Barclays starts talks on BGI sale BC Partners, the private equity group, has stopped work on a potential $5bn counter-bid for iShares, the exchange-traded funds arm of Barclays, after the bank started talks to sell its entire asset management business, Barclays Global Investors. Barclays had been keen to attract counter-bids to improve on the $4.2bn sale of iShares agreed last month with buyout group CVC. But interest from potential counter-bidders has waned since money manager BlackRock approached Barclays about buying all of BGI, including iShares, in a deal likely to be worth more than $10bn. See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56155/barclays-starts-talk
| S&P warns UK over high debt level Britain on Thursday became the first big economy to be warned in the financial crisis that it might lose its top-notch credit rating, in a move that raised fears of possible downgrades for other large industrialised nations. S&P lowered its medium-term outlook on the triple A rating for the UK's debt to "negative" from "stable" for the first time since it started analysing the UK's public finances in 1978. Though the agency lowered its outlook, it affirmed Britain's AAA long-term and A-1+ short-term sovereign credit ratings. See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56154/sp-warns-uk-over-hig
| Gross: US could lose AAA rating Bill Gross, manager of the world's biggest bond fund, warned on Thursday the US was "going the way of the UK" and will eventually lose its top AAA credit rating - a fear that had already spooked financial markets on Thursday and could keep the dollar, stocks and bonds under heavy selling pressure, reports Reuters. The US will face a downgrade in "at least three to four years, if that, but the market will recognise the problems before the rating services -- just like it did today," said Gross, co-chief investment officer of Pimco and manager of the Pimco Total Return Fund, which has $154bn in assets. See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56156/gross-us-could-lose-
| Consortium wins BankUnited auction A group including investors such as Blackstone, Carlyle, Centerbridge and WLRoss won an auction for BankUnited on Thursday after the Florida lender – worth nearly $13bn by assets – was closed by federal regulators in the biggest US bank failure of 2009. The auction, conducted by the Federal Deposit Insurance Corporation, was the second of a troubled US bank in the credit crisis. Earlier, a group including JC Flowers, hedge fund manager John Paulson and Dune Capital won the bid for IndyMac's assets. See FT Alphaville: BankUnited fails, long live BankUnited! See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56152/consortium-wins-bank
| Liddy to step down from AIG In Categories: People Posted at 05:03 by Gwen Robinson Edward Liddy, the government-appointed chairman and chief executive of AIG, is to leave the stricken insurer after only eight months in a move that will allow the Obama administration to choose its own leaders for the troubled insurer. The AIG board, now controlled by government appointees, said it would split the role of chairman and chief executive and consider external and internal candidates. Liddy, appointed by the Bush administration last September, will leave as soon as replacements for the two jobs were found. See Liddy's resignation letter here. See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56153/liddy-to-step-down-f
| US puts $7.5bn into GMAC GMAC, the automotive financing company, received $7.5bn of government aid on Thursday, allowing it to stay in business and offer loans to buyers of Chrysler vehicles. The investment comes before the June 1 deadline for General Motors to complete a restructuring or file for bankruptcy, and leave the government with a majority stake in both the carmaker and its main financing company. A senior US official said the government's auto task force was continuing talks with GM and its creditors. See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56151/us-puts-75bn-into-gm
| US to steer GM towards bankruptcy The Obama administration is preparing to steer General Motors Corp into bankruptcy next week, reports The Washington Post, citing sources familiar with the discussions. Under the GM draft bankruptcy plan, the company would receive just short of $30bn in additional federal loans. The figure - which would bring government investment in GM to nearly $45bn - is a starting point in negotiations and could change as could the timing of a bankruptcy filing. See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56150/us-to-steer-gm-towar
| KKR sees opportunities in stimulus package KKR could take advantage of US plans to spend hundreds of billions of dollars on infrastructure stimulus but is less interested in buying banks or their troubled assets, the US private equity group's co-founders Henry Kravis and George Roberts told the FT. Kravis said the firm was looking at the public-private investment partnership and other initiatives but expressed caution about an overly opportunistic approach. See the FT's "View from the Top" video interview here. See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56149/kkr-sees-opportuniti
| Citi looks to slash tech costs Citigroup is ramping up efforts to slash its huge technology costs, as the bank's management aims to save far more than its earlier target of $1bn in 2009 by integrating hundreds of systems that have been separate for years. Citi Citi had originally estimated it could save $3bn over three years by rationalising its operations and technology functions. But progress in reducing overlaps and linking IT infrastructure across businesses prompted Citi to increase its target, underlining a shift in strategy being championed by Vikram Pandit, chief executive, to rebuild the group after heavy losses. See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56148/citi-looks-to-slash-
| M&B chief quits over losses Mitchells & Butlers is battling to regain investor confidence after the UK pub operator announced the departure of its long-serving chief executive following further losses over an abortive property deal two years ago. Tim Clarke, who has headed the group since 1995, resigned after M&B was forced to take a £69m hit to close out interest rate swaps related to the property venture. The new loss adds to an earlier £386m loss incurred from the hedge and has raised questions about whether the market had been properly informed about the hedge's potential risks. See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56147/mb-chief-quits-over-
| Tata Motors gains debt reprieve Tata Motors is expected on Monday to gain the agreement of its banks to roll over about $1.05bn in debt, rescuing India's largest carmaker from the brink of default. The extension of the loan until the end of 2010 will complete the refinancing of a $3bn bridge loan Tata Motors took out last year to finance its acquisition of Ford's Jaguar-Land Rover marques. The loan is due next Friday. See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56146/tata-motors-gains-de
| Bramdean in countdown to breakup Bramdean Alternatives, the investment trust managed by Nicola Horlick, yielded to shareholder pressure on Thursday and pledged to break itself up if it received no takeover bid within 10 weeks, reports The Times. The listed company, which is under siege from Vincent Tchenguiz, the property tycoon, pledged to start realising its assets and repay shareholders if no bid materialised by July 31. It also promised to name the mystery bidder examining its books if it has not walked away by June 9. See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56145/bramdean-in-countdow
| Morgan Stanley replaces prime brokerage head Morgan Stanley on Thursday replaced its head of prime brokerage Stu Hendel with Alex Ehrlich, who was hired from UBS where he ran the prime brokerage division for six years. An internal memo said Hendel was leaving the firm to "pursue outside interests." Morgan's prime brokerage, formerly a leader in the industry, has shrunk significantly after suffering from a large outflow of funds last year when the crisis threatened Morgan Stanley's survival. See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56144/morgan-stanley-repla
| Overnight markets: Down Asian stocks mostly fell on Friday, led down by Japanese stocks as speculation that the US will lose its top credit rating lifted the value of the yen against the dollar. In New York, the S&P500 slid 1.7% as US figures showed initial jobless claims fell by 12,000 to 631,000 in the week ended May 16, while economists had expected claims would drop to 625,000. Asian markets (Fri)
03:15 BST
Nikkei down 115.21 (-1.24%) at at 9,148.94
Topix down 3.42 (-0.39%) at 878.02
Hang Seng down 276.35 (-1.58%) at 17,199.49 US markets (Thurs)
S&P500 down 14.14 (-1.68%) at 888.33
DJIA down 129.91 (-1.54%) at 8,292.13
Nasdaq down 32.59 (-1.89%)) at 1,695.25
European markets (Thurs)
FTSE100 down 122.94 (-2.75%) at 4,345.47
Eurofirst 300 down 18.33 (-2.09%) at 857.52 Currencies
04:10 BST
€/$ 1.39310 (1.3764)
$/¥ 94.0600 (94.5300)
£/$ 1.58810 (1.5737) Commodities
04:00 BST
Brent Crude (ICE) up $0.36 at $60.29
Light Crude (Nymex) up $0.20 at $61.25
100 Oz Gold (Comex) up $2.00 at $953.20
Copper (Comex) up $0.60 at $205.70 10-year government bond yields (%)
04:20 BST
US 3.35 (3.19)
UK 3.65 (3.58)
Germany 3.53 (3.42)
Japan 1.44 (1.43) Sources: FT, Bloomberg See this article online.
http://ftalphaville.ft.com/blog/2009/05/22/56107/overnight-markets-do
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