Doral Financial (DRL +16.6%) and the Puerto Rico Treasury on August 11 entered court-supervised negotiations to settle Doral's lawsuit. The talks had 10 days to run as of August 11, so the shares are getting jiggy ahead of what could be the imminent announcement of a sweet payday for Doral.
To review, Doral has sued the Treasury over its annulment of a deal to refund $229M in taxes to the bank, and thus far, Doral has had its way in court.
UBS O'Connor LLC is a $5.6B hedge fund unit within the Swiss bank, and it has cut REIT holdings across the board by more than $900M after racking up big gains in the stocks this year.
The biggest reductions were in Mid-America Apartment Communities (MAA +0.3%), AvalonBay (AVB +0.8%), and Equity Lifestyle Properties (ELS +0.2%), and other holdings include Redwood Trust (RWT -0.8%) and American Realty Capital (ARCP +1.1%).
"Berkshire had owned convertible notes of USG since 2008 and was effectively forced to convert the notes when they were called for redemption by USG in December 2013," says Warren Buffett in a statement. "This event triggered a filing requirement for Berkshire (BRK.A, BRK.B) and we were late in realizing that fact.”
Alongside its just-declared $0.02 quarterly dividend, FICO (FICO -0.7%) announces a $250M share repurchase plan to replace the one just ended last month. The new plan is open-ended and - at the current stock price - would be enough to buy back nearly 14% of the float.
The Financial Stability Oversight Council, reports the WSJ, has closed the books on the evidentiary record it has been compiling, and could reveal this as soon as tomorrow. Though no names will be named, it's no secret MetLife (MET +0.3%) and the FSOC have been talking about the insurer's possible systemically important designation for months.
Affirming Ocwen Financial's (OCN -1%) B+ credit rating, S&P cuts it outlook to negative from stable. Tipping the boat is the recently-disclosed subpoena from the SEC requesting documentation about related-party dealings. There's also the investigation of similar issues by the NY Dept. of Financial Services, and weaknesses in internal financial controls that prompted a restatement of certain financial statements.
The agency is taking no action on Altisource (ASPS -0.6%) as the company's performance would support its B+/Stable rating even if it had to forgo the fees in question.
Bank of America (BAC +0.4%) will pay $10B in cash and provide customer relief valued at $7B in a settlement with federal and state authorities over its role in mortgages leading up to the financial crisis, reports the AP.
The deal also requires the bank to acknowledge making misrepresentations about the quality of MBS packaged and sold by it, Countrywide, and Merrill Lynch.
Both parties tried, says Campus Crest Communities (CCG -0.1%) CEO Ted Rollins, but were unable to come to a deal "that would be received well by our investors and reflective of current market dynamics."
Campus Crest will thus continue with its 48% interest in the 37 property portfolio. Recently released earnings guidance already reflected this conclusion, so no change is necessary.
At issue is Berkshire Hathaway (BRK.A, BRK.B) failing to report in a timely fashion its boosted voting stake in USG late last year (it swapped convertible notes into common stock). The company today agreed to pay a $896K civil penalty to settle the government charges.
Junior bankers at Goldman Sachs (GS -0.1%) - where they are known to put in 100-hour work weeks - could see more than a 20% raise next year, reports the NYPost. The paper's source says no changes are planned for how much staff could make from bonuses.
The move comes following Goldman's decision to begin giving analysts Saturdays off (if you don't come in on Saturday, don't even think about coming in on Sunday). Morgan Stanley last month reportedly boosted salaries for mid-level staff by up to 25%, and BofA has taken steps to make sure analysts and associates take at least four weekend days off per month.
Dimmock Square is a retail power center in Colonial Heights, VA, and Armada Hoffler (NYSE:AHH) purchased a 100% interest for about 990K operating partnership units and $10M in cash. The deal is expected to be accretive to annual FFO per share.
Provisions of the recent debt extension agreement - including the submission of a restructuring plan by March 2, the retention of a chief restructuring officer, and the possible use of reserve funds for debt service payments - suggest, says Fitch, "a financial restructuring remains probable."
Fitch takes note of continuing weak financial performance, including a whopper of a $267M net loss led by declining sales, declining customers, high levels of A/R, high fuel costs, "and an unwillingness to increase base electric rates."
Watching with interest: MBIA (MBI -0.9%), Assured Guaranty (AGO +0.6%).
“We will take what economic activity we can get, but our housing market model was designed in the U.S. to build a lot of single-family homes for owners, not multifamily homes for renters," says Diane Swonk commenting on yesterday's big jump in housing starts.
A big share of the gain came from multifamily starts - typically a volatile number - but a rolling 12-month total shows apartment construction at its highest level in 25 years. Single-family housing has a bigger multiplier effect for both consumer spending and employment, says Swonk.
As for apartment owners, a separate report showed rents up 3.3% Y/Y, their fastest pace of increase in five years. It's little mystery why the stocks of companies like Equity Residential (NYSE:EQR) and AvalonBay (NYSE:AVB) are at all-time highs, but their owners may want to mull the fast pace of building.
The Wells Fargo Startup Accelerator will be a semiannual "boot camp" for tech startups in the areas of payments, deposits, fraud, operations, and other financial services areas. Wells Fargo (NYSE:WFC) will make a direct equity investment of $50K to $500K in each selected startup.
Applications are being accepted through October 1. "We need to expand our access to new ideas at the edges of our industry," says Steve Ellis, head of Wholesale Services at the bank. Three companies have already been selected and funded.
Adjusted net income of $77.9M or $0.63 per share for the three months ended July 31 vs. $66.5M and $0.52 one year ago.
CEO Thomas Faust: "Although flows remain disappointing, continued development of emerging franchises and strong investment performance support improved organic growth in the coming quarters." Net outflows during FQ3 of $2B vs. $0.9B of outflows in FQ2, and $8.8B of inflows a year ago.
Average AUM of $289.3B up 10% from a year ago.
6M shares repurchased during first nine months of fiscal 2014 for total of $227.9M. About 7.2M shares remain under repurchase authorization.
The 187K square foot cold storage facility and dry warehouse located in Arlington, IL is 100% leased through 2019 to a specialty food importer and distributor. Year 1 NOI should be about $1.5M with annual rent escalations built into the lease. The initial cap rate is 8.1%, and the annualized straight-line cap rate is 8.4%.
Clive Brown joins RBC (NYSE:RY) Global Asset Management as CEO of RBC GAM International from JPMorgan Asset Management, where he was most recently global COO and chairman of Asia.
In this newly-created role, Brown will be in charge of operations in EMEA and Asia-Pacific. It's RBC GAM's aim to have C$1T in AUM from the current $335B, and its chairman George Lewis has said it will take a greater focus on Europe and the U.S. to do so.
"Nationstar (NYSE:NSM) represents a tremendous opportunity to apply cutting edge, data-driven consumer marketing to an industry that isn't known for innovation in marketing or customer experience," says the company's first-ever Chief Marketing Officer, Kevin Dahlstrom.
Dahlstrom most recently was CMO at Elevate, a provider of financial solutions to consumers.