai government has approved a city-owned investment company to buy non-performing loans from local banks, state media reported on Friday, becoming the latest Chinese local government bracing for an expected rise in bad debt.

Shanghai's launch of a dedicated "bad loan bank" follows similar moves by the wealthy eastern provinces of Jiangsu and Zhejiang. Analysts expect a rise in bad loans in the coming years as China's economy slows, with loans to local governments and industries suffering from overcapacity a key source of concern.

Unlike earlier bad loan banks, Shanghai has authorised an existing state-owned firm, Shanghai State-owned Assets Operation Co Ltd, to purchase non-performing loans and other assets from local financial institutions, rather than creating a new entity, China Business News reported, citing a source close to the firm's parent company.

Shanghai State-owned Assets already owns equity in local banks including Bank of Shanghai, Shanghai Rural Commercial Bank, and the brokerage Guotai Junan Securities.

The central government established four national-level asset management companies (AMCs) in 1999 to clear off bad loans from the biggest state-owned banks. They purchased about 2.38 trillion yuan in bad loans between 1999 and 2008.

In 2012 the Ministry of Finance authorized local governments to establish local AMCs to do the same for local banks.

The first bad-loan purchase by Shanghai State-owned Assets may be bank loans to Shanghai Chaori Solar Energy Science and Technology Co Ltd, the loss-making solar equipment producer that is also poised to default on a bond interest payment on Friday, becoming China's first-ever domestic bond default, the paper reported.

Bank of Shanghai is involved in a dispute with Chaori over 75 million yuan in outstanding loans outstanding, the paper reported. It also has 600 million yuan outstanding to Suntech Power Holdings Co Ltd, another struggling solar firm that has defaulted on its offshore bonds.

• Link this
• Share this
• Digg this
• Email
• Print
• Reprints

16.47 | 0 komentar | Read More

CORRECTED-Bitcoin true believers unfazed by losses in Mt. Gox collapse

Thu Mar 6, 2014 10:01pm EST

(Corrects paragraph 3 to 'about 1,000 investors', not '10,000')

* Investors drawn to transparency, lack of official control

* Bitcoin's value spiked, crashed, took off again last year

* Enthusiast wants widespread use before 2020 Tokyo Olympics

By Kevin Krolicki and Nathan Layne

TOKYO, Feb 28 (Reuters) - Like other bitcoin evangelists, Ken Shishido is ready to write off the money he lost in the bankruptcy of Tokyo-based virtual currency exchange Mt. Gox as the price of revolutionising global finance.

"In the early days of the automobile, there were traffic accidents because you didn't have traffic lights or pedestrian crossings," he said hours after Mt. Gox said on Friday it had lost up to half a billion dollars of investor funds, including some of his own. "But we didn't ban automobiles."

Shishido, who lives in Tokyo, was one of about 1,000 investors in Japan who became creditors in Mt. Gox's bankruptcy when the company capped a tumultuous period of weeks by filing for bankruptcy on Friday.

He lost about a tenth of his investment in bitcoin in Mt. Gox, he said, and expected none of that money to come back.

Early enthusiasts for the five-year-old crypto-currency were drawn to its revolutionary ideals of transparency and a lack of central or official control. There was also a heady mix of geek chic - the currency is "mined" through a process involving complex computer math - and laissez-faire Austrian economics.

Mt. Gox's loss is eye-popping but so too is the number of creditors - 127,000 - in what had been the world's biggest exchange. That means the average trader lost the equivalent of $3,500 in the bankruptcy at current bitcoin prices, assuming no money is recovered in the court-supervised restructuring in Tokyo set to play out over the following months.

VALUE SPIKES, CRASHES, TAKES OFF AGAIN

Bitcoin's value spiked in April 2013 as the crisis-racked Cyprus government clamped down on withdrawals and seized deposits, rattling faith in "fiat" currencies.

The crypto-currency soon crashed back. Late last year, as the number of exchanges and the virtual money's name recognition grew, it took off again.

Bitcoin gained wider acceptance - and took off again in price - late last year. It attracted high-profile proponents, like the investor twins Cameron and Tyler Winklevoss of Facebook fame, and speculators.

Investors interviewed after the exchange collapsed faulted the Tokyo exchange and Mt. Gox's French CEO Mark Karpeles, but they remained committed to the bitcoin idea.

Roger Ver, a big investor in Mt. Gox, said he did not know if he would ever get any of his lost bitcoin back.

"But the important thing to realize is that Mt. Gox is just one company using bitcoin. The bitcoin technology itself is still absolutely amazing," he said.

"Even if one email service provider is having a problem that doesn't mean people are going to stop using email. It's the same with bitcoin."

POSITIVE VIEW

Ver spoke of "all of the positive ways in which bitcoin is going to change the world ... if anything, it is kind of for the better of bitcoin that the irresponsible players are going out of business."

Shishido said he does not expect to get his virtual money back, but that the rest of his bitcoin investments had soared 10-fold in value.

Keiichi Hida, a bitcoin investor and member of the Japan Digital Money Association, lost 100,000 yen ($980) worth of bitcoins, which he got involved with as a form of "study". But he was unfazed.

"We should make it a national project to have bitcoin used nationwide at the time of the 2020 Tokyo Olympics," he said. "I think then everyone would come to Tokyo in an instant."

Mt. Gox CEO Karpeles, even after bowing to apologise for the exchange's bankruptcy, later said the currency will endure. "The bitcoin industry is continuing and the most important thing now is to limit the impact of (Mt Gox's collapse) on that" ($1 = 102.0850 Japanese yen) (Additional reporting by Emi Emoto; Writing by William Mallard; Editing by Tom Heneghan)

• Link this
• Share this
• Digg this
• Email
• Print
• Reprints

16.47 | 0 komentar | Read More

Detroit reaches $120 mln loan deal with Barclays

March 6 Thu Mar 6, 2014 10:17pm EST

March 6 (Reuters) - Detroit said in a court filing on Thursday it had reached an agreement with Barclays PLC for a $120 million loan that would allow it to invest in services and speed its path out of bankruptcy.

The deal comes after the judge overseeing Detroit's historic bankruptcy case rejected a $350 million loan that would have raised $230 million for the city to end interest rate swaps. Those swaps were used to hedge interest rate risk on some Detroit pension debt.

The city said earlier this week it had reached a new agreement with Merrill Lynch Capital Services and UBS AG to end the swaps for $85 million. Two prior proposed deals with bigger price tags were rejected by U.S. Bankruptcy Judge Steven Rhodes.

If the new agreement is approved by Rhodes, it would give Detroit access to revenue from casino taxes that had been pledged as collateral for the swaps. It could also give the city leverage in efforts to win court approval for the city's plan to restructure its debt.

Under terms of the agreement with Barclays, which also requires court approval, Detroit would no longer pledge the casino tax revenues, which are crucial to helping the city get back on its feet as it restructures its debt. Instead, collateral would consist of income tax revenue and the proceeds of asset sales except for property of the Detroit Institute of Art.

16.47 | 0 komentar | Read More

Market Chatter- Corporate finance press digest

March 6 Wed Mar 5, 2014 11:05pm EST

March 6 (Reuters) - The following corporate finance-related stories were reported by media:

* An investor group led by buyout firm HIG Capital is poised to buy the financially troubled Nuerburgring race track, two sources familiar with the transaction said on Wednesday.

* Pizza chain Sbarro LLC could file for Chapter 11 protection by as early as Sunday, the Wall Street Journal reported, citing people familiar with the matter.

* India's Tata Motors and Chinese carmaker Chery Automobile are holding talks to explore possible tie-ups, which may include sharing of vehicle platforms, getting access to the market in China for Tata Motors and even helping Chery to enter India, the Economic Times reported, citing people with knowledge of the matter. ()

* Private-equity firm Cerberus Capital Management LP is working to sew up a deal to buy Safeway Inc this week, though its efforts to do so have been complicated by supermarket giant Kroger Co, the Wall Street Journal reported, citing people familiar with the matter. ()

* Deutsche Telekom AG Chief Executive Officer Timotheus Hoettges told directors on Wednesday that a sale of the T-Mobile US Inc unit is less likely in the near term because of regulatory hurdles, the Bloomberg News reported, citing two people with direct knowledge of the matter.

* Telefonica SA is nearing an agreement to buy Promotora de Informaciones SA's controlling stake in its pay-TV business for about 800 million euros ($1.10 billion), the Bloomberg News reported, citing people familiar with the matter.

* Japanese spirits giant Suntory is advancing to acquire a 26 percent stake in the recently demerged brands, distribution and sales arm of Radico Khaitan for 4.5 billion rupees to 5 billion rupees ($72.94 million-$81.04 million), the Times of India reported, citing people familiar with the matter. ()

For the Morning News Call-EMEA newsletter click on

• Link this
• Share this
• Digg this
• Email
• Print
• Reprints

16.48 | 0 komentar | Read More

UPDATE 1-Market Chatter-Corporate finance press digest

Thu Mar 6, 2014 12:55am EST

March 6 (Reuters) - The following corporate finance-related stories were reported by media:

* An investor group led by buyout firm HIG Capital is poised to buy the financially troubled Nuerburgring race track, two sources familiar with the transaction said on Wednesday.

* AC Milan, the seven-time European soccer champion owned by former Italian Prime Minister Silvio Berlusconi, is weighing a sale, Bloomberg News reported, citing three people with knowledge of the matter. ()

* Pizza chain Sbarro LLC could file for Chapter 11 protection by as early as Sunday, the Wall Street Journal reported, citing people familiar with the matter.

* India's Tata Motors and Chinese carmaker Chery Automobile are holding talks to explore possible tie-ups, which may include sharing of vehicle platforms, getting access to the market in China for Tata Motors and even helping Chery to enter India, the Economic Times reported, citing people with knowledge of the matter. ()

* Private-equity firm Cerberus Capital Management LP is working to sew up a deal to buy Safeway Inc this week, though its efforts to do so have been complicated by supermarket giant Kroger Co, the Wall Street Journal reported, citing people familiar with the matter. ()

* Deutsche Telekom AG Chief Executive Officer Timotheus Hoettges told directors on Wednesday that a sale of the T-Mobile US Inc unit is less likely in the near term because of regulatory hurdles, the Bloomberg News reported, citing two people with direct knowledge of the matter.

* Telefonica SA is nearing an agreement to buy Promotora de Informaciones SA's controlling stake in its pay-TV business for about 800 million euros ($1.10 billion), the Bloomberg News reported, citing people familiar with the matter.

* Japanese spirits giant Suntory is advancing to acquire a 26 percent stake in the recently demerged brands, distribution and sales arm of Radico Khaitan for 4.5 billion rupees to 5 billion rupees ($72.94 million-$81.04 million), the Times of India reported, citing people familiar with the matter. ()

For the Morning News Call-EMEA newsletter click on

• Link this
• Share this
• Digg this
• Email
• Print
• Reprints

16.48 | 0 komentar | Read More

Germany's solar sell-off: picking up the remaining pieces

Thu Mar 6, 2014 3:00am EST

* Germany a hunting ground for foreign solar investors

* Demand stoked by wave of insolvencies

* Analysts see larger conglomerates as driving force

* Solar market set to pick up globally

By Christoph Steitz

FRANKFURT, March 6 (Reuters) - Foreign investors are looking to snap up what is left of Germany's once-booming solar industry, in time to benefit from an expected global recovery in the sector.

During the last decade, Germany pioneered the solar industry by throwing billions of euros in subsidies at it, making it the world's largest market for solar panels in the process.

But a massive shakeout during the last three years, triggered by plunging state support for solar energy, led to a wave of insolvency filings and turned Germany into a hunting ground for foreign investors looking to buy assets - from solar panel factories to retail operations - on the cheap.

A diverse group of parties, including small boutique outfits and large industrial conglomerates, has emerged, and analysts believe they will remain in the chase for Germany's insolvent solar groups, lured by engineering expertise and strong brands as well as an expanding market.

According to estimates from industry association EPIA, the global market for solar panels is set to increase by between 13 and 19 percent over the next three years, compared with just 2.3 percent in 2012.

Annual growth rates peaked at 160 percent during the boom years of 2007 to 2011.

"It's quite ironic that Germany's solar industry now ends up as prey after fuelling the sector's growth for years. And we haven't seen the end of it," said Ash Sharma, senior director at research firm IHS.

Sharma said he expected conglomerates to be the driving force behind the consolidation, pointing to recent transactions including last year's takeover of U.S.-based Power-One by Swiss ABB and General Electric's acquisition of a stake in solar company First Solar.

GE and ABB both declined to comment when asked whether they were interested in buying solar assets in Germany.

Meanwhile, new assets have appeared. Germany's SAG Solarstrom, which builds and operates solar power plants, and Centrosolar both filed for insolvency late last year.

The latter said last week it was looking for a buyer for Renusol, a unit that makes solar module mounting systems.

DRAMATIC SHIFT

In their search for cheap assets, investors' main focus is on German expertise in engineering and technology, as well as global sales operations, developed during the last decade when the industry was awash with lavish subsidies.

Germany's Conergy is a case in point.

Once Europe's largest solar company by sales, Conergy last year succumbed to the global shakeout and filed for insolvency, having suffered for years from cheaper Asian rivals and plunging feed-in tariffs in Germany.

"The last three years have been quite dramatic for the whole sector," said Philip Comberg, Conergy's former chief executive. "Nearly all of Germany's large solar group had to undergo massive restructuring," he added.

Following the collapse, Conergy was split up and sold in parts, with it module production plant in eastern Germany being snapped up by Chinese manufacturer Astronergy last year, keen on the company's "made in Germany" premium.

Even though about a quarter of the plant's workforce was cut at the time, the acquisition was actually welcomed by many in a region that has high unemployment.

Most of Conergy's global sales operations, however, went to Kawa, a U.S.-based investor, in a bid to gain access to countries including Australia, Britain, Thailand, Canada and the United States.

"Conergy is the BMW of solar," said Andrew de Pass, partner at Kawa, referring to Germany's benchmark status in the automotive sector.

"We bought Conergy because it has know-how, expertise and a proven track record which is unique," he added.

• Link this
• Share this
• Digg this
• Email
• Print
• Reprints

16.48 | 0 komentar | Read More

Law firm Patton Boggs engages former Dewey restructuring adviser

By Casey Sullivan and Nick Brown

NEW YORK, March 4 Tue Mar 4, 2014 9:37pm EST

NEW YORK, March 4 (Reuters) - Beleaguered Washington D.C. law and lobbying firm Patton Boggs is working with restructuring lawyers as it deals with waning revenue and continues to discuss a merger with a larger law firm, according to people familiar with the matter.

Al Togut, the bankruptcy and restructuring lawyer who advised the law firm Dewey & LeBoeuf before its collapse in 2012, and through its subsequent Chapter 11, has been consulted by the 400-lawyer Patton Boggs, said two of the sources who declined to be named because the matter is not public.

One of the sources said Togut has been formally retained. Togut could not be reached for comment.

Patton Boggs managing partner Edward Newberry did not confirm or deny the hiring of Togut. He said in an email that Reuters was "barking up the wrong tree" by asking about the matter.

"The suggestion that bankruptcy is an issue is so far from the mark as to be laughable," he said without giving any further details.

The hiring of Togut does not necessarily mean Patton Boggs is planning a bankruptcy filing. For example, the firm could be looking for additional legal help on restructuring the firm's business, the sources said.

"If the partners stay, the firm will survive," one of the sources said. "If the partners go, there will be a bankruptcy. It's all up to them."

Togut's engagement is the latest development highlighting the precarious financial situation at Patton Boggs. Over the past year the firm has conducted layoffs of at least 110 lawyers and staff, asking under-producing partners to leave and revamping its compensation system.

In 2012 and 2013, the firm saw its revenue slide after major cases settled, including the defense of New York City amid claims arising from contractors who suffered while responding to the Sept. 11 attacks.

In January, the firm reported to partners that 2013 revenue was $278 million, a 12 percent drop from the previous year, according to an analysis of figures in an internal memo obtained by Reuters.

A Patton Boggs spokesman on Tuesday confirmed a report in the Wall Street Journal that it had hired financial advisers, including restructuring firm Zolfo Cooper.

On Feb. 26, the 1,300-lawyer, global law firm Squire Sanders announced that it was in merger talks with Patton Boggs following a Reuters inquiry about the possible deal. Two months earlier, merger talks between Patton Boggs and the larger Texas firm Locke Lord were called off after starting in October.

(Reporting By Casey Sullivan, Nick Brown and Tom Hals; Editing by Ted Botha and Miral Fahmy)

• Link this
• Share this
• Digg this
• Email
• Print
• Reprints

16.47 | 0 komentar | Read More

Santander tests investor interest for inaugural AT1 bond

By Aimee Donnellan

Wed Mar 5, 2014 2:54am EST

LONDON, March 5 (IFR) - Banco Santander, the eurozone's largest bank by market share, is testing interest on its debut Additional Tier 1 bond at mid to high 6% as it seeks to replicate a structure used by other Spanish banks as they storm ahead in the race for capital.

The perpetual non-call five-year note is expected to price later on Wednesday. The bank is rated Baa1/BBB/BBB+ by Moody's/S&P/Fitch, with the notes expected to be Ba2 by Moody's.

The lead managers are Bank of America Merrill Lynch, Citigroup, Santander and UBS.

Spain is one of the few countries in Europe where there is enough clarity on tax treatment for banks to issue AT1 bonds. BBVA and Banco Popular Espanol have made the most of this, raising capital to fortify their balance sheets and improve their leverage ratios.

Santander is keeping it simple and is using the tried and tested perpetual non-call five-year equity convertible structure used by both of the aforementioned banks. Like the others, the bond will trigger if the bank's Common Equity Tier 1 (CET1) ratio falls below 5.125% at the bank or group level.

As of the end of 2013, Santander's CET1 ratio stood at 10.45% at the group level and 12.26% at the bank level.

By opting for the euro market, Santander will benefit from a deepening pool of investor demand for this type of product, which most recently saw country peer BBVA attract EUR14bn of orders from over 600 investors for a EUR1.5bn issue that priced with a 7% coupon.

That bond is deemed to be the most relevant market for pricing and was bid to yield at 6.5% according to multiple sources who believe that the Santander's more diversified business model means it might be able to price through its country peer.

That isn't the case in the senior and covered bond market where both issuer's debt trades flat to each other.

For its part, Santander wrapped up a two-day roadshow on Tuesday where it built a "staggering" shadow order book according to one capital expert.

"Investors have been very constructive on Santander and seeing as the market is so strong and Spain is in vogue I think this will go very well," said the banker. (Reporting By Aimee Donnellan, editing by Julian Baker)

• Link this
• Share this
• Digg this
• Email
• Print
• Reprints

16.47 | 0 komentar | Read More

Danske Bank to price inaugural AT1 with 5.75% coupon

By Helene Durand

Wed Mar 5, 2014 4:21am EST

LONDON, March 5 (IFR) - Danske Bank is set to price its inaugural Additional Tier 1 issue with a 5.75% coupon on the back of overwhelming interest for the trade.

The Danish lender began marketing the issue, which is expected to be rated BB+/BB+ by S&P/Fitch, at 6% area on Wednesday morning, but this has now been revised tighter.

The order book is now closed and the expected EUR750m perpetual non-call April 2020 issue will be priced later today.

Bank of America Merrill Lynch, BNP Paribas, Danske Bank, Goldman Sachs, HSBC and JP Morgan are leading the issue, which will be temporarily written down if the issuer's and/or the group's Common Equity Tier 1 ratio falls below 7% on a transitional basis. (Reporting by Helene Durand, editing by Julian Baker)

16.47 | 0 komentar | Read More

Nationwide tests interest for first sterling Additional Tier 1 bond

By Aimee Donnellan

Tue Mar 4, 2014 3:12am EST

LONDON, March 4 (IFR) - Nationwide Building Society is testing interest for the first sterling-denominated Additional Tier 1 bond at 7.25%-7.5%, according to a lead.

The benchmark-sized deal is perpetual but will be callable for the first time on 20th June 2019, and will be triggered if Nationwide's fully-phased Common Equity Tier 1 ratio falls below 7%. In the case of such an event, the securities will be converted in full into CCDS.

The bond is expected to be priced later today via joint lead managers Citigroup, Deutsche Bank, RBS and UBS.

16.47 | 0 komentar | Read More