Today - Monday, December 9, 2013
1:05 PMJGW unit cuts interest expense by 200 basis points
- JGWPT Holdings (JGW +0.4%) subsidiary Orchard Acquisition cuts the margin on its term loans by 150 basis points and reduces the interest rate floors on the loans by 50 basis points. The company also modified the prepayment penalty agreement, allowing the repayment of $123M with proceeds from last month's IPO.
- The lower rate and paydown should reduce annual interest payments by about $20M.
- Previous: Sell-side coverage launches last week with five buys from the underwriters.
- Press release
11:37 AMHilton reportedly moving IPO up a day
- Amid strong demand from investors, Blackstone's (BX +1.4%) Hilton Worldwide (HLT) is moving its IPO ahead by a day to after the close on Wednesday, reports the WSJ.
- Should the stock price at the top of its anticipated $18-$21 range, the company would raise $2.7B with which to pay down debt and cash out stakes of some who took part in the 2010 debt restructuring.
11:18 AMFormer WaMu soars after KKR investment| Comment!
9:52 AMSL Green in three retail transactions
- SL Green (SLG -0.7%) completes the "retail repositioning" of 747 Madison Avenue and brings it to 100% occupancy after signing a lease with a major European fashion house.
- SL Green is also conveying its 33.3% stake in the retail co-op at 747 Madison, valuing the asset at $160M, and conveying its 50% stake in the retail stores at 21-29 West 34th Street, valuing the entire property at $195M.
- SL Green is also making a $100M structured investment in conjunction with Jeff Sutton's JV at 530-536 Broadway.
- Press release
9:17 AMP-E steps in as Lloyds unloads assets
- Lloyds (LYG) exits more noncore assets, selling a portfolio of U.K. commercial loans to Cerberus for £90M n cash.
- Late last week, the bank sold a portfolio of poorly-performing Irish mortgages to Apollo Group for £257M. This group of assets generated losses of £33M a year ago. Noncore assets at Lloyds fell by £12.6B in Q3 to about £70B, and the bank hopes to bring the figure down to £66B by year end.
8:59 AMRBC boosted, Scotiabank cut at National Bank
- Following Canadian bank earnings last week, Royal Bank of Canada (RY) is boosted to Buy at National Bank, with price target hiked to $75. The team removes Scotiabank (BNS) from the Buy list, downgrading to Hold.
- Scotiabank also appears to have been downgraded by ... Scotiabank, which now rates the stock a Hold with $68 price target.
8:53 AMEssex and BRE in exclusive negotiations
- Essex Property Trust (ESS) confirms its proposal to buy BRE Properties, saying it offered $12.33 in cash and $0.2971 of ESS for each share of BRE - $58.08 based on Friday's close. Chatter last week said the offer was higher than a rejected $60 per share bid made by Land & Buildings earlier this year.
- The two companies have entered exclusive negotiations.
- BRE -2% premarket to $58.15
- Essex press release
- BRE press release
8:39 AMSources deny HSBC IPO plans
- While HSBC did consider a float of its U.K. operations in wake of the financial crisis, people familiar with the matter deny the bank is currently in the process of prepping an IPO, reports the WSJ.
- Among the issues: HSBC already has plenty of liquidity looking to find a good investment home, so what would be the plan to profitably invest the proceeds of a sale?
- Earlier coverage
8:10 AMBig drop in delinquent inventory at MGIC| Comment!
7:47 AMCME to launch Edmonton Sweet contract| Comment!
7:37 AMCoverage underway for Brixmor
- Coverage gets underway at a number of shops for Blackstone's (BX) recently gone-public shopping center owner Brixmor Property Group (BRX).
- Initiating with Buys are KeyCorp, Wells Fargo, BAML, and RBC Capital. Citigroup starts with a Hold.
- The stock is about flat since its mid-October IPO. Blackstone still holds a 73% stake.
3:32 AMHSBC mulls listing U.K. operations
- HSBC (HSBC) has reportedly asked investors if they would support the bank selling up to 30% of its U.K. unit in an IPO that could value the subsidiary at an estimated £20B.
- A listing of the business would help HSBC comply with the terms of the incoming Vickers rules, which require U.K. banks to ring-fence their domestic retail banking operations. Increasing capital requirements may also make the flotation logical, while it could unlock shareholder value as well, given investor optimism towards the U.K. and its banking sector.
- The news comes as other banks prepare to list subsidiaries in the U.K., including Lloyds, RBS and Santander.
- HSBC's shares are +0.4% in London.
Sunday, December 8, 2013
5:24 AMSEC widens probe into hiring practices at banks
- Goldman Sachs (GS), Deutsche Bank (DB) and Credit Suisse (CS) have reportedly joined JPMorgan (JPM) on the list of banks being investigated for their hiring practices in China. Morgan Stanley and Citigroup are also being scrutinized.
- The SEC is looking at whether the banks breached laws relating to foreign bribery by recruiting the family members of the well-connected in order to win business.
- The probe into JPMorgan has uncovered an email from a senior JPMorgan executive in Hong Kong saying that the bank's recruitment program for family members of senior government and other officials - called Sons and Daughters - had an almost "linear relationship with winning assignments to advise Chinese companies." A spreadsheet tracks JPM's record for converting hires into business deals.
- However, documents that JPMorgan has handed over as part of the investigation don't indicate that executives at the bank's New York HQ knew of the recruitment strategy.
5:15 AMFreezing weather hits airlines, freight companies
- Airlines have canceled over 1,000 flights, while freight companies and online retailers have delayed deliveries, due to severe winter weather across the U.S., particularly in the south.
- American Airlines (AAMRQ, LCC) has been especially affected after more than 400 flights from Dallas/Fort Worth, American's largest hub, were scrapped.
- FedEx (FDX) and UPS (UPS) have also felt the impact of the weather, while eBay (EBAY) has warned of shipment delays.
- Meanwhile, ice storms have cut power to over 200,000 homes from Texas to Tennessee.
- More freezing weather is predicted for tomorrow.
- It's likely to take a while for the economic cost of the storm to be calculated. Insurer Aon (AON) reckons that the losses from the tornadoes and thunderstorms that hit the U.S. last month will top $1B. Allstate (ALL) may take a large hit after towns in Illinois, where it is the second-biggest insurer, were among those to feel the full wrath of the storms.
- ETFs: KIE, IAK, KBWP, KBWI
4:35 AMJudge OKs $500M BofA deal with pension funds over mortgage bonds
- District Court judge Mariana Pfaelzer has approved a $500M class-action settlement between Bank of America (BAC) and pension funds related to problematic mortgage bonds sold by Countrywide from 2004-7.
- BofA said that following the deal, the bank will have resolved up to 75% of its exposure to MBS claims resulting from its purchase of Countrywide in 2008.
- Judge Pfaelzer authorized the deal over the objections of the FDIC.
- The agreement follows a $404M settlement that BofA struck with Freddie Mac over mortgage-repurchase claims, which was announced on Monday last week.
Friday, December 6, 2013
7:06 PMReuters: Carlyle preparing IPO or sale of chemical company
- Sources tell Reuters Carlyle (CG) is preparing to either sell specialty chemical maker PQ Corp. for up to $3B (after factoring debt), or take it public.
- Carlyle paid $1.5B to acquire PQ in '07. Since then, the company has been merged with industry peer INEOS Silicas, and has shed its engineered glass products business (Potters Industries). PQ is estimated to have annual EBITDA of $300M.
- Carlyle will reportedly talk with banks next week to select IPO underwriters for PQ, but will simultaneously continue exploring a sale.
6:45 PMEllington Financial reports book value per share of $23.86
- Ellington's (EFC) estimated fully diluted book value per share of $23.86 on Nov. 30 appears to be off from $24.57 at the end of October, but it includes the $0.77 dividend. Adding that back in shows book value actually grew a hair during November.
- Today's close of $22.61 puts the stock at a 5.2% discount to book and - annualized - the $0.77 quarterly payout is a yield of 13.6%.
- Press release