Seeking Alpha
  • Today - Wednesday, September 17, 2014

  • 2:40 AM
    • Credit Suisse (NYSE:CS) has received a letter from the U.S. Fed asking the bank to immediately address the issues with its underwriting and sale of leveraged loans.
    • The bank already received warnings last year regarding its involvement with the risky deals, which carry too much debt or offer too few protections for lenders.
    • The new letter raises concerns over Credit Suisse's practices and suggests that regulators continue to be concerned with the bank's lending activities.
    | 1 Comment
  • 2:14 AM
    • New York Attorney General Eric Schneiderman has defended his position over the Barclays (NYSE:BCS) dark pool lawsuit, calling the bank's motion to dismiss the case "misguided."
    • Schneiderman reasserted allegations that Barclays misled customers by favoring its own dark pool when routing client orders and chose high frequency traders over other investors.
    • The bank will have until Oct. 12 to respond, after which the case will go to trial if a settlement isn't reached.
    | 2 Comments
  • Tuesday, September 16, 2014

  • 5:19 PM
    • Boston Properties (NYSE:BXP) agrees to sell a 45% interest in each of 601 Lexington Ave., Atlantic Wharf Office and 100 Federal St. to affiliates of Norges Bank for ~$1.5B in cash.
    • BXP and the Norges affiliates will form a joint venture for each property upon closing, and BXP will retain property and leasing management for the ventures.
    | Comment!
  • 4:51 PM
    • Safeguard Scientifics (SFE +0.1%) files $150M shelf registration.
    • S-3
    • And a $50M shelf offering of common stock.
    • S-4
    | Comment!
  • 4:15 PM
    • Front Range Village is an 811K square foot mixed-use hybrid shopping center in Fort Collins, CO, and HFF (NYSE:HF) marketed the property on behalf of the sellers. The buyer for $128.3M was Ramco-Gershenson Properties Trust (RPT announced the purchase about a week ago).
    • Press release
    | Comment!
  • 4:09 PM
    • The move is part of the company plan - announced in August - to internalize management, and once that deal closes, Brian Taylor will resign the chairman's role to be replaced by Irvin Kessler, Silver Bay's (SBY +1.1%) vice chairman since its 2012 inception.
    • Press release
    | Comment!
  • 3:59 PM
    • The 446-room Holiday Inn-Toronto Airport and the 221-room Embassy Suites-Indianapolis North were sold in two separate deals for gross proceeds of $29M. FelCor (FCH +2.4%) will use the proceeds to pay down debt.
    • To date, FelCor has now sold 30 non-strategic hotels for gross proceeds of $665M.
    • Source: Press Release
    | Comment!
  • 3:57 PM
    • In a surprising blow to the world's largest banks, a federal judge upholds rules laid out by the CFTC giving it the power to apply new derivatives rules far beyond American borders.
    • For years, banks have kind of had their way in the courts battling new regulations, but this case makes three recent wins for the CFTC. At issue here are new derivatives rules, and the CFTC wants the power to apply those to overseas firms guaranteed by a U.S. bank, i.e. Goldman Sachs International, or the London branches of Citigroup.
    • Back when Gary Gensler pushed things through (he's no longer at the CFTC), he though he had worked out a compromise with the banks, but the lenders decided he had gone too far and sued, arguing about "guidance" vs. a "formal rule," and whether the costs imposed by the rule had been fully considered.
    • ETFs: IAI
    | Comment!
  • 3:39 PM
    • Realty Income (O +0.9%) sold $250M of 4.125% notes due in 2026, priced to yield 4.178%. The company (O +0.9%) will use about $220M of the net proceeds to redeem all outstanding shares of its 6.75% Class E preferred stock.
    • Source: Press Release
    | 2 Comments
  • 3:34 PM
    • "[The] plaintiffs today are acknowledging what CME has said all along: The claims are meritless and should have never been brought in the first place," says CME Group in a statement, noting the plaintiffs will not be receiving any money in exchange for pulling the suit.
    • At issue was CME's (the owner of the CBOT) move to include electronic transactions to determine closing grain prices, a decision the traders claim was made with getting proper approval from members, and one that would put them out of business.
    | Comment!
  • 3:27 PM
    • CIO Eric Kirsch joined Aflac (AFL -1.5%) in 2011 with a 3-year plan to boost returns by cutting allocations to JGBs. He also pulled back from private placements after the insurer got fried on yen-denominated loans to European banks. Boosted were holdings of U.S. corporate debt and alternative investments.
    • The 2nd 3-year plan begins in 2015, and Kirsch - speaking at a presentation in Tokyo - pledged continued higher allocations to growth assets like private-equity, real estate, infrastructure, hedge funds, and public equity.
    • Previously: Calpers exiting hedge funds
    | Comment!
  • 3:04 PM
    • Canadian Imperial Bank of Commerce (CM +0.7%) gets the nod from the Toronto Stock Exchange to move forward with its plan to buy back up to 8M shares, or about 2% of the float. The average daily trading volume in CIBC stock for the six months ending in August was just over 850K shares per day.
    • Purchases can commence on or after September 18.
    • Press release
    | Comment!
  • 2:51 PM
    • SL Green (SLG +0.9%) and JV partner The Moinian Group agree to sell180 Maiden Lane for $470M to a buying team led by Murray Hill Properties and Clarion Partners. The sale is expected to close in Q4.
    • The IRR for SL Green over its roughly 3-year involvement in the project comes to about 16%.
    • In other news, the company agrees to the purchase of 319K square feet of commercial condo units in a newly constructed office building at 55 West 46th Street for $275M. The space is on floors 22-34, and the seller has the option to include the 2nd floor (another 28K square feet) for $20M. The deal is expected to close before year-end.
    | Comment!
  • 1:33 PM
    • Goldman Sachs (GS +0.2%) drew about $1.5B in orders for $500M of Islamic bonds it sold today, thus opening up a new venue for funding by becoming the first conventional U.S. bank to issue sukuk. Goldman initially tried and failed to sell sukuk in 2011 (HSBC is the only other Western bank to sell Islamic bonds).
    • The paper priced at a spread of 90 bps over midswaps, a bit tighter than initial guidance of 95 bps, and carry a "profit rate" (traditional interest is not allowed) of 2.844%, a small premium to the 2.625% Goldman is paying on conventional notes due in 2019.
    | Comment!
  • 1:25 PM
    • Seeking its bit of the mortgage payout cheese, Virginia sues the usual suspects, seeking $1.15B in damages for allegedly misleading the Virginia Retirement System about the quality of mortgages backing MBS it purchased between 2004 and 2010.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, FNCL, FINU, RWW, RYF, FINZ
    | Comment!
  • 12:37 PM
    • Alternative asset managers aren't "one trick ponies," says Citigroup's William Katz, arguing the industry is far more diverse now than in the past and deal dynamics are way more sophisticated. He notes the companies have put less capital to work compared to past cycles and this should help "protect" IRRs.
    • The overall group, he says, "screen quite inexpensively,"  and Blackstone (BX +0.6%), KKR (KKR), and Och-Ziff (OZM) remain his favorite names. The recent declines in Apollo Global (APO -1.1%) and Carlyle Group (CG +0.8%) make those two players enticing as well.
    • The role call YTD isn't a pretty one, with only Blackstone in the green (barely), KKR down 7%, and the others lower by double digits.
    | 2 Comments
  • 12:27 PM
    • Residential mortgage REITs (REM +0.3%) have been under pressure ahead of the FOMC meeting as traders mull the possibility of higher short-term rates in the nearer-than-expected future, and FBR continues to see trading risks thanks a higher chance of something hawkish rather than anything dovish or unchanged coming from the Fed statement (has the FBR team seen the latest from Hilsenrath?).
    • For those who want to buy the dip, FBR calls MFA Financial (MFA +1%) a "top choice" thanks to a portfolio comprised 65% of adjustable-rate mortgages.
    • Also don't forgot that higher rates alongside an improving economy would be a boost to MFA's high-quality credit book.
    • Commercial REITs are a different animal, says FBR, thanks to differences in how they're funded. The group is less susceptible to a rise in short-term rates, and FBR says Blackstone Mortgage Trust (BXMT +0.6%) should actually see improving earnings power alongside higher rates.
    • ETFs: MORT, MORL
    | 4 Comments
  • 11:46 AM
    • Silver Bay (SBY +1%) is the industry outlier to the upside after being started with a Buy and $19.50 price target, while Starwood Waypoint (SWAY -0.6%) is under a little bit of pressure after rating just a Neutral and $30 price target.
    | Comment!
  • 11:27 AM
    • FQ4 net investment income of $1.5M or $0.15 per share vs. $1.4M and $0.18 the previous quarter (weighted-average share count rose to 10.3M from 7.6M).
    • Net asset value per share of $6.38 slips from $7.20 at end of FQ3. Net decrease in net assets from operations of $7.5M or $0.73 per share.
    • New originations of $44.2M during quarter, including five new portfolio companies. Total portfolio investments of $125.2M vs. $88.2M a quarter ago. Weighted-average interest rate of 11.27%.
    • Conference call presentation slides
    • FULL +0.9%
    • Previously: Full Circle Capital NII misses by $0.01
    | Comment!
  • 10:54 AM
    • Blackstone (BX -0.5%) reportedly agrees to the purchase of two Frankfurt office towers for a combined €300M. One - the MesseTurm buidling - is Frankfurt's 2nd tallest and sold for €250M.
    • Blackstone's real estate assets under management total about $80B.
    | Comment!
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