Lloyds loses top credit rating Lloyds Banking Group suffered another blow Monday when Moody's removed its long-held Aaa credit rating amid continued worries about accelerating losses from HBOS. In cutting Lloyd's long-term rating, Moody's warned of the challenges facing the group and the risk of more asset writedowns. The shares tumbled 21% before rallying in volatile trading to close 8% lower at 56.4p. More analysis here. See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52527/lloyds-loses-top-cre
| BHP eyes Rio's Chinalco deal BHP Billiton advisers have surveyed investors in Rio Tinto about their support for "an alternative" to the debt-laden mining group's proposed $19.5bn cash injection from Chinalco. Citigroup and Merrill Lynch canvassed Rio's top 20 shareholders and told BHP at the weekend that most key investors remain furious with Rio's plan to raise cash and sell assets to the state-owned Chinese metals group. Some investors have urged BHP to counter-bid for some of Rio's assets. BHP, which last year dropped its hostile bid for Rio, is mulling its options, say bankers. See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52526/bhp-eyes-rios-chinal
| Santander seeks to halt payouts Santander has sought regulatory permission to freeze payouts from its main real-estate fund after investors sought to withdraw 80% of the vehicle's capital at once, reports the FT. The Spanish bank said in a filing Monday that the Santander Banif Inmobiliario FII fund, Spain's biggest, "lacks the necessary liquidity" to meet redemption demands worth €2.62bn ($3.35bn). Separately, the WSJ reports that Santander has sweetened a compensation deal for private-banking clients who lost money in Bernard Madoff's alleged $50bn Ponzi scheme. See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52525/santander-seeks-to-h
| Japan's finance minister to quit Japanese finance minister Shoichi Nakagawa said he would resign after the opposition party claimed he appeared drunk at a G7 press conference in Rome, reports Bloomberg. Nakagawa publicly apologised on Tuesday for his behaviour and said a medical examination had diagnosed he was exhausted, as well as suffering back pain and a cold. Nakagawa's vacancy will leave Japan without a finance minister and banking regulator as it grapples with the fastest economic deterioration in more than 30 years. See FT Alphaville on "Japan's real problem". See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52524/japans-finance-minis
| China's Minmetals bids for Oz Minerals Minmetals has unveiled a friendly A$2.6bn ($1.7bn) takeover offer for Oz Minerals, becoming the latest Chinese investor to pursue an Australian miner, reports the FT. The Beijing-based group is offering 82.5c for each Oz Minerals share, a 50% premium to its last traded price, and to refinance a looming A$1.2bn debt payment. But Bloomberg reports that Oz Minerals' shares traded 19% below Minmentals' offer price Tuesday on concerns that Canberra will block the deal. Oz Minerals statement here. See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52522/chinas-minmetals-bid
| BG raises bid for Pure Energy BG Group has raised its bid for Pure Energy Resources, the Australian gas company, by 25%, in the latest sign of the UK oil and gas company's determination to build its position in Australia's emergent coal bed methane industry. BG's new bid, which values Pure at A$995m (£453m), trumps the latest offer from Australia's Arrow Energy, which last week raised its offer to A$890m. It pits BG against Royal Dutch Shell, which is a joint venture partner of Arrow. See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52521/bg-raises-bid-for-pu
| Capital fears hit L&G shares Shares in Legal & General fell 11% Monday to a low of 44.3p on continuing concerns that it could be forced to cut its dividend or raise capital. The FT on Saturday revealed that L&G was in talks with the FSA watchdog on the amount of money it should set aside for potential defaults in its £22.5bn corporate bond portfolio. L&G is expected to increase its reserves for potential bond defaults when it reports its preliminary results at the end of March. See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52520/capital-fears-hit-lg
| Odey turns bullish on UK banks Crispin Odey, the hedge fund manager who made a reputation – and big profits - short-selling UK banks, has turned bullish on some British lenders, such as Barclays and RBS, betting they will escape nationalisation if the government sets up a "bad bank" for their toxic assets. But he thinks Lloyds Banking Group needs more capital after its acquisition of HBOS. In his annual report to investors, the founder of Odey Asset Management, whose fund was up 42.5% last year, said some UK clearing banks were now "cheap" and their "risk/return is wrong". See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52519/odey-turns-bullish-o
| Trump unit eyes bankruptcy Trump Entertainment Resorts, Donald Trump's casino group, is expected to file Tuesday for bankruptcy, reports the WSJ. The company's board authorised the filing late Monday night after deciding that the company would otherwise be forced into bankruptcy involuntarily by creditors. It would be Trump Entertainment's third appearance in bankruptcy court, after most recently emerging from bankruptcy proceedings in 2005. See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52518/trump-unit-eyes-bank
| Korea's Woori Bank taps state aid Woori Bank, South Korea's second largest lender, on Monday said it would draw more than Won2,000bn ($1.4bn) from a state recapitalisation fund to boost its capital base amid a rise in bad loans. Woori is the first Korean lender to announce plans to tap the government's new Won20,000bn bank rescue fund. The fund is intended to encourage Korean banks to lend more to small and medium-sized companies. See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52517/koreas-woori-bank-ta
| Groups exit Gatwick bid Two of the five consortia considering bids for Gatwick airport have abandoned the process six weeks before final binding offers are due to be submitted, posing a problem for majority owner Ferrovial of Spain. One group is led by Babcock & Brown European Infrastructure Fund and RREEF, the Deutsche Bank infrastructure fund, and the other, a private equity consortium, is made up of 3i's infrastructure arm and two Canadian pension schemes. See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52516/groups-exit-gatwick-
| Malone comes to aid of Sirius John Malone's Liberty Media is expected to offer about $250m in a senior secured loan on Tuesday as the first step in a "multi-stage" deal to rescue Sirius XM ahead of an imminent debt deadline. The deal offered by Liberty would involve a debt for equity swap and leave Malone's group, which controls DirecTV, the US satellite TV company, with what one informed source described as a "meaningful" stake in Sirius. Details of the transaction were still being finalised but a decision is expected by the end of Tuesday. See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52515/malone-comes-to-aid-
| S&P warns on CLO defaults S&P has flagged another systemic risk that could yet emerge from the structured credit markets, warning in a report that investors in about €80bn ($102bn) of debt issued by complex structured loan funds could be at greater risk of losses than they realise if only a few companies default on their debt. Many collateralised loan obligations have exposure to the same group of borrowers, and a single default could hit the credit quality of the portfolios of nearly 90% of European CLOs, S&P said. See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52514/sp-warns-on-clo-defa
| Stanford depositors seek redemptions Depositors from as far away as Colombia have begun arriving in the island nation of Antigua, seeking to withdraw their money from an offshore bank under investigation by US state and federal authorities, reports the WSJ. The FBI, SEC and other regulators are examining Stanford International Bank and related firms controlled by Texas businessman R. Allen Stanford – particularly the group's marketing practices and a mutual-fund product sold by Stanford Trust. See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52513/stanford-depositors-
| Overnight markets: Quiet Asian stocks mostly declined on Tuesday, led by finance and commodity companies, amid concern insurers may have to boost capital reserves and as metals prices and shipping rates declined. Futures on the US S&P500 Index fell 1.1%; US markets were closed Monday for Presidents' Day. Asian markets (Tues)
04:50am GMT
Nikkei down 109.51 (-1.41%) to 7,640.66
Topix down 13.42 (-1.74%) 756.69
Hang Seng down 397.16 (-2.95%) at 13,058.72 US markets (Fri - Mon closed)
DJIA down 82.35 (-1.04%) at 7,850.41
Nasdaq down 7.35 (-0.48%) at 1,534.36
S&P500 down 8.35 (-1.0%) at 826.84 European markets (Mon)
FTSE100 down 54.84 (-1.31) at 4,134.75
Eurofirst 300 down 11.20 (-1.41%) at 785.30 Currencies
04:52 GMT
€/$ 1.2650 (1.2755)
$/¥ 91.52 (91.61)
£/$ 1.4222 (1.4218) Commodities (updated)
04:48 GMT
Brent Crude (Apr09) up $0.54 at $43.82
Light Crude (Mar09) down $0.80 at $36.71
100 Oz Gold (Feb09) up $11.70 at $953.90
Copper (Mar09) down $30.00 at $3,330.00 10-year government bond yields (%)
US 2.81 (2.89)
UK 3.48 (3.55)
Germany 3.04 (3.13)
Japan 1.26 (1.28) Sources: FT, Reuters See this article online.
http://ftalphaville.ft.com/blog/2009/02/17/52512/overnight-markets-qu
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