Seeking Alpha
  • Today - Wednesday, September 17, 2014

  • 9:07 AM
    • The financing from CIT's real estate finance unit will be used by Spirit Bascom to acquire and renovate The Reserve at Heritage Oaks, a 444-unit garden apartment complex located in Tallahassee, Florida. Terms were not disclosed.
    • CIT one year ago loaned Spirit Bascom $33.3M for the purchase of 136 apartments and 28K square feet of office space in South Norwalk, CT.
    | Comment!
  • 8:29 AM
    • Simon Pepper - the London-based chief of foreign-exchange spot trading for State Street (NYSE:STT) - hasn't been seen on the trading desk for two weeks, reports the WSJ (and mostly confirmed by the bank). Sources at the bank say he's been asked to stay out of the office amid an internal review of forex trading.
    • While foreign exchange traders have been falling left and right at about a dozen banks thanks to investigations over rate-rigging, Pepper would mark the first State Street casualty.
    | Comment!
  • 8:20 AM
    • Isn't this one of the ways we got into the housing mess? Citigroup (NYSE:C) signs on with Bank of America (NYSE:BAC) to fund 15-year mortgages at below-market rates for borrowers with low incomes, spotty credit histories, or both.
    • The loans are being originated by the Neighborhood Assistance Corporation of America (NACA), a group - that has the ear of HUD - known for pushing banks to show they're fulfilling the terms required of them by the Community Reinvestment Act of 1977 (no redlining).
    • The moves also follow the banks' massive mortgage settlements, part of which were agreements to provide assistance to troubled mortgagees, though both say this new program is not related.
    • For its part, NACA says the foreclosure-loss rate on more than 18K purchase loans it has originated since 2006 is about 0%, with one of the reasons being NACA making up to three months of mortgage payments when borrowers run into trouble.
    | Comment!
  • 8:03 AM
    • The monetization of Radian Asset, improvement in the legacy credit book, and the strategic potential of the Clayton acquisition are the catalysts, as analyst Jason Stewart upgrades Radian Group (NYSE:RDN) to a Buy with $20 price target.
    • Noting Essent Group (NYSE:ESNT) has appreciated to within 9% of its price target, he downgrades the stock to a Neutral. "While the newer PMI entrants, including ESNT, are in an advantageous position under the proposed PMIERs, the current valuation of ESNT reflects this position."
    • NMIH Holdings (NASDAQ:NMIH) is reiterated as a Buy and Top Pick, but the price target is cut to $16 from $17.50. "We see the greatest upside in NMIH as the equity valuation converges with peers while the company executes their business model and the stock is ultimately valued on run rate EPS, which we expect to be achieved in H1 2016."
    • RDN +1.2% premarket
    | Comment!
  • 7:06 AM
    • The recent 6% dip in the shares (in an otherwise strong year) is unwarranted and creates an attractive entry point, says analyst Omotayo Okusanya, upgrading EXR to Buy with $57 price target.
    • "Our recent channel checks suggest that Q3 results may exceed current expectations. Storage fundamentals remain strong and given the short duration leases, we think the pullback on interest rate concerns is overdone."
    | Comment!
  • 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!
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