Federated Investors (FII -2.4%) and Affiliated Managers (AMG -2.5%) are among the suitors mulling bids for the $1B asset management division of bailed-out Franco-Belgian bank Dexia (DXBGF.PK), Reuters reports. Others that are interested include New York Life Insurance and European P-E firm Permira.
Overnight deposits with the ECB hit a fresh 2011 high of €255.57B ($341.88B) on Friday, well above the €100B that indicates stress in interbank lending markets. It has been the inability to obtain wholesale financing that has caused Dexia's (DXBGF.PK) woes.
The Merkel-Sarkozy talks have been given extra urgency by the woes of Dexia (DXBGF.PK), whose break-up will be the subject of final negotiations between the French and Belgian prime ministers today. Some see the response to Dexia's problems as a key test of the eurozone's ability to rescue banks.
S&P downgrades the core components of Dexia (DXBGF.PK) by a notch to A-/A-2, citing the bank's problems in obtaining wholesale financing and its need for more collateral. S&P could further downgrade Dexia or even upgrade it, depending on the impact of a proposed revamp.
Other French bank stocks aren't faring much better than Dexia (DXBGF.PK) after Greece warned it will miss its deficit targets. Credit Agricole (CRARY.PK) -5%; SocGen (SCGLY.PK) -7%. BNP Paribas (BNPQY.PK) -6% amid a 2.3% selloff in the broader market.
Shares of embattled Franco-Belgian lender Dexia (DXBGF.PK) plunge as much as 12% following a Moody's report questioning its liquidity. Dexia has €3.4B exposure to Greece - the most of any European bank - although Moody's is more worried about its ability to borrow.
Belgian lender Dexia (DXBGF.PK) files suit against Deutsche Bank (DB -0.8%) over more than $1B in losses from residential mortgage-backed securities. The lawsuit alleges fraud and claims Deutsche made "materially false and misleading statements."
The Greek crisis is ricocheting across the U.S. via Dexia (DXBGF.PK), whose €4.3B ($6.11B) exposure to Greece led to an S&P warning of a downgrade in May. This has pushed up interest rates on the $17B in U.S. muni bonds backed by the Belgian-French bank.
Dexia is a European banking group which, in 2011, carried out its activities principally in Belgium, Luxembourg, France and Turkey in the fields of retail and commercial banking, public and wholesale banking, asset management and investor services.