sale

Video: Eisenbeis Says Fed Misrepresented Bear Stearns’s Assets: Video

April 1, 2010

April 1 (Bloomberg) — Robert Eisenbeis, chief monetary economist at Cumberland Advisors Inc., talks with Bloomberg’s Betty Liu and Michael Mckee about the Federal Reserve’s release of details about securities it acquired to aid the sale of Bear Stearns to JPMorgan Chase & Co., part of the information that Bloomberg News sued the central bank for in 2008. The Fed, through its New York regional bank, also identified the securities acquired in the 2008 bailout of American International Group. (Source: Bloomberg)

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Icahn Pushes Ahead With Biogen Sale

March 27, 2010

Carl Icahn will press on with the sale of Biogen Idec after the latter ceded a third board seat to the billionaire investor in return for in exchange for concessions from the activist investor

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JP Morgan Unit Sells 15B Securities

March 27, 2010

JP Morgan Chase Capital XXIX has raised 15 billion through the sale of capital securities

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JP Morgan Unit Sells 15B Securities

March 27, 2010

JP Morgan Chase Capital XXIX has raised 15 billion through the sale of capital securities

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Detroit Sells $250 Million of Its Debt Without Recent Disclosure Filings

March 11, 2010

By Darrell Preston March 11 (Bloomberg) — Detroit, the largest U.S. city whose debt is rated below investment grade, will ask investors today to buy $250 million of its debt without having filed annual financial reports on time for five years. The city, which warned investors in its preliminary official statement of the possibility of filing for Chapter 9 bankruptcy protection, is providing a June 30, 2008, financial statement, its most recent, to investors. A fiscal 2009 report is expected to be complete by May 31, said city spokesman Dan Lijana, in an e-mail. “This issue is not for the faint of heart,” said Richard Ciccarone, chief research officer of Oak Brook, Illinois-based McDonnell Investment Management, which oversees $6.8 billion of municipal debt. “It certainly raises eyebrows.” Detroit will provide backing by payments of state aid from sales taxes to the general obligation issue, which enabled the issue to maintain investment grade. Michigan’s state treasurer can pay the aid directly to the trustee for the bonds, bypassing the city to ensure the debt is serviced, according to offering documents. The treasurer also agreed not to withhold payments when the city is late filing financial statements, as it has in the past. The municipality is selling the same week that state and local governments are scheduled to bring more than $11 billion of long-term securities to market. The largest deals include $2 billion from California and $696 million from the District of Columbia. Goldman Sachs Detroit is selling $250 million of bonds through investment banks led by Goldman Sachs Group Inc. to help cover budget deficits expected to total $280 million this year. The deal will probably appeal to investors seeking high-yield municipal debt, predicted Ciccarone, precluding the city from a market with tax- exempt yields near three-month lows . The city lost its investment-grade ratings as automobile makers in Michigan began cutting jobs and the tax revenue declined, which led to an expanding budget gap covered by short- term borrowing. The new bonds will spread repayment of the deficit debt across a longer period. Detroit general obligations maturing in 2024 traded yesterday at a yield of 7.56 percent, according to Municipal Securities Rulemaking Board data. That compares with yields of 3.36 percent to 3.5 percent for top-rated 14-year municipal debt yesterday, according to Municipal Market Advisors Inc. State Revenue Detroit will benefit in pricing from the state revenue added to its general obligation backing, said Ciccarone. Moody’s Investors Service, which rates the city’s general obligation debt Ba3, its third-highest rating below investment grade, assigned an A1 rating to today’s issue because of the legal structure that protects state payments to bondholders. Standard & Poor’s, which carries a BB rating on the city’s general obligation debt, assigned an AA- rating to the new issue. Michigan has previously withheld payments because the city has been late filing financial statements, according to the offering documents. Detroit disclosed that it expects state aid to be withheld for February and April this year because its 2009 financial statement is late. Money for bondholders isn’t expected to be withheld, according to the bond documents. Detroit also disclosed there’s no precedent for how its state aid payments would be handled in the event of a Chapter 9 bankruptcy filing because there’s never been a local instance. “The lack of precedent in Michigan makes the risks associated with such a filing difficult to assess,” the preliminary offering statement said. Financial Crisis While the city is still in a financial crisis, “insolvency isn’t on the horizon or on the agenda,” said Mayor Dave Bing , in a prepared statement provided by Lijana. A request to make finance officials available for comment was declined by Lijana. The delay in financial statements occurred under previous mayors and Bing plans to submit on time the 2010 audit, the first full budget cycle under his administration, Lijana said. Following are descriptions of pending sales of municipal debt in the U.S.: FLORIDA’S CITIZENS PROPERTY INSURANCE CORP. , the state’s largest real estate insurer, plans to sell $2 billion in tax- exempt senior bonds next week. Proceeds from the debt, secured by pledged revenue deposited to the insurer’s high-risk account, will provide financing to pay claims during the 2010 hurricane season. Underwriters led by JPMorgan Chase & Co. will market the securities. They are rated A+ by S&P and A2 by Moody’s. (Added March 9) ORLANDO-ORANGE COUNTY EXPRESSWAY AUTHORITY , which operates 100 miles (161 kilometers) of toll roads in the region, plans to sell $350 million of tax-exempt revenue bonds next week. Proceeds from the sale will help finance the authority’s capital program. JPMorgan Chase & Co. will underwrite the securities, rated A1 by Moody’s and A by S&P. (Added March 9) CALIFORNIA , the lowest-rated U.S. state, intends to raise as much as $5 billion from investors this month with its first debt sales since November, according to Treasurer Bill Lockyer . JPMorgan Chase & Co. and Morgan Stanley were selected to manage a tax-exempt deal of as much as $2 billion today, and Citigroup Inc. and Bank of America Merrill Lynch will handle a taxable offering later in the month, according to the state treasurer’s Web site. California is rated A- by S&P, Baa1 by Moody’s and BBB by Fitch. (Updated March 11) MASSACHUSETTS , the second most-indebted state per capita after Connecticut, plans to sell $538.9 million of floating-rate general obligations as early as this week. The date of the sale will be determined by market conditions, according to the state treasurer’s Web site. Proceeds will help refinance outstanding variable-rate demand bonds supported by an agreement from Citibank that expires later this month, according to Moody’s. Underwriters led by Morgan Stanley will market the issue. The state’s general obligations are rated Aa2 by Moody’s, while Fitch and S&P rate them AA, the third-highest of 10 investment grades. (Updated March 9) UNIVERSITY OF TEXAS , with nine academic locations and six health institutions, plans to sell $373.3 million of fixed-rate revenue bonds next week. Proceeds from the sale of the tax exempts will be used to refinance outstanding debt. It sold $331.4 million of tax-exempt securities last week with yields ranging from 0.66 percent on securities maturing in 2012 to 3.5 percent on securities due in 2024. The sale will be marketed by RBC Capital Markets, a unit of Royal Bank of Canada. The securities are rated AAA by S&P and Fitch and Aaa by Moody’s. (Added March 11) ILLINOIS, the second-lowest rated U.S. state after California, will take bids today from banks seeking to underwrite $300 million of Build America Bonds and $56 million of non-subsidized taxable notes. The deal will finance school construction, according to John Sinsheimer , the state’s director of capital markets. Illinois, which last sold Build America securities in a $1 billion deal on Jan. 28, is rated A2 by Moody’s, A+ by S&P and A by Fitch. A statutory requirement calls for 25 percent of all state debt to be bid competitively, Sinsheimer said. Banks led by William Blair & Co. will negotiate the sale of an additional $700 million in Build America securities in mid-March, he said. (Updated March 11) To contact the reporter on this story: Darrell Preston in Dallas at dpreston@bloomberg.net .

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Detroit Sells $250 Million of Its Debt Without Recent Disclosure Filings

March 11, 2010

By Darrell Preston March 11 (Bloomberg) — Detroit, the largest U.S. city whose debt is rated below investment grade, will ask investors today to buy $250 million of its debt without having filed annual financial reports on time for five years. The city, which warned investors in its preliminary official statement of the possibility of filing for Chapter 9 bankruptcy protection, is providing a June 30, 2008, financial statement, its most recent, to investors. A fiscal 2009 report is expected to be complete by May 31, said city spokesman Dan Lijana, in an e-mail. “This issue is not for the faint of heart,” said Richard Ciccarone, chief research officer of Oak Brook, Illinois-based McDonnell Investment Management, which oversees $6.8 billion of municipal debt. “It certainly raises eyebrows.” Detroit will provide backing by payments of state aid from sales taxes to the general obligation issue, which enabled the issue to maintain investment grade. Michigan’s state treasurer can pay the aid directly to the trustee for the bonds, bypassing the city to ensure the debt is serviced, according to offering documents. The treasurer also agreed not to withhold payments when the city is late filing financial statements, as it has in the past. The municipality is selling the same week that state and local governments are scheduled to bring more than $11 billion of long-term securities to market. The largest deals include $2 billion from California and $696 million from the District of Columbia. Goldman Sachs Detroit is selling $250 million of bonds through investment banks led by Goldman Sachs Group Inc. to help cover budget deficits expected to total $280 million this year. The deal will probably appeal to investors seeking high-yield municipal debt, predicted Ciccarone, precluding the city from a market with tax- exempt yields near three-month lows . The city lost its investment-grade ratings as automobile makers in Michigan began cutting jobs and the tax revenue declined, which led to an expanding budget gap covered by short- term borrowing. The new bonds will spread repayment of the deficit debt across a longer period. Detroit general obligations maturing in 2024 traded yesterday at a yield of 7.56 percent, according to Municipal Securities Rulemaking Board data. That compares with yields of 3.36 percent to 3.5 percent for top-rated 14-year municipal debt yesterday, according to Municipal Market Advisors Inc. State Revenue Detroit will benefit in pricing from the state revenue added to its general obligation backing, said Ciccarone. Moody’s Investors Service, which rates the city’s general obligation debt Ba3, its third-highest rating below investment grade, assigned an A1 rating to today’s issue because of the legal structure that protects state payments to bondholders. Standard & Poor’s, which carries a BB rating on the city’s general obligation debt, assigned an AA- rating to the new issue. Michigan has previously withheld payments because the city has been late filing financial statements, according to the offering documents. Detroit disclosed that it expects state aid to be withheld for February and April this year because its 2009 financial statement is late. Money for bondholders isn’t expected to be withheld, according to the bond documents. Detroit also disclosed there’s no precedent for how its state aid payments would be handled in the event of a Chapter 9 bankruptcy filing because there’s never been a local instance. “The lack of precedent in Michigan makes the risks associated with such a filing difficult to assess,” the preliminary offering statement said. Financial Crisis While the city is still in a financial crisis, “insolvency isn’t on the horizon or on the agenda,” said Mayor Dave Bing , in a prepared statement provided by Lijana. A request to make finance officials available for comment was declined by Lijana. The delay in financial statements occurred under previous mayors and Bing plans to submit on time the 2010 audit, the first full budget cycle under his administration, Lijana said. Following are descriptions of pending sales of municipal debt in the U.S.: FLORIDA’S CITIZENS PROPERTY INSURANCE CORP. , the state’s largest real estate insurer, plans to sell $2 billion in tax- exempt senior bonds next week. Proceeds from the debt, secured by pledged revenue deposited to the insurer’s high-risk account, will provide financing to pay claims during the 2010 hurricane season. Underwriters led by JPMorgan Chase & Co. will market the securities. They are rated A+ by S&P and A2 by Moody’s. (Added March 9) ORLANDO-ORANGE COUNTY EXPRESSWAY AUTHORITY , which operates 100 miles (161 kilometers) of toll roads in the region, plans to sell $350 million of tax-exempt revenue bonds next week. Proceeds from the sale will help finance the authority’s capital program. JPMorgan Chase & Co. will underwrite the securities, rated A1 by Moody’s and A by S&P. (Added March 9) CALIFORNIA , the lowest-rated U.S. state, intends to raise as much as $5 billion from investors this month with its first debt sales since November, according to Treasurer Bill Lockyer . JPMorgan Chase & Co. and Morgan Stanley were selected to manage a tax-exempt deal of as much as $2 billion today, and Citigroup Inc. and Bank of America Merrill Lynch will handle a taxable offering later in the month, according to the state treasurer’s Web site. California is rated A- by S&P, Baa1 by Moody’s and BBB by Fitch. (Updated March 11) MASSACHUSETTS , the second most-indebted state per capita after Connecticut, plans to sell $538.9 million of floating-rate general obligations as early as this week. The date of the sale will be determined by market conditions, according to the state treasurer’s Web site. Proceeds will help refinance outstanding variable-rate demand bonds supported by an agreement from Citibank that expires later this month, according to Moody’s. Underwriters led by Morgan Stanley will market the issue. The state’s general obligations are rated Aa2 by Moody’s, while Fitch and S&P rate them AA, the third-highest of 10 investment grades. (Updated March 9) UNIVERSITY OF TEXAS , with nine academic locations and six health institutions, plans to sell $373.3 million of fixed-rate revenue bonds next week. Proceeds from the sale of the tax exempts will be used to refinance outstanding debt. It sold $331.4 million of tax-exempt securities last week with yields ranging from 0.66 percent on securities maturing in 2012 to 3.5 percent on securities due in 2024. The sale will be marketed by RBC Capital Markets, a unit of Royal Bank of Canada. The securities are rated AAA by S&P and Fitch and Aaa by Moody’s. (Added March 11) ILLINOIS, the second-lowest rated U.S. state after California, will take bids today from banks seeking to underwrite $300 million of Build America Bonds and $56 million of non-subsidized taxable notes. The deal will finance school construction, according to John Sinsheimer , the state’s director of capital markets. Illinois, which last sold Build America securities in a $1 billion deal on Jan. 28, is rated A2 by Moody’s, A+ by S&P and A by Fitch. A statutory requirement calls for 25 percent of all state debt to be bid competitively, Sinsheimer said. Banks led by William Blair & Co. will negotiate the sale of an additional $700 million in Build America securities in mid-March, he said. (Updated March 11) To contact the reporter on this story: Darrell Preston in Dallas at dpreston@bloomberg.net .

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Prudential Plc Said to Plan Purchase of AIG’s Asia Insurer for $35 Billion

March 1, 2010

By Zachary R. Mider and Kevin Crowley March 1 (Bloomberg) — American International Group Inc. may sell an Asian life insurance unit to Prudential Plc for more than $35 billion, the company’s largest asset sale since a U.S. government bailout in 2008, people briefed on the matter said. AIG and Prudential aim to reach an agreement to sell American International Assurance Co. in coming days, although the talks could collapse, the people said, declining to be identified because the matter is private. Prudential offered about $25 billion of cash , which it would raise by issuing equity, and the remainder in stock, one of the people said. The price is about 50 percent more than Prudential’s market value. The sale, the biggest in the insurance industry excluding government bailouts, would be a change of course for AIG, which had planned an initial public offering for the Hong Kong-based unit to help repay its $182.3 billion rescue. Prudential, which wants to boost revenue from Asia, will get a business with more than 90 years in Asia, more than 20 million customers and over $60 billion of assets in 13 markets in the region. “Strategically it’s probably the right move” for Prudential, said Justin Urquhart Stewart , who oversees about $3.3 billion as director of 7 Investment Management in London, including Prudential shares. “It puts them into a different league.” New York Talks The purchase price would represent 1.5 times to 1.7 times the embedded value of AIA in 2009, one of the people said. Embedded value estimates a company’s net worth excluding new business. JPMorgan Chase & Co., HSBC Holdings Plc and Credit Suisse Group AG agreed to underwrite a $20 billion rights offering and $5 billion of debt, the person said. Prudential also plans to issue $10 billion of common stock, preference shares and convertibles, the person said. Though AIG executives believe an IPO would have a value similar to Prudential’s offer, the sale offers more cash up front, one of the people said. Prudential Chief Executive Officer Tidjane Thiam was in New York last week meeting with AIG executives to discuss the bid, one of the people said. Thiam said in a Feb. 17 interview that he wants to raise the proportion of sales from Asia to 80 percent by 2015 from 50 percent now. Prudential operates in 13 Asian nations and is seeking to offset slower growth in the U.K. An acquisition of AIA, founded in Shanghai in 1919, would give Prudential a business with 20,000 employees and 250,000 agents in markets spanning China to Australia. AIA sells life, accident and health insurance policies, and private retirement planning and wealth management services, according to its Web site. Financing London-based Prudential has a market value of 15.3 billion pounds ($23.3 billion). The stock has more than doubled in the past year. The shares rose 2.3 percent to 602.5 pence in London trading on Feb. 26. The company has an A+ credit rating with a negative outlook at Standard & Poor’s and an A2 rating with a negative outlook at Moody’s Investors Service. “Prudential has a very strong capital position , but an acquisition of this size would probably need equity financing to support it,” said Antonello Aquino , a senior credit analyst at Moody’s, who follows European insurers. Prudential is working with Credit Suisse Group, HSBC and JPMorgan on a share sale to fund the purchase, one of the people said. Sky News first reported the negotiations on Feb. 27. Lazard Ltd. is also advising Prudential, the person said. The U.K. insurer plans a $20 billion rights offering to finance the purchase, Reuters reported. Lloyds Banking Group Plc completed the U.K.’s biggest rights offering in December, raising 13.5 billion pounds. Asset Sales AIG said last May that it would pursue an IPO of AIA after an auction of the business failed to turn up bids that matched what AIG executives thought the company was worth. That included a bid from Prudential that valued AIA at about $15 billion, one of the people said. Prudential spokesman Ed Brewster declined to comment, as did AIG spokesman Mark Herr . Credit Suisse, Lazard and JPMorgan also declined to comment. A spokesman for HSBC didn’t respond to an e-mail seeking comment, and a spokeswoman for AIA in Hong Kong didn’t respond to a voicemail left on her mobile phone outside regular office hours. The sum raised in the sale would exceed the total of more than 20 other asset sales announced by AIG, which has struck deals to raise more than $12 billion by selling units, including a U.S. auto insurer and equipment guarantor. AIG Loss AIG had a fourth-quarter net loss of $8.87 billion, narrowing from $61.7 billion a year earlier when the insurer recorded the biggest loss in U.S. corporate history, the company said Feb. 26. The insurer gave stakes in American Life Insurance Co., known as Alico, and AIA, its biggest non-U.S. life insurance units, to the Fed in December. MetLife Inc. has said it is in talks to buy Alico, which operates in more than 50 countries outside the U.S. McKinsey & Co. has estimated Asia will deliver around 40 percent of global life insurance premium growth over the next five years. AIG’s board approved the sale of AIA and Federal Reserve and Treasury Department officials signed off on it, the Wall Street Journal reported today, citing people familiar with the situation. More Bidders? Prudential’s offer may tempt other insurers to bid for AIA, especially if AIG were prepared to lower its asking price, said Eamonn Flanagan , a Liverpool-based analyst at Shore Capital Group Plc who has a “buy” rating on the stock. AIG hired about seven additional banks to help manage an IPO for AIA in Hong Kong, according to five people familiar with the decision. Credit Suisse, CCB International, Goldman Sachs Group Inc. and UBS AG were among banks due to work with the original sale managers, Deutsche Bank AG and Morgan Stanley, said the people, who declined to be identified before a public announcement. Prudential Plc has no relation to Newark, New Jersey-based Prudential Financial Inc. and operates in the U.S. through its Jackson National Life Insurance Co. unit.

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Siemens Said to Consider Pulling Hearing-Aid Unit Sale If Bids Fall Short

February 22, 2010

By Aaron Kirchfeld and Anne-Sylvaine Chassany Feb. 22 (Bloomberg) — Siemens AG may call off the sale of its hearing aids subsidiary if bids fail to come in at the company’s expected price of at least 2 billion euros ($2.7 billion), two people familiar with the auction said. At least two of the potential buyers are offering less than 2 billion euros, with a deadline for bids tonight, said the people, who declined to be identified because talks are private. A partnership of Kohlberg Kravis Roberts & Co., Hellman and Friedman LLC and Cochlear Ltd., as well as Cinven Ltd., Bain Capital LLC and a group including Permira Advisers LLP and Nordic Capital are interested, the people said. Siemens , Germany’s biggest engineering company, is reviewing a sale of the unit as it retreats from consumer- oriented businesses. Chief Financial Officer Joe Kaeser said last month that the division is “very successful” and “highly profitable,” and no decision has been made on whether to sell. Some suitors underbid Siemens’s asking price because the unit requires investments in the distribution network, the people said. The division may attract offers as low as 1.5 billion euros, one of the people said. The Munich-based company hired UBS AG to manage a possible sale, people familiar with the plan said in December. KKR and Permira and Cochlear in the U.S. couldn’t be immediately reached for comment while Cinven, Bain, Permira and Hellman and Friedman declined to comment. Siemens spokesman Constantin Birnstiel couldn’t immediately be reached for comment. Reuters reported that the sale may be canceled earlier today, citing unidentified people close to the matter. The German company doesn’t disclose sales for hearing aids. The unit may have annual revenue of about 680 million euros, according to estimates by Daniel Jelovcan , a health-care products analyst at Helvea AG in Zurich. To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net

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Barclays 4Q Profit Soars; Top Execs WON’T Get Bonuses

February 16, 2010

LONDON — Barclays PLC on Tuesday reported a fourth quarter profit of 6.9 billion pounds ($10.8 billion), more than eight times larger than a year earlier, due to gains on the sale of its Global Investors unit to a private equity company. The result compared to a net profit of 824 million pounds a year earlier and boosted the full-year profit to 9.4 billion pounds, more than double the previous year’s 4.4 billion pounds. The fourth-quarter surge reflected a pretax gain of 5.3 billion pounds from the sale of Barclays Global Investors to BlackRock Inc. The sale and a revenue boost from the acquisition of Lehman Brothers U.S. operations in September 2008 compensated for a difficult year in the bank’s traditional retail operations. Full year profit from continuing operations fell from 3.8 billion pounds in 2008 to 2.6 billion pounds last year. Income was up 34 percent to 31 billion pounds, the bank said. Barclays’ shares were up 8.7 percent at 299 pence in morning trading on the London Stock Exchange. “With or without the sale of BGI, the figures are extremely impressive,” said Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers. “As was trailed in previous trading updates, the performance of Barclays Capital was a core contributor to the profit numbers, whilst the impairment levels appear to be under control.” Barclays CEO John Varley and Group President Robert E. Diamond both declined bonuses for a second year. Bonuses for other senior executives and the Barclays Capital Executive Committee will be paid in full “over a three-year period, subject to clawback,” the bank said. Chairman Marcus Agius said Barclays boosted lending by 35 billion pounds in 2009, more than tripling its pledge in April to increase lending by 11 billion pounds. “We believe that when the behavior of banks is assessed by their stakeholders to see whether we have genuinely learnt from the experiences of the last years, we will be judged mostly by how we conduct our business and, in particular today, by how we lend and how we pay,” Agius said. Barclays said impairment levels in the second half of 2009 were 23 percent, an improvement it didn’t expect to match in the current year. “Whilst we expect 2010 impairment levels to rise in certain books of business, particularly in our commercial lending portfolios, our planning assumption is for a moderate decline in impairment,” it said. Barclays Capital, beefed up through the acquisition of Lehman Brothers’ business in the United States in September 2008, reported pretax profit of 2.5 billion pounds, up 89 percent from a year earlier. But Barclays’ retail operations suffered from the lingering recession: pretax profit in the United Kingdom was down 55 percent, Barclays Commercial Bank profit fell 41 percent, Global Retail Banking profit was down 48 percent and Barclaycard net fell by 4 percent.

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Why is the FDIC so Bullish in Commercial Real Estate at …

February 14, 2010

Why is the FDIC so Bullish in Commercial Real Estate at GoldenNetworking.com … Source: PR.com (press release) (Original Article). New York, NY, February 14, 2010 –(PR.com)– The Federal Deposit Insurance Corp recently closed the sale of … GoldenNetworking.com’s Distressed Investing Leaders Forum 2010, February 26th, New York City, will examine this transaction in front of more than a hundred members of the Distressed Investing community, including business executives, …

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EMCORE Enters Into an Agreement to Sell a Majority Interest in Its Fiber Optics Business Resulting in the Completion of Its Restructuring

February 3, 2010

Agreement Provides for the Sale of a 60% Interest in Its Fiber Optics Business to Tangshan Caofeidian Investment Corporation for $27.8 Million and Forms a Fiber Optics Joint Venture

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EMCORE Enters Into an Agreement to Sell a Majority Interest in Its Fiber Optics Business Resulting in the Completion of Its Restructuring

February 3, 2010

Agreement Provides for the Sale of a 60% Interest in Its Fiber Optics Business to Tangshan Caofeidian Investment Corporation for $27.8 Million and Forms a Fiber Optics Joint Venture

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Travelers Posts Record $1.29 Billion Quarterly Profit on Investment Gains

January 26, 2010

By Jamie McGee Jan. 26 (Bloomberg) — Travelers Cos., the insurer added to the Dow Jones Industrial Average, posted its biggest quarterly profit as investment results improved on the sale of a stake in actuarial data provider Verisk Analytics Inc. Fourth-quarter net income rose 60 percent to $1.29 billion, or $2.36 a share, from $801 million, or $1.35, in the same period a year earlier, the New York-based insurer said today in a statement. Operating income, which excludes some investment results, was $2.12 a share, compared with the $1.48 average estimate of 18 analysts surveyed by Bloomberg. The stock gained in early trading. Travelers remained profitable throughout the credit crisis while competitors including American International Group Inc. and CNA Financial Corp. reported losses on investments tied to subprime mortgages. Chief Executive Officer Jay Fishman has said the insurer raised prices in all three of its business segments in the six months ended Sept. 30 even as rates dropped industrywide. It’s “good underwriting discipline that’s allowed them to hold onto profitable business and avoid the bad stuff,” Paul Newsome , an analyst at Sandler O’Neill & Partners LP, said in an interview before the results were released. Travelers reported a $130 million realized investment gain after tax, compared with a $138 million loss in the fourth quarter of 2008. The profit includes $103 million related to the sale of half its stake in Verisk, which had an initial share sale in October. Book Value Gain Travelers earned $3.62 billion for all of 2009, compared with $2.92 billion a year earlier. The insurer’s book value per share, a measure of assets minus liabilities, rose to $52.54 a share on Dec. 31, its fifth straight quarterly increase. The insurer’s book value was $51.25 a share on Sept. 30. The insurer gained $1.51, or 3.1 percent, to $50.40 in early trading at 7:30 a.m. in New York. Travelers projected 2010 operating earnings of $5.20 to $5.55 a share, compared with the $5.53 average estimate of analysts surveyed by Bloomberg. The insurer spent 16.6 cents per every premium dollar on claims and expenses in the quarter, compared with 14.1 cents a year earlier. Premium revenue fell to $5.34 billion from $5.43 billion. Travelers pulled $328 million from reserves after taxes, as the company reduced the amount it estimated it would need to pay claims from past quarters. Fishman increased Travelers’s dividend in October and the board authorized the repurchase of $6 billion in shares after the company scaled back its buyback program in 2008 to build capital. New Business “Companies like Travelers are basically willing to forego growth to buy back shares because new business isn’t very attractive,” Newsome said. U.S. commercial insurance rates fell 5.6 percent industrywide in the fourth quarter when compared with the same period a year earlier, a smaller decline than the 5.8 percent drop in the three months ended Sept. 30, according to the Council of Insurance Agents and Brokers . Prices have declined in every quarter since 2004. Travelers advanced about 30 percent in New York Stock Exchange composite trading in the past 12 months through yesterday, closing at $48.89. The 30-company Dow index , which Travelers joined in June, rose 26 percent in the same period. To contact the reporter on this story: Jamie McGee in New York at jmcgee8@bloomberg.net .

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Buying Commercial Real Estate – Case Responsible | Kingston …

January 24, 2010

Currently, the market has a large number of proposals for the sale of industrial bases, offices, warehouses, buildings, non-residential premises and so on.

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Executing the REO Deal

January 22, 2010

+ Web Exclusive + Distressed assets create tremendous opportunity for the savvy commercial real estate practitioner, but quickly capturing profit in this new arena requires a well-defined path to success. Executing the sale of these

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Associated Estates Announces Closing of Common Share Offering

January 15, 2010

CLEVELAND, Jan. 15, 2010 (GLOBE NEWSWIRE) — Associated Estates Realty Corporation (NYSE:AEC) (Nasdaq: AEC) today announced that it completed the sale of 5,175,000 common shares at a price of $11.10 per share, representing 4,500,000 of its common shares sold pursuant to its previously announced public offering and an additional 675,000 common shares that the underwriters elected to purchase pursuant to their over-allotment option in connection with the public offering. The net proceeds of the sale were approximately $54.7 million after deducting underwriting discounts, commissions and offering expenses. All of the shares were offered by Associated Estates and were issued under the Company’s currently effective shelf registration statement filed with the Securities and Exchange Commission.

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Grant Cardone: Corporate Sales Training Adopts Virtual Sales Training

January 2, 2010

Corporate sales training, mid-size and even small companies appear to be migrating to virtual sales training for their sales training needs. Virtual interactive sales training comes in many forms from animated reenactments to top name sales training professionals delivering actual training segments, even virtual interactive solutions to resolve specific situations and aid the sales person in making the sale. The sales training is delivered via a virtual network whereby the user(s) can access what they need, when they need it, from any computer by merely entering a user name and password. Everyone agrees that training is critical, the question is how to deliver it, at what cost and how to get the sales people to use it. To ensure use the virtual sales trainer must provide the sales team with relevant content, delivered in very short segments that resolve real world selling situations. If this is missing it will not be utilized. ” We surveyed thousands of sales people to determine how to build the architecture of our virtual sales trainer but also what content, what length and how the user wanted it delivered,” Nik Olsen, Tech Development, Sales Training VT. Virtual sales training compared to traditional training is more cost effective and proving to be more effective. (see Encyclopedia Brittanica article) . Companies that continue to send their staff off site to schools and seminars and/or bring consultants in-house are adding virtual sales training to support the staff when the traditional training is over. Virtual sales training is a way for me to provide my people with sales training and sales solutions after the consultant has left ensuring that the message is not lost the moment the consultant leaves. VP of Sales. The challenge for companies today is to increase sales without increasing expenses! Airfares, hotels, meals and the likes add up and don’t provide any training value. Virtual training allows for the trainer to bring the message to the user without incurring travel cost or missing customers. Corporate sales training is shifting to virtual training because of the cost effectiveness, accountability, testing and consistency features and are no longer intrigued with animation and simulation. Virtual sales training is a way to provide professional, motivating and relevant content that will not just train sales people but even assist them in making the sale. “We created a ‘Quick Fix’ module in our virtual trainer that allows for the sales person to literally access situations where Grant Cardone pops up in full motion-high quality video and provide the user with what he would do in a similar situation,” Justin Le Vreir, Director of Sales, STVT. (salestrainingvt) Our clients are shocked at how often their employees are using virtual sales training to not just train but assist them in the sale. This only increases use on the site and makes the virtual sales training as much an assistant as a training resource. Even companies that have us come in-house are demanding that our virtual sales training be left behind to support them when we are not there. Going virtual isn’t just a training solution it’s like getting a HR person, sales manager, motivator and sales trainer all in one. The virtual trainer never gets sick, never has a bad attitude, never gets frustrated, and works 24/7 without charging overtime. Corporate sales training is going virtual because: 1. It’s cost effective, 2. unlimited numbers of people can be delivered sales training on their schedule, 3. complete accountability of usage, 4. provides consistent message, 5. offers solutions in real time to assist the sale. Corporate sales training is going with virtual sales training because unlimited numbers of people can be delivered training and motivation, even sales assistance in different parts of the world, cost effectively, when the sales person needs it. Grant Cardone, Founder of Sales Training VT and Author of Sell to Survive

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Philippine Central Bank Said to Approve Sales of Dollar, Euro, Yen Bonds

December 29, 2009

By Clarissa Batino and Joel Guinto Dec. 29 (Bloomberg) — The Philippine central bank gave initial approval to the government’s plan to sell bonds denominated in dollars, euros and yen as the government’s budget deficit widens, a person with knowledge of the plan said. Monetary authorities allowed the government “in principle” to sell up to $1.5 billion of global bonds, said the person who declined to be identified before an official announcement. Separate approval was given to a plan to sell about $500 million in yen-denominated bonds, the person said. “Once the authority from the central bank is available, we can go to the market anytime,” Finance Secretary Gary Teves told reporters today in Baguio City, a province north of Manila. Such central bank approvals are needed before the government can ask investment banks to propose plans for managing the sale. The government needs to borrow to plug a deficit that may widen to 293 billion pesos ($6.3 billion) in 2010 from about 290 billion pesos this year, Teves said today. The Philippines has sold dollar-denominated bonds every January since 2005, according to data compiled by Bloomberg. The Philippines plans to raise $2 billion from the sale of overseas debt next year under a previous 2010 deficit estimate of 233.4 billion pesos. As the shortfall widens, borrowing will also increase, Teves said. The government hasn’t been “officially notified” of the central bank approval, Treasurer Roberto Tan said today from Hong Kong. Exploratory Plans The Southeast Asian nation has said it may sell euro- denominated bonds for the first time in four years in 2010, issue yen-denominated securities for the first time since 2001 and continue tapping the dollar bond market as revenue falls short of spending. The Philippines has 650 million euros ($932.9 million) of debt due in February and $561.5 million of dollar-denominated debt maturing in March, data compiled by Bloomberg show. A euro-denominated bond sale is “exploratory” and the government is still more inclined to sell dollar bonds, Teves said. “Samurai is an opportunity for us to diversify our market and to pay off some of our yen-denominated loans,” the finance chief said. To contact the reporter on this story: Clarissa Batino in Manila at cbatino@bloomberg.net .

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Grant Cardone: Sales-Driven, not Market-Driven

December 21, 2009

I was recently asked to write an article in response to the recent CNN article on selling luxury goods. Cutting price is never a long time survival for any company, it’s just a lazy way to do business. First, it doesn’t make up for loss volumes, and secondly, it can actually unnecessarily depreciate the value of your product. Even cost cutting can’t keep up with cutting price and volumes, the math just doesn’t work! All companies, especially luxury product companies must now move from being market driven to management/sales driven. The internet and mass market advertising is not the only way to move products and in fact both are dependent upon price not service. Market driven approaches like advertising the lowest price is a passive wait and see approach. Remember the lowest price does not get the luxury buyer from their home or office into your store. Lowest price does not ensure confidence in the consumer’s mind as they wonder about color choices, sizes or other considerations that have nothing to do with money. Cutting price rather than increasing service is management trying to get what worked in a great economy to work today- it won’t! Today, service is survival not some nice thing you talk about. I am not talking about service after the sale, I am talking about service in order to get a sale. Bringing the product or products is the essential type of ‘service-think’ that is required in this market. Cutting price in an environment of reduced volumes will negatively impact gross income and net profits. Price cuts become a solution in order to move old inventories but should not be considered by management as a long term solution to selling products. Some say that the days of conspicuous consumption are over but I don’t believe that is the case, I just think people will do less of it! People that buy luxury goods want service and convenience in addition to great value. Price is the least effective of all ways to substantiate value! Price is not the luxury customer’s biggest issue, time is. Just getting Mr. Big Bucks into his car, leave his office, wait in traffic and try to find a place to park could be the deal killer! Management and sales people you must understand that the only thing standing in between you and a customer is getting in front of that customer in the first place. Companies must now shift from market driven where the company advertises and then passively waits for traffic to a management/sales driven approach (active) where the company utilizes their database, internet leads and advertising and gets their sales team and their products in front of potential owners. I recently was trying to buy a Cartier watch for my wife and emailed 14 stores around the country. All of them emailed me back with a price. Some discounted, some did not, yet no one made the sale. Why? Because no one got in front of me to determine that I was on the wrong watch! These companies all used market driven approaches and have yet to make the transition to management/sales driven approaches. They are using the same actions that worked years ago when the market allowed for a more passive approach. Today companies must be willing to, even insist on going to the customer to make the sale. No longer depend on the market for your production management must demand a new level of production from the sales department. The economy is not the problem, becoming management/sales driven is. Waiting for the luxury client to come into your store (market driven) is a suicidal and outdated mode of doing business today. Relying on the internet is only a new version of waiting. Become management/sales driven and do what your competitors refuse to do in order to make the sale! Don’t use price to sell your products, increase the level of service you think and act with in order to make the sale. Milton Pedraza, CEO of the Luxury Institute, a market research firm in New York City, also thinks discounting should be a last-ditch effort. By the way I still have not bought that watch for my wife while Cartier stores around the country wait in their fancy showrooms complaining about the economy. Grant Cardone, Sales Expert and Author

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2010 REI Outlook: Real estate investors planning on buying …

December 21, 2009

Survey plan to boost their investment in commercial real estate over the next 12 months. That figure is up from 56 percent in the third quarter and 51 percent a year ago. The exclusive survey is produced jointly by National Real Estate …. Although the flow of distressed assets to the sale market has been limited to date, the build-up of distressed properties among lenders is clearly on the rise. The total delinquency rate among bank commercial mortgages that are 90-plus …

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Hynix Semiconductor Lenders Plan to Accept Bids for Their Stake by January

December 19, 2009

By Kevin Cho and Saeromi Shin Dec. 20 (Bloomberg) — Hynix Semiconductor Inc. creditors will accept letters of intent from potential bidders for their controlling stake in the world’s second-largest maker of computer-memory chips by Jan. 29. The sale arrangers will send out notices to domestic companies tomorrow, Korea Exchange Bank, the South Korean chipmaker’s main lender, said in a statement today. Creditors of Hynix plan to sell all or part of their 28 percent stake, valued at about 3.6 trillion won ($3.1 billion) based on Hynix’s closing price on Dec. 18, Korea Exchange Bank said. Creditors are trying to sell Hynix for a second time after Hyosung Corp. dropped its bid in November because of speculation that it received political favors to pursue the takeover. Korea Exchange Bank said last month creditors will resume their search for a domestic buyer as they try to recoup the $4.6 billion spent bailing out the chipmaker. “The industry outlook has turned more positive, and there may be more interest than before,” said Kim Young Joon, head of equities at NH-CA Asset Management Co. in Seoul, which manages the equivalent to $8.5 billion in assets. “Even if only part of the stake is sold, I think decision-making process will get better than under the current ownership, comprised of financial companies.” Right Timing Hynix may be able to repay about 1 trillion won in debt in 2010 and is still seen capable of investing about 2.3 trillion won, which should help the company widen the gap with its rivals, Korea Exchange Bank said. The Korean chipmaker said in October its spending budget for next year will be more than 1.5 trillion won, compared with about 1 trillion won in 2009. “Now is the right time for Hynix’s acquisition and we hope many companies will participate in the sale,” Korea Exchange Bank said in the statement. Sale arrangers Credit Suisse Group AG, Korea Development Bank and Woori Investment & Securities Co. said Nov. 16 it was the “right timing” to try to revive the sale because of the recovery in the industry. Hynix reported its first quarterly profit in two years in the third quarter on higher prices after an industrywide production cut helped ease a glut. The price of the benchmark dynamic random access memory chip, which temporarily holds data and helps computer processors run multiple programs simultaneously, has more than tripled this year after falling 62 percent in 2008, according to Dramexchange Technology Inc. , operator of Asia’s biggest spot market for semiconductors. Korea Exchange Bank owns 6.4 percent of Hynix , while Woori Bank has 6.3 percent and Korea Development Bank holds 4.8 percent. Six other financial companies own the remainder. Hynix shares have more than tripled this year, compared with a 46 percent gain in the benchmark Kospi stock index. To contact the reporters on this story: Kevin Cho in Seoul at kcho2@bloomberg.net Saeromi Shin in Seoul at sshin15@bloomberg.net

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Video: GM to Close Saab After Ending Sale Talks With Spyker: Video

December 18, 2009

Dec. 18 (Bloomberg) — General Motors Co. said it can’t conclude the sale of its Saab Automobile division to Spyker Cars NV, and plans to wind down the money-losing Swedish brand. The companies encountered “certain issues” that couldn’t be resolved during talks on a sale, Detroit-based GM said today in an e-mailed statement. Bloomberg’s Jeff Green reports. (Source: Bloomberg)

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Rusal’s Initial Share Sale Said to Be Approved by Hong Kong Stock Exchange

December 18, 2009

By Bei Hu and Yuriy Humber Dec. 18 (Bloomberg) — United Co. Rusal’s application for an initial public offering on Hong Kong’s stock exchange received conditional approval from the bourse, said two people familiar with the matter. Moscow-based Rusal plans to start gauging demand for the sale on Jan. 4, the people said, declining to be identified because no announcement has been made. The IPO also needs approval from the Securities and Futures Commission , one of the people said. The SFC has proposed to limit the sale to institutional investors, people with knowledge of the matter said today. Rusal, controlled by billionaire Oleg Deripaska , had its plan to become the first Russian company to go public in Hong Kong delayed this month when the Hong Kong bourse sought more information on the company’s debt restructuring. “The exchange regards the issue as a high-risk investment, but they are under pressure to allow the listing to go ahead,” said Eric Kraus , head of strategy at Otkritie Financial Co. in Moscow. Lorraine Chan , a spokeswoman for the exchange, declined to comment. Rusal plans to sell 10 percent of its shares to help repay debt. Earlier this month, it signed a $17 billion accord with creditors in Russia’s largest corporate debt restructuring, paving the way for the Hong Kong IPO. The exchange’s listing committee withheld approval for Rusal’s application at a meeting on Nov. 26 and asked the company for more information, including about its debt restructuring. In a Dec. 7 review, the exchange failed to approve Rusal’s bid and asked the company to explain how it would repay a $4.5 billion loan from Russian state-owned lender Vnesheconombank. The IPO would make Rusal the first Russian company listed on the Hong Kong stock exchange, which is wooing international companies amid growing regional competition. To contact the reporters on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net ; Yuriy Humber in Moscow at yhumber@bloomberg.net .

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Will Dubai affect the UK property recovery?

December 7, 2009

Estate agents are preparing for some of London’s finest properties to be put up for sale because of Dubai’s financial troubles. However, while the sale of Grand Buildings and

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China Pacific, Pension Fund Said to Seek $3.3 Billion in Hong Kong Offer

December 6, 2009

By Bloomberg News Dec. 7 (Bloomberg) — China Pacific Insurance (Group) Co. , the nation’s third-largest insurer, and the country’s pension fund plan to raise as much as HK$25.93 billion ($3.3 billion) in a Hong Kong share sale that may be the city’s second-biggest this year, four people familiar with the plan said. The insurer and the National Social Security Fund are offering 861.3 million shares at HK$26.80 to HK$30.10 apiece, said the people, declining to be identified before an official announcement. The sale is made up of 90.9 percent new shares from the company, with the rest being offered by the fund. The offer by China Pacific , part owned by Carlyle Group, comes after a 55 percent gain in Hong Kong’s benchmark Hang Seng Index this year. The company is replenishing capital after expansion brought down solvency margins, which the industry regulator uses to gauge insurers’ ability to settle claims. It made a 1.7 billion yuan profit in the third quarter, reversing a loss a year earlier as the domestic stock rally boosted returns. “That’s a reasonable price range,” said Qiu Peng, a Shanghai-based investment manager at Western Securities Co. “China Pacific’s premium growth should pick up in 2010 after the company has almost completed structural adjustments. The stock market should also do well, boosting investment returns.” The 861.3 million shares being sold represent a 10.2 percent stake in the company. The share sale values China Pacific at 1.7 times to 1.9 times next year’s embedded value as estimated by banks involved in the sale, said one person familiar with the sale. China Life Insurance Co. , the nation’s biggest insurer, trades at about 2.8 times and Ping An Insurance (Group) Co., the second largest, at 2.6 times . Share Rally “Some investors are willing to pay about 30 times new business value multiple for insurer stocks,” said Qiu. “Insurers’ valuations remain relatively low.” Gains last week pushed the Hong Kong-traded shares of larger Chinese insurers higher than their mainland stock prices, indicating the city’s investors are “more bullish on Chinese insurers,” said Olive Xia , an analyst at Core Pacific Yamaichi. China Life rose 2.6 percent to HK$41 in Hong Kong trading Dec. 4, 9 percent higher than its Shanghai-listed shares. “The market demand is fairly good now,” said Xia . “China Pacific’s H shares should also see some premium to the A shares after listing.” Beijing-based China Pacific rose by its 10 percent daily limit in Shanghai on Dec. 4, possibly reflecting investor expectations that demand for the Hong Kong offering will be strong and a trial of new endowment insurance products in Shanghai will boost sales, according to Xia. Emerging Markets China Pacific delayed a plan to sell as many as 900 million shares by September 2008 following the global equity rout. Dow Jones Newswires reported the size and price range of the sale earlier. China Pacific’s stock has rallied 144 percent this year in Shanghai, almost double the 78 percent advance for China Life’s stock trading in the Chinese city, and bettering the 125 percent for the A shares of Ping An. Share sales in emerging markets, including offerings by Chinese property companies, banks in Brazil and Malaysian mobile-phone providers, have enticed investors as the MSCI Emerging Markets Index almost doubled from its 2009 low and economic growth outpaces the U.S., Europe and Japan. Listings by Longfor Properties Co., Banco Santander (Brasil) SA and Kuala Lumpur-based Maxis Bhd. helped raise $39 billion in emerging markets during the September-November period, outstripping by $21 billion the amount sold in IPOs from 23 industrialized nations, data compiled by Bloomberg show. Improving Profitability The solvency margin for life insurance at China Pacific dropped by 10 percentage points to 224 percent in the first half of the year, while the ratio for property insurance fell by 11 percentage points to 177 percent. China Pacific made a 5.8 billion yuan profit from investments in the third quarter as the nation’s stock market recovered this year, helping the company reverse a 1.5 billion yuan loss a year earlier. Net premiums earned climbed 4 percent to 21.3 billion yuan. The insurer is boosting sales of protection and savings products and curbing investment-type policies this year to improve profitability. New regular-premium business more than doubled in the first half to 6.8 billion yuan, according to the company. The company’s property insurance arm reduced its combined ratio, which measures claims and expenses as a percentage of premiums, by 7 percentage points from a year earlier, to 101.5 percent in the first half, as it cut management costs. Taking Orders The insurer plans to start taking orders from international institutions on Dec. 7 and price the shares around Dec. 16, said two people familiar with the plan. Corporate investor including Allianz SE will take a combined $395 million of the shares. The sale may be expanded to 990 million shares to meet demand, the three people said. The stock is scheduled to start trading on Dec. 23. China International Capital Corp., Credit Suisse Group AG, Goldman Sachs Group Inc. and UBS AG are managing the sale. CICC didn’t reply a request for a comment, while the other investment banks declined to comment. Liu Li, a spokeswoman for China Pacific, wasn’t immediately available for comment. China Minsheng Banking Corp. , the nation’s first privately owned lender, last month raised HK$30.1 billion in the city’s biggest public share sale since April 2007. — Zhang Dingmin , Bei Hu . Editors: Andreea Papuc , Jim McDonald To contact the Bloomberg News staff for this story: Zhang Dingmin in Beijing at Dzhang14@bloomberg.net

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Alstom-Schneider Wins Bid for Areva Transmission Unit, Beating GE, Toshiba

November 30, 2009

By Gianluca Baratti Nov. 30 (Bloomberg) — Alstom SA and Schneider Electric SA will enter into exclusive negotiations with Areva SA of France for its power-grid subsidiary, knocking out overseas bids from General Electric Co. and Toshiba Corp. Alstom, which makes high-speed trains and energy-generation equipment, and Schneider, a maker of electrical circuits, bid 4.09 billion euros ($6.14 billion) for Areva T&D, the nuclear reactor company said in an e-mailed statement. The French state, which owns 91 percent of Areva, expects to complete the transaction in 2010. Paris-based Areva became the third-largest provider of power transmission and distribution equipment behind ABB Ltd. and Siemens AG after buying the unit in 2004 for 920 million euros from Alstom. President Nicolas Sarkozy orchestrated the sale as finance minister to avert Alstom’s breakdown, and Areva is now selling it on to fund expansion in the global nuclear power market. “Alstom’s win allows the “French Industrial Jewel” to regain some of the luster it lost and participate in the rapid build- out of new transmission infrastructure in emerging countries,” Ben Elias , analyst at Sterne Agee & Leach, said in an e-mail. Elias has a “neutral” rating on Areva stock. The decision followed an examination of the bids today, Areva said. Under the French group’s plan, transmission activities will go to Alstom and the distribution activities to Schneider. Growth Market The transmission and distribution market’s growth is tied to overall power demand, which Areva estimates will double by 2030. Areva operates in more than 100 countries worldwide. Transmission and distribution, which builds and operates electricity grids, accounted for 38.5 percent of Areva’s sales last year. The global economic slump and startup costs for plants in India and China caused the operating margin at the unit to narrow to 7.1 percent in the first half, from 11.1 percent a year earlier, Areva said Aug. 31. Areva Chief Executive Officer Anne Lauvergeon wants to raise as much as 10 billion euros to expand its nuclear business in the next two years. The company, which built 91 of the world’s 439 active nuclear reactors, predicts global demand for nuclear power will grow 5 percent each year until 2030, almost tripling from present levels, and targets building one third of new reactors. To help raise funds , Areva plans to sell a 15 percent stake to investors after the sale of the unit. The company reiterated today it will seek new partners in return for funds. Opposition The disposal of transmission and distribution drew internal opposition. The unit’s CEO, Philippe Guillemot , and other members of the division’s executive committee wrote in an open letter printed in France’s Les Echos newspaper on Nov. 25 that the sale would benefit Siemens and ABB. None of the offers submitted for the unit “take into account the employees considerations,” the European Works Council representing 15,000 Areva workers said GE’s power equipment generates about one-third of the world’s electricity. The Areva unit would add “critical mass” for smart-grid technology, GE Energy Infrastructure Chief Executive Officer John Krenicki said earlier this month, helping accelerate one of the fastest-growing areas of the company. “While disappointed in the outcome, the company remains totally committed to organic investment, technology development, and growth in the transmission and distribution business,” GE said in a statement following the decision. “GE made a strong, competitive bid for the Areva T&D business, addressing the financial, industrial, and social aspects of the sale.” GE spokesman Jim Healy declined to comment beyond the statement. To contact the reporter on this story: Gianluca Baratti in Madrid at gbaratti@bloomberg.net

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eBay: Perfume Sales In France Nets Site Major Fine

November 30, 2009

PARIS — Online auction site eBay Inc. was fined euro1.7 million ($2.5 million) by a Paris court on Monday for failing to stop the sale of famous perfume brands like Christian Dior, Guerlain, Givenchy and Kenzo – all of which are owned by luxury group LVMH. The decision follows a ruling last year against eBay for not respecting the system championed by brand owners such as LVMH and Richemont SA, the Swiss maker of Cartier watches, which is called selective distribution. The brand owners argue that luxury goods are valuable when they are exclusive and available in selected outlets – and not in an online free-for-all. EBay, meanwhile, has been calling for a change in European antitrust rules that allow luxury manufacturers to choose who can sell their branded goods online. Paris-based LVMH Moet Hennessy Louis Vuitton SA hailed the decision by the Paris commercial court, which it said “constitutes an important step in the fight against unlawful practices.” But Alex von Schirmeister, head of eBay in France, said the decision “hurts consumers” and that the company hopes the verdict is overturned on appeal. “The injunction is an abuse of ‘selective distribution’,” he said in a statement. “We believe that the higher courts will overturn this ruling and ensure that eCommerce companies such as eBay will continue to provide a platform for buyers and sellers to trade authentic goods,” he said. EBay has separately run into legal trouble with luxury goods and cosmetics manufacturers over the sale of bogus products on the site – with mixed results in different courts. Last year, a French court ordered eBay to pay more than $61 million to LVMH over counterfeit sales. But in May, a British court rebuffed a L’Oreal suit that sought to hold eBay liable for the sale of fake fragrances and cosmetics. In February, eBay also won in a German legal case brought by the Rolex Group over the sale of counterfeit watches. ___ Associated Press writer Nicolas Vaux-Montagny contributed to this report from Paris.

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France Is Said to Choose Alstom-Schneider’s $6 Billion Bid for Areva Unit

November 30, 2009

Nov. 30 (Bloomberg) — The French government is set to recommend a joint 4 billion-euro ($6 billion) bid by Alstom SA and Schneider Electric SA for Areva SA’s transmission and distribution unit, two people familiar with the matter said. A final decision will be made by Areva’s supervisory board , which meets tonight, said the people, who spoke on condition of anonymity because the decision hasn’t been disclosed. General Electric Co . and Toshiba Corp. also made bids. Areva is 91 percent owned by the French government, which had the final say in choosing a winner. Paris-based Areva became the third-largest provider of power transmission and distribution equipment behind ABB Ltd. and Siemens AG after buying the unit in 2004 for 920 million euros from Alstom. French President Nicolas Sarkozy orchestrated the sale as finance minister to avert Alstom’s breakdown. Areva is selling the unit again to fund expansion in the global nuclear power market. Alstom, which makes high-speed trains and energy-generation equipment, and Schneider, a maker of circuit breakers, have said they would create a common structure which would bid for Areva T&D and, if successful, transfer the transmission activities to Alstom and the distribution activities to Schneider. GE spokesman Jim Healy declined to comment. Growing Business Buyers are interested in the Areva unit because of the growing business of making electrical grids more efficient using newer technology including meters and software, called the smart grids. The Areva business generated 41 percent of revenue in Europe, and employs about 31,000 people, according to Areva. People familiar with the bidding have said the bids all stood at about 4 billion euros. The French government made its decision on commercial grounds and didn’t favor the French team, a government official said on Nov. 26. Transmission and distribution, which builds and operates electricity grids, accounted for 38.5 percent of Areva’s sales last year, or 5.1 billion euros. The global economic slump and startup costs for plants in India and China caused the operating margin at the unit to narrow to 7.1 percent in the first half, from 11.1 percent a year earlier, Areva said Aug. 31. The transmission and distribution market’s growth is tied to overall power demand, which Areva estimates will double by 2030. Areva operates in more than 100 countries worldwide. Stabilizing Grids Areva’s technology helps stabilize power grids as more utilities globally get an increasing amount of power from renewable sources such as wind and biogas turbines. Renewable generation can be erratic and so-called smart-grid technology helps smooth transmission by utilities so power goes uninterrupted and is more easily managed. Chief Executive Officer Anne Lauvergeon wants to raise as much as 10 billion euros to expand the nuclear business in the next two years. The company, which built 91 of the world’s 439 active reactors, predicts global demand for nuclear power will grow 5 percent each year until 2030, almost tripling from present levels, and aims to build one third of new reactors. To help raise funds, Areva plans to sell a 15 percent stake to investors after the sale of the unit. The sale is slated for this year, the company said in September. The sale of the power-grid unit drew opposition from the unit’s senior managers and employee representatives, who said the disposal would end up benefiting industry rivals. The unit’s CEO, Philippe Guillemot , and other members of the division’s executive committee wrote in an open letter printed in France’s Les Echos newspaper on Nov. 25 that the sale would support Siemens and ABB. None of the offers submitted for the unit “take into account the employees considerations,” the European Works Council representing 15,000 Areva workers said For Related News and Information: For top news on France: TOP FRA For Areva’s sales and earnings: CEI FP FA16 For Areva’s regional breakdown: CEI FP PGEO2 For Areva’s earnings history CEI FP DES 8

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Chinese Paintings Set Records, Beat Estimates as Hong Kong Buyers Battle

November 29, 2009

By Le-Min Lim Nov. 30 (Bloomberg) — A 4-meter abstract of falling snow by Chinese painter Chu Teh-Chun fetched an artist record HK$45.5 million ($5.9 million) in Hong Kong, the surprise top lot of an auction that saw bidders vie for the priciest works by masters. “Vertige Neigeux,” an oil-on-canvas diptych that took France-based Chu (1920- ) about a decade to complete, topped estimates and went to an unidentified Asian private buyer. There was a 5-minute tussle among bidders on the phone and in the packed hall of about 400 people at Christie’s International evening sale of 20th-century and contemporary Asian works last night. Including the daytime auctions of modern and ink Chinese paintings, the company tallied HK$611 million yesterday. “Works by established Chinese artists such as Chu and Zao Wou-ki are the most sought-after; they are driving prices,” Anthony Lin, a Hong Kong-based art consultant, said in an interview after the sale, at the harbor-front convention center. Mainland Chinese buyers drove prices higher. Inflation concerns in China and a sagging dollar are driving the Chinese to convert currencies into assets such as art. They are choosing pieces by living masters such as Chu and deceased artists Fu Baoshi and Xu Beihong because they are more likely to retain value than contemporary works by Chinese artists in their 30s and 40s. A 1944 scroll of ink-and-color on paper by Fu Baoshi (1904- 1965) called “Landscape Inspired by Dufu’s Poetic Sentiments” fetched an artist record of HK$60 million in the day sale. In the evening, a 1950s blue, white and pink oil painting of potted flowers by the late Chinese master Sanyu (1901-1966), the cover lot and tipped by Christie’s to fetch the highest price, sold for HK$35 million, against a presale estimate of HK$12 million. Zao Paintings Almost every painting by Paris-based abstract Chinese artist Zao (1920- ) did well. His 44 inch-by-57 1/8 inch blue- and-white “19-11-59” sold for HK$30.3 million, more than twice the presale estimate. A 51 inch-by-76 3/8 inch orange-hued “05- 03-76” fetched HK$8.4 million, against a HK$10 million estimate. “The huge price gap between these two like-sized paintings by Zao shows buyers have matured and are focused on the best works by an artist,” said Eric Chang, head of Christie’s Asia contemporary and Chinese 20th-century art department. Yesterday’s auction showed prices of Chinese contemporary art, while trailing those of older paintings by a wide margin, are starting to recover, said Lin. Star Lot Zeng Fanzhi’s 1994, 70 5/8 inch-by-78 3/8 inch oil painting, “Untitled (Hospital Series),” the star Chinese contemporary lot at the evening sale that was expected to fetch as much as HK$12 million, sold for HK$19 million after fierce competition involving Wang Wei, wife of millionaire Chinese stock-investor Liu Yiqian, and one other auction-room bidder. Wang lost, though she won other lots at the evening sale, including Liu Ye’s scarlet-and-pink acrylic-on-canvas “I Always Wanted to be a Sailor,” for which she paid HK$7.2 million, against a presale top estimate of HK$6 million. Wang declined to comment. Tian Kai, a Beijing-based dealer advising Wang on her art purchases, said Wang and her husband are sending on art purchases this year. In October, Liu paid about $11 million on a Qing Dynasty imperial throne with carved dragons at Sotheby’s Hong Kong auction. “They have made money and they want to spend it on art,” said Tian. Wang may compete for the auction’s top lot, the ring set with a 5-carat pink diamond with a top estimate of HK$55 million, Tian said. Estimates don’t include commission. On Nov. 28, the first day of the 5-day auction, Christie’s sold HK$40 million of wine, including a 78-bottle lot of 1999 Domaine de la Romanee-Conti, which fetched HK$1.44 million. The auction continues today with the sale of Southeast Asian and more 20th-century and Asian contemporary art. To contact the writer on the story: Le-Min Lim in Hong Kong at lmlim@bloomberg.net

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HARRODS is understood to be considering the sale of its £200

November 29, 2009

HARRODS is understood to be considering the sale of its £200 million pension fund. In a buy-out deal the retailer, owned by Mohamed al-Fayed, is thought to be seeking to offload its pension obligations to more than 1,000 staff by selling the scheme

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Madoff `Prisoner’ Watch, New York Mets Jacket Snapped Up in $900,000 Sale

November 15, 2009

By Philip Boroff Nov. 15 (Bloomberg) — Bernard L. Madoff’s Rolex “prisoner watch” and his New York Mets jacket were among 170 items sold last night in a Manhattan auction that raised more than $900,000 for victims of his $65 billion Ponzi scheme. About 2,000 dealers and collectors placed bids online, and in the ballroom of the Sheraton New York Hotel & Towers, for keepsakes, jewelry and clothing owned by Madoff and his wife, Ruth . Many of the lots blew past high estimates set by Gaston & Sheehan Auctioneers , the Pflugerville, Texas, company that handled the sale for the U.S. Marshals Service. “People were paying for the provenance, the notoriety,” one bidder, Sherwin Robin, said in an interview at the sale. “The prices were over retail.” Mrs. Madoff’s 14-carat diamond earrings sold for $70,000 to become the top lot. Personalized items also fetched a premium. The blue satin Mets jacket, with “Madoff” stitched on the back, had a $720 high estimate and went for $14,500, 20 times as much, to an online bidder. “What size is it?” screamed Miami dealer Alan Richardson, breaking the tension in the saleroom as he was outbid. Madoff’s 18-carat gold “prisoner watch” — one of about 50 watches on the block — sold for $65,000. It got its name because Rolex offered similar steel ones to prisoners of war in Germany during World War II. The pre-Victorian earrings, which had a high estimate of $21,400, were bought by a man with a Russian accent sitting in the back of the ballroom. Wearing a black pullover and baseball cap, he identified himself as a dealer and otherwise declined to comment. Charm Bracelet Robin, a 60-year-old lawyer from Savannah, Georgia, was in town for a legal conference and bid $1,500 for a ladies 14-carat charm bracelet. It sold for $3,000, more than the high presale estimate of $1,000. The goods had been seized from Madoff’s Manhattan penthouse and home in Montauk, New York, by the Marshals Service, which supports the federal judiciary system. The total just exceeded $900,000, above the presale estimate of about $470,000 to $586,000, according to Bloomberg calculations. The Marshals Service declined to say how much the auction raised. The 71-year-old Madoff is serving a 150-year sentence after pleading guilty to using money from new clients to pay off old ones. Prosecutors said he told investors they had as much as $65 billion with New York-based Bernard L. Madoff Investment Securities LLC. Geneva Watches Seventeen Rolexes he owned were on offer, as well as seven Cartier watches, and others from Patek Philippe , Audemars Piguet and Franck Muller. Many of the watchmakers are in or near Geneva, a city where financial institutions lost about $7 billion from investments with Madoff. Also on the block were 11 leather Hermes handbags owned by 68-year-old Mrs. Madoff, as well as bags by Chanel, Prada, Jil Sander , Judith Leiber, Bottega Veneta and Louis Vuitton. One Lady Hermes brown suede handbag, plus two other purses, sold for $1,900, compared with a $210 high estimate. There were also a pair of Bull and Bear-motif Tiffany & Co. cufflinks and a Tiffany silver key ring monogrammed “BLM.” The bric a brac included ash trays from hotels: three from the Hotel Plaza Athenee in New York, two from the Eden Roc in the south of France and one from Hotel Cipriani in Venice. The Madoffs’ Christofle flatware, engraved “RMB” was up for grabs, as was stationery imprinted with “Bernard L. Madoff Securities.” Madoff’s Wallet A men’s Mont Blanc black leather wallet, embossed with “BM,” sold for $2,200. Three boogie boards, with “Madoff” written in magic marker on one, and assorted fishing gear went for $1,000. On Nov. 17, the Marshals Service is auctioning three boats Madoff owned in Fort Lauderdale, Florida. Also on the block is a luxury sport-fishing yacht owned by Frank DiPascali , who pleaded guilty to aiding Madoff in the Ponzi scheme. The 3 1/2-hour sale was packed with media, with some 150 journalists covering the auction preview on Friday. “I’d have to rob a bank to get this much press,” music entrepreneur Norman Chesky said, trailed by reporters, as he rolled out a tree-stump table he bought for $500. To contact the reporter on the story: Philip Boroff at pboroff@bloomberg.net

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Madoff `Prisoner’ Watch Brings $65,000 at Auction, Wife’s Earrings $70,000

November 14, 2009

By Philip Boroff Nov. 14 (Bloomberg) — Ruth Madoff’s 14-carat diamond earrings sold for $70,000 today in a Manhattan auction of keepsakes, jewelry and clothing owned by Bernard L. Madoff and his wife that raised hundreds of thousands of dollars for victims of his Ponzi scheme. An 18-carat gold Rolex “prisoner watch” — one of about 50 watches on the block — sold for $65,000. It got its name because Rolex offered similar steel ones to prisoners of war in Germany during World War II. The 71-year-old Madoff is serving a 150-year sentence after pleading guilty to using money from new clients to pay off old ones. Prosecutors said he told investors they had as much as $65 billion with New York-based Bernard L. Madoff Investment Securities LLC. About 2,000 dealers and collectors placed bids in the ballroom of the Sheraton New York Hotel & Towers and online. Many of the roughly 170 lots blew past high estimates set by Gaston & Sheehan Auctioneers , the Pflugerville, Texas, company that handled the sale for the U.S. Marshals Service. The goods had been seized from Madoff’s Manhattan penthouse and home in Montauk, New York, by the Marshals Service, which supports the federal judiciary system. In all, the Madoff lots had a presale estimate of about $470,000 to $586,000, according to Bloomberg calculations. The Marshals Service declined to say how much the auction raised. The pre-Victorian earrings, a top lot with a higher estimate of $21,400, were bought by a man with a Russian accent sitting in the back of the ballroom. Wearing a black pullover and baseball cap, he identified himself as a dealer and otherwise declined to comment. ‘The Notoriety’ “People were paying for the provenance, the notoriety,” said Sherwin Robin, a 60-year-old lawyer from Savannah, Georgia. “The prices were over retail.” Robin was in town for a legal conference and bid $1,500 for a ladies 14-carat charm bracelet. It sold for $3,000, above the high presale estimate of $1,000. Personalized items fetched a premium. A blue satin New York Mets jacket, with “Madoff” stitched on the back, had a $720 high estimate and went for $14,500, 20 times as much, to an online bidder. “What size is it?” screamed Miami dealer Alan Richardson, breaking the tension in the saleroom as he was outbid. ‘BM’ Wallet A men’s Mont Blanc black leather wallet, embossed with “BM,” sold for $2,200. Three boogie boards, with “Madoff” written in magic marker on one, and assorted fishing gear went for $1,000. A Lady Hermes brown suede handbag, plus two other purses, sold for $1,900, compared with a $210 high estimate. On Dec. 17, the Marshals Service is auctioning three boats Madoff owned in Fort Lauderdale, Florida. Also on the block is a luxury sport-fishing yacht owned by Frank DiPascali , who pleaded guilty to aiding Madoff in the Ponzi scheme. The 3 1/2-hour sale was packed with media, with some 150 journalists covering the auction preview on Friday. “I’d have to rob a bank to get this much press,” music entrepreneur Norman Chesky said, trailed by two reporters, as he rolled out a tree-stump table he bought for $500. To contact the reporter on the story: Philip Boroff at pboroff@bloomberg.net

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Saint Laurent’s Bulldog Moujik IV, Mercedes Highlight $10 Million Auction

November 12, 2009

By Scott Reyburn Nov. 13 (Bloomberg) — Yves Saint Laurent’s pet dog is watching as hundreds of visitors come to see his late master’s personal belongings which go on auction in Paris next week. Moujik IV, a French bulldog, is attracting much attention, though he isn’t included in the sale of effects. Buyers can snap up the fashion designer’s collection of 14 ceramic bulldogs, his Cartier alarm clock, cigarette box and Mercedes car. The sale of possessions of the late courtier and his partner Pierre Berge may make as much as 6 million euros ($10 million) for their AIDS charity. The main event took place earlier this year and raised 342.5 million euros, the highest total ever achieved at auction for a private art collection. “This time it’s more personal,” Jonathan Rendell , deputy chairman, Christie’s International Americas, said in an interview. “People are fascinated by the more everyday things that belonged to Saint Laurent. This isn’t the great tribute that the February exhibition was. Then people queued up to look at masterpieces they knew they wouldn’t be able to see again.” Christie’s YSL Part II sale, held in collaboration with Pierre Berge and Associates, will take place on Nov. 17-20. About half of the 1,200 items were removed from the couple’s coastal retreat, Chateau Gabriel, near Deauville in Normandy, whose interiors Christie’s has recreated. Other items came from the couple’s apartments in Paris. The Cartier bedside clock is expected to fetch as much as 12,000 euros, while a silver-covered cigarette box, also by Cartier, carries an estimate of 1,000 euros to 1,500 euros. Guest Moujik The group of porcelain and glass statuettes of French bulldogs — Saint Laurent’s favorite breed — is expected to fetch between 400 euros and 600 euros. Sitting next to them is Moujik IV, the last in a line of bulldogs owned by the designer, who has been an honorary guest at Christie’s view. “He’s moved right in,” said Rendell. “He’s become part of the marketing team.” A black Mercedes Benz S Class 350L, dating from 2007, was the last car owned by the designer. It has a top estimate of 50,000 euros. Saint Laurent and Berge bought Chateau Gabriel in the early 1980s. The 19th-century mansion in Benerville was decorated by interior designer Jacques Grange in a fin-de-siecle style inspired by Marcel Proust’s novel “A la Recherche du Temps Perdu.” A pair of late-19th-century bronze stands from Saint Laurent’s bedroom, named after the novel’s character Charles Swann, carries a high estimate of 50,000 euros. A similarly dated 34-armed Dutch copper ceiling light from the entrance hall is expected to fetch as much as 70,000 euros, said Christie’s. Leger Gouache Fernand Leger’s 1950 gouache “Les travailleurs au repos,” one of the items removed from Saint Laurent and Berge’s Paris apartments, is among the most highly-estimated works of art in the sale, at 50,000 euros to 70,000 euros. Most of the lots in the auction carry official valuations of less than 10,000 euros. “The estimates are as cheap as chips,” said Rendell. “I think we’re probably looking at a total that will double the 3- million-euro low estimate. A lot of things are going to break out in price.” Chairs that were thought to have featured in an “Inca” ball in Paris in 1812 are Rendell’s nomination for “sleeper” of the sale at 7,000 euros to 9,000 euros for the pair. “They were the things everyone wanted to buy when I first showed people around Saint Laurent’s apartment in the rue de Babylone,” said Rendell. Grand Palais The first Saint Laurent sale, held at the Grand Palais in Paris in February, exceeded a low estimate of 200 million euros, based on hammer prices. Thirty thousand visitors queued for up to four hours to view that presale exhibition, said Christie’s. The event made headlines when a leather “dragons” armchair made by Art-Deco designer Eileen Gray sold for 21.9 million euros ($28 million). Two Qing dynasty bronze animal heads, plundered by foreign troops in the 19th century, were declared sold at 31.4 million euros. Cai Mingchao , the Chinese dealer who placed the winning bid, later refused to pay. Christie’s total for the YSL Part I auction doesn’t include the Chinese bronzes. “The issue has not yet been resolved,” Christie’s said in an e-mail statement in response to questions about the bronzes. ( Scott Reyburn writes about the art market for Bloomberg News. Opinions expressed are his own.) To contact the writer on the story: Scott Reyburn in London at sreyburn@hotmail.com .

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Warhol’s Dollar-Bill Work Fetches $43.8 Million, 114 Times Purchase Price

November 12, 2009

By Lindsay Pollock and Philip Boroff Nov. 12 (Bloomberg) — An Andy Warhol painting of 200 dollar bills was sold for $43.8 million at a New York art auction by London-based art collector Pauline Karpidas, more than 100 times what she paid in 1986. Five bidders vied for Warhol’s 1962 “200 One Dollar Bills” at the Sotheby’s sale last night and it went to an unidentified phone buyer. The 7 1/2-foot wide silkscreen canvas comprises repetitive images of one-dollar bills, reproduced in tones of black on grey, with a blue Treasury seal. Karpidas offered the work, according to two people familiar with the situation. She paid $385,000 for the painting at a 1986 Sotheby’s sale. “We’ve seen nothing like this recently,” said New York dealer Tony Shafrazi . “This is a masterpiece.” Competition for the Warhol painting was the highlight of the sale and underscored returning buying confidence to the art market, pummeled a year ago by the world financial crisis. The auction, which started three hours after the Standard & Poor’s 500 Index closed at a 13-month high, tallied $134.4 million, against the company’s high estimate of $97.7 million, with just two of the 54 lots unsold. On Tuesday, Christie’s International’s sale took $74.2 million as 85 percent of lots found buyers. Last night’s results prompted some dealers to proclaim the end of the market slump. “The art vacation is over,” said New York art dealer Jack Tilton , commenting on the Sotheby’s auction. “Art has come back more than stocks or housing.” Lowered Estimates Others, including art adviser Todd Levin , ascribed the high selling rates to the lowered estimates on lots. Sotheby’s total yesterday paled against the company’s May 2008 record tally of $362 million. “The auction houses got realistic quickly enough,” said Levin. “Estimates have come down 50 to 75 percent; expectations have been lowered to such a degree that everything looks rosy.” The fashion designer Valentino Garavani bought David Hockney’s painting “California Art Collector” for $7.9 million and the Jean Dubuffet sculpture “Clochepoche” for $1.1 million at yesterday’s auction, which he declared “bellissima,” Italian for “beautiful.” Michael Ovitz and hedge-fund manager Thomas Sandell were also at the sale. Another winner was Warhol’s radiant 1965 red and green “Self Portrait,” which sold for $6.1 million to London jeweler Laurence Graff , against a $1.5 million high estimate. The painting was a gift from Warhol to Cathy Naso, a former receptionist at the artist’s drug- and sex-addled Factory, who had owned the painting since 1967. She kept it in the closet for 42 years for safekeeping, according to Sotheby’s. Slow Start The sale got off to a slow start, with 20 lots from the estate of an Ohio couple. Mary Schiller Myers and Louis S. Myers’s collection tallied $24.5 million and included Alice Neel’s 1970 “Jackie Curtis and Rita Red,” depicting a striking pair of cross-dressers, which sold for an artist auction of $1.65 million, triple the high estimate. The sale also included four lots that Dutch financier Louis Reijtenbagh was selling anonymously. The collector settled lawsuits with banks earlier this year and sold $58.5 million of art at Sotheby’s evening Impressionist and modern sale last week. One of Reijtenbagh’s offerings, Jean-Paul Riopelle’s “Filets Frontiere,” estimated to sell for up to $1.2 million, was pulled before the sale, at the financier’s request. Dubuffet’s child-like painting of Paris, the 1961 “Trinite Champs-Elysees,” which Reijtenbach paid $5.2 million for at Sotheby’s in New York in May 2006, fetched an artist auction record of $6.1 million. “The auction speaks for itself,” said Chicago collector Stefan Edlis, after Sotheby’s sale. “Collectors are suddenly more willing to part with their money.” Estimates don’t include commissions. To contact the reporters on this story: Lindsay Pollock in New York at lindsaypollock@yahoo.com ; Philip Boroff in New York at pboroff@bloomberg.net .

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Merckle’s Ratiopharm Said to Get Offers From Goldman, Advent, TPG, Sanofi

November 11, 2009

By Aaron Kirchfeld Nov. 11 (Bloomberg) — Ratiopharm GmbH, the generic-drug maker being sold by Germany’s Merckle family to pay off loans, drew bids of about 2 billion euros ($3 billion) from companies including TPG Inc., Goldman Sachs Group Inc. and Advent International Corp., two people close to the matter said. Goldman’s private-equity arm and Boston-based buyout firm Advent bid jointly, said the people, who declined to be identified because talks are private. Other bidders include New York-based KKR & Co. and French drugmaker Sanofi-Aventis SA, they said. Generic drugmakers Teva Pharmaceutical Industries of Israel, U.S.-based Mylan Inc. and Actavis Group of Iceland, as well as Chinese drugmaker Sinopharm Group Co. Ltd., and private equity firm Permira are also among the bidders, said one of the people. A sale of the Ulm, Germany-based drugmaker would help pay debts amassed by Adolf Merckle , who committed suicide in January after making wrong-way bets on the stock market. His son, Ludwig Merckle , is selling the pharmaceutical business. Spokesmen for Goldman, Advent, TPG and Sanofi declined to comment, as did a spokeswoman for Actavis. KKR, Permira, Teva and Mylan couldn’t immediately be reached for comment. Markus Braun , a spokesman for Ratiopharm, declined to comment today. Braun said on Nov. 5 that a “large” number of first-round bids exceeded the expectations of VEM Vermoegensverwaltung GmbH, the investment vehicle that controls Ratiopharm. VEM still aims to complete the sale in the first quarter of 2010, Braun said then. Ratiopharm’s goal to be sold in one piece remains a priority, Braun said last week. Selling the drugmaker in parts is still an option, he added. Declining Market The Merckle family may struggle to raise as much as 3 billion euros ($4.5 billion) because a decline in Ratiopharm’s home market , where the company competes with Stada Arzneimittel AG and Novartis AG’s Sandoz unit, has reduced the value of the company’s two German brands, people familiar with the plan said in September. Ratiopharm , founded in 1973, was Germany’s first generic- drug company. It sells more than 750 versions of branded medicines, including a copy of Bayer AG’s original aspirin painkiller. The Merckle family is also seeking buyers for drug wholesaler Phoenix Group and Swiss generic-drug maker Mepha Group to help pay off debt. Ratiopharm lenders Commerzbank AG and Royal Bank of Scotland Group Plc are managing the sale. To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net

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Challenger moves into debt market

November 9, 2009

Challenger Financial Services Group is venturing into the real estate debt market. It intends to establish a $A300 million real estate debt business, lending against high quality commercial property. Its refocusing includes the sale of some direct

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Challenger moves into debt market

November 9, 2009

Challenger Financial Services Group is venturing into the real estate debt market. It intends to establish a $A300 million real estate debt business, lending against high quality commercial property. Its refocusing includes the sale of some direct

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Lanesborough REIT to sell property for $6.6-million

November 9, 2009

Mr. Arni Thorsteinson reports LANESBOROUGH REIT ANNOUNCES $6.6 MILLION SALE OF SASKATOON PROPERTY Lanesborough Real Estate Investment Trust (LREIT) has entered into an unconditional agreement to sell a 113-suite apartment property in Saskatoon, Sask.,

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China Minsheng Banking Plans to Raise Up to $4 Billion in Hong Kong Sale

November 8, 2009

By Bloomberg News Nov. 8 (Bloomberg) — China Minsheng Banking Corp. , the nation’s first privately owned lender, plans to raise as much as HK$31.54 billion ($4.07 billion) in an initial share sale in Hong Kong, said two people familiar with its plan. Minsheng will sell 3.32 billion shares, or a 15 percent stake, at HK$8.50 to HK$9.50 each, said the people, who declined to be identified before an official announcement. The top end of the range values the Beijing-based bank at 1.8 times its 2010 book value as estimated by banks involved in the sale, they added. BOC International (Holdings) Ltd., China International Capital Corp., Macquarie Group Ltd. and UBS AG are managing the sale. For Related News and Information: Top financial stories: FTOP Stories on China Banks: TNI CHINA BNK Banking industry debt and equity monitor: BANK Relative value comparison: 600016 CH RVC

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Fannie Mae Bid to Sell Tax Credits Vetoed by U.S., Thwarting Goldman Sachs

November 7, 2009

By Dawn Kopecki Nov. 7 (Bloomberg) — Fannie Mae’s request to sell $2.6 billion in low-income housing tax credits would be a bad deal for taxpayers and won’t be allowed, the U.S. Treasury said. The government decided the deal would cost taxpayers more than Fannie Mae would gain from the sale, according to a letter sent to the Washington-based company yesterday. The Treasury was considering whether to let Goldman Sachs Group Inc. buy credits, which could be used to lower the firm’s tax bill. The prospect of record year-end bonus payments at Goldman Sachs had sparked criticism from lawmakers even after the securities firm repaid $10 billion from the Treasury last year plus dividends. New York-based Goldman has also benefited from Federal Reserve support and government backing on about $30 billion of debt, and was one of the largest recipients of funds from the U.S. bailout of American International Group Inc. “Every politician on Capitol Hill right now hates Goldman,” said Paul Miller , a bank analyst with FBR Capital Markets in Arlington, Virginia. “Politically, this would look really bad.” Goldman said last month it has set aside $16.7 billion for compensation so far this year, up 46 percent from the same period in 2008. Fannie Mae, which is operating under government conservatorship, has said it may not be able to use the tax credits because it hasn’t reported a profit in nine quarters. The company entered an agreement before Sept. 30 to sell the credits at a premium, partly to avoid potential writedowns, according to a Nov. 5 filing with the Securities and Exchange Commission. No Economic Sense “The proposed sale would result in a loss of aggregate tax revenues that would be greater than the savings to the federal government from a reduction in the capital contribution obligation of Treasury to Fannie Mae,” the Treasury said in the letter. “Withholding approval of the proposed sale affords more protection of the taxpayers than does providing approval.” Miller said the sale didn’t make economic sense to the Treasury. “Net net, this would look negative to the shareholder and that’s who Treasury is supposed to be representing,” Miller said. A Goldman Sachs spokesman, Lucas van Praag , declined to comment, as did a Fannie Mae spokesman, Brian Faith . Fannie Mae has posted $120.5 billion in net losses over the past nine quarters and requested $59.9 billion in Treasury aid. Tax Benefits Fannie Mae has accumulated about $5.2 billion in tax credits for investing in low-income housing, and has said in previous filings that it is “not currently recognizing a majority of the tax benefits associated with tax credits.” The company said Nov. 5 that it will need to write down the $5.2 billion investment to zero if “we no longer have the intent and ability to sell or otherwise transfer” the low- income housing tax credits, which are derived from investments in affordable rental housing. McLean, Virginia-based rival Freddie Mac, which is also operating under federal conservatorship, said in a separate SEC filing yesterday that it has about $3.4 billion in tax credits it may need to write down. “If we are not able to execute sales or other transactions in order to realize the benefits of these investments or do not receive regulatory approval for such transactions, we may record significant other-than-temporary impairment,” Freddie Mac said. To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net

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Two Suburban Apartment Transactions Total $45M

October 29, 2009

Search for Atlanta Commercial Real Estate Thursday, October 29, 2009 – Cushman & Wakefield's local office recently completed the sale of two suburban apartment properties. Madison at River Sound, a 586-unit complex in Lawrenceville

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HFF Closes $78.5 Million Loan Sale For AEGON USA Realty Advisors (Business Wire via Yahoo! Finance)

October 26, 2009

CHICAGO—-The Loan Sales group of HFF announced today it consummated the sale of 19 well-performing first mortgage commercial loans on behalf of AEGON USA Realty Advisors.

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Gas Natural Agrees to Sell 64% Energia Del Pacifico Stake for $1.1 Billion

October 17, 2009

By Joao Lima and Dick Schumacher Oct. 17 (Bloomberg) — Gas Natural SDG SA , Spain’s largest natural gas company, agreed to sell its 63.8 percent stake in Empresa de Energia del Pacifico SA of Colombia for $1.1 billion as part of a plan to cut debt. Colinversiones SA, Inversiones Argos SA and Banca de Inversion Bancolombia SA will buy the stake in the Colombian power company by making a bid for 66.1 percent of EPSA’s stock at 9,164.84 Colombian pesos ($4.96) a share, Barcelona-based Gas Natural said today in a regulatory filing. Gas Natural has agreed to accept this offer and predicted the transaction will complete before year-end. Gas Natural this year finished the acquisition of Union Fenosa SA to add power generation plants and utility clients as it faces increased competition in its domestic gas market. The natural gas supplier is now trying to cut debt following the purchase of that Spanish utility and has targeted asset sales of 3 billion euros ($4.5 billion). “The proceeds obtained from the sale of EPSA will allow the company to improve its financial structure, meeting the objectives announced after the purchase of Union Fenosa,” Gas Natural said in the statement. With the sale of the stake in EPSA, Gas Natural said today that it has reached 2.3 billion euros in asset sales and debt reduction. Net debt increased to 22.1 billion euros at the end of June and the company aims to cut it to about 18 billion euros at the end of the year. Asset Sales, Debt Gas Natural’s shares have dropped 14 percent this year, cutting the company’s market value to 12.5 billion euros. The stock fell 0.1 percent yesterday to 13.99 euros. Cia. Colombiana de Inversiones SA , the Medellin, Colombia- based holding company known as Colinversiones, on Sept. 22 had said it was interested in Gas Natural’s stake in EPSA. EPSA is a Colombian electricity distributor and power generator with installed capacity of about 1,000 megawatts, according to Gas Natural. Gas Natural said it will remain present in the Colombian market through natural gas and electricity distribution businesses. Gas Natural on July 21 said it agreed to sell other units including gas distribution pipelines and it that also planned to sell 2,000 megawatts’ worth of combined cycle plants. It has received “various” offers from companies interested in those power plants, Gas Natural Chief Executive Officer Rafael Villaseca said July 29. To contact the reporter on this story: Joao Lima in Lisbon at jlima1@bloomberg.net ; Dick Schumacher in London at dschumacher@bloomberg.net .

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Lehman Says Negotiators Knew Barclays Got $5 Billion Discount on Purchase

October 17, 2009

By Christopher Scinta Oct. 17 (Bloomberg) — Lehman Brothers Holdings Inc. executives who negotiated the sale of the bank’s North American brokerage business to Barclays Plc knew they were giving the U.K.-based bank a $5 billion discount, Lehman said in court. Executives including Ian Lowitt , Paolo Tonucci and Bart McDade knew that Barclays was getting securities valued at about $50 billion for $45 billion in cash, according to a September motion unsealed Oct. 15 in U.S. Bankruptcy Court in New York in which Lehman asked for the return of some assets. Some executives negotiating the deal knew they would receive offers to work at Barclays after the sale, Lehman said, citing e-mails and deposition testimony. The salaries offered were blacked out. “I was aware that the — that Barclays was going to purchase a substantial block of assets for less than the amount that we had on our books to reflect a sort of bid offer that reflected both the size of the purchase, as well as inherent volatility in the market, which was significant that week,” Lowitt, Lehman’s chief financial officer at the time, testified, according to the documents. A Barclays Capital spokeswoman, Kerrie-Ann Cohen , and Kimberly Macleod , a Lehman spokeswoman, declined to comment. Lowitt declined to comment through a spokesman. Tonucci, then Lehman’s global treasurer, didn’t respond to messages seeking comment. McDade, then the bank’s president, couldn’t be reached. Lehman’s assets were under the control of the bankruptcy court when Barclays paid $1.54 billion for them in a sale that closed Sept. 22. Facts Held Back “Material components” of the deal were kept from U.S. Bankruptcy Judge James Peck , who approved the sale, Lehman said, giving Barclays an “immediate and enormous windfall profit” that may have exceeded $8.2 billion when liabilities Barclays assumed are taken into account. Lehman filed the largest bankruptcy in U.S. history on Sept. 15, 2008, with assets of $639 billion. The collapsed bank asked to revise the deal and be allowed to pursue claims for breach of contract, breach of fiduciary duty and unauthorized transfer of assets. The request is supported by Lehman’s unsecured creditors and James Giddens , the trustee liquidating Lehman’s brokerage on behalf of the U.S. Securities Investor Protection Corp. The fight between Barclays and Lehman’s creditors over the value of assets transferred is set to last well into next year. Peck said Oct. 15 he wanted to hear live testimony rather than rely completely on depositions. He advised parties to discuss May trial dates. Regulators’ Support Government regulators supported the speedy sale to Barclays at the time in an effort to calm global securities markets. Some Lehman creditors fought it, saying the deal was moving too quickly and London-based Barclays was underpaying. Lehman and Barclays held talks about an acquisition by the U.K. bank in the days before Lehman’s bankruptcy, without agreeing on a deal. Within hours of the court filing, Barclays approached Lehman and negotiated an agreement “very quickly” as the value of Lehman’s assets tumbled, according to court papers. During a hearing on the deal before Peck, negotiators changed some terms without disclosing them to the court, according to Lehman’s filing by attorneys at Jones Day . Lehman asked in May for permission to investigate whether Barclays got too good a deal after the U.K. bank’s financial results for 2008 showed a gain of 2.26 billion pounds ($3.72 billion) from the acquisition of Lehman’s North American operations. The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan). — With assistance from Linda Sandler and Josh Fineman in New York. Editors: David E. Rovella , Charles Carter To contact the reporter on this story: Christopher Scinta in New York at cscinta@bloomberg.net .

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Realtors fight transfer tax increase

October 14, 2009

All but 13 states have passed what is called a transfer tax. The tax would work just like a sales tax where the seller would be charged a percentage of the price of the sale.

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Chicago Cubs Receive Approval for Sale to Ricketts Family After Bankruptcy

October 13, 2009

By Steven Church Oct. 13 (Bloomberg) — The Chicago Cubs won court approval to transfer control of the baseball team to the family of Joe Ricketts , the TD Ameritrade Holding Corp. ’s founder, one day after the sports franchise filed for bankruptcy. The team yesterday joined its owner, the newspaper publishing company Tribune Co. , in court protection as part of a plan to transfer the Cubs to the Ricketts family. The $845 million in loans to fund the sale is in escrow awaiting the approval of U.S. Bankruptcy Judge Kevin Carey , Bryan Krakauer , a Cubs lawyer, said today in court in Wilmington, Delaware. “The transaction is ready to close, save for the approval of this court,” Krakauer said. Using a process previously approved by Carey, Tribune will transfer the Cubs to a new entity controlled by the family. Chicago-based Tribune is to keep a 5 percent stake in the team. The deal promises to bring Tribune creditors $740 million, according to court records. Arrangements for the bankruptcy and the sale in the two months leading up to today’s ruling included notifying more than 9,000 creditors of the team of the transfer and the planned Chapter 11 filing, Krakauer said. The Cubs case is In re: Chicago National League Ball Club LLC, 09-13496, and the Tribune case is In re Tribune Co., 08- 13141, U.S. Bankruptcy Court, District of Delaware (Wilmington). — Editors: John Pickering , Charles Carter. To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net .

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Bernard Madoff’s Mercedes-Benz to Be Auctioned by U.S. Marshals

October 13, 2009

By John Gittelsohn Oct. 12 (Bloomberg) — A 2001 Mercedes-Benz E320 once owned by convicted conman Bernard Madoff and his wife is going on the auction block next week. The black station wagon with 44,146 miles is among 33 vehicles that will be auctioned on Oct. 23 in East Brunswick, New Jersey, as part of a sale of vehicles seized by or forfeited to the U.S. Marshals Service. A Mercedes like Madoff’s has a suggested retail value of $13,727 to $19,530, according to estimates from auto pricing services Kelley Blue Book and Edmunds.com. The Madoff heritage probably won’t add to the car’s auction price, said Tim Minoughan, auction manager for CWS Marketing Group, which is conducting the sale for the marshals. “If it were a Bentley or a Rolls Royce or something really high valued, then that would be splash flash,” Minoughan said. “It’s hard to do that with an E320 wagon.” Other vehicles at the auction range from a non-operational 1997 Nissan Maxima with 127,000 miles — Kelley Blue Book value $2,450 — to a 2006 Mercedes Benz SLR McLaren, which Edmunds.com says is worth $357,000. Sam Israel’s RV There’s also a 2007 Coachmen Freelander recreational vehicle with 8,939 miles on the odometer that belonged to Samuel Israel, founder of the Bayou Group LLC hedge fund, who was sentenced to 20 years in prison for a $400 million fraud. Similar vehicles originally sold for $69,999. Madoff and his wife, Ruth, who has not been indicted, agreed in June to forfeit $170 billion in assets to settle claims with the U.S. Justice Department. The agreement covered real estate, investments, cars, boats, artwork and other property. Madoff is serving a 150-year prison sentence. The U.S. Marshals Service has put up for sale three of Madoff’s former homes — a penthouse at 133 E. 64th Street in Manhattan, a beachfront home in Montauk, New York, and a waterfront estate in Palm Beach, Florida. The Montauk beach house, near the eastern tip of Long Island, sold for more than the $8.75 million asking price in September, according to Joan Hegner, a broker with the Corcoran Group who handled the sale. “We hope to close next week on the Montauk residence,” Roland F. Ubaldo , supervisory deputy of the U.S. Marshals Service, said in an e-mail. “Both Palm Beach and NYC penthouse still receiving a substantial amount of interest.” To contact the reporter on this story: John Gittelsohn in New York at johngitt@bloomberg.net .

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Reverse-Mortgage Abuse May Trigger Next Financial Crisis, Law Center Says

October 6, 2009

By Alexis Leondis Oct. 6 (Bloomberg) — Reverse mortgages may be the next subprime crisis, according to the National Consumer Law Center. Some of the same U.S. lenders that helped drive the real estate boom with loans to home buyers who couldn’t afford the payments are now targeting seniors, the center said. Brokers, who are given financial incentives to sell the loans, may be making misleading claims to potential customers, according to a report released today by the Boston-based NCLC. “This market is designed to serve seniors, so when we find abuses cropping up and migrating from the subprime market to the senior market, that sounds an especially loud warning bell,” said Rick Jurgens, an advocate at the National Consumer Law Center, who contributed to the report. Reverse mortgages enable people aged 62 and over who are looking for extra cash to use the equity in their homes and receive lump-sum payments, periodic checks, a line of credit, or a combination of the three. Lenders are repaid from the sale of the home when the borrowers die or move. The former maximum payout for reverse mortgages backed by the Federal Housing Administration was $417,000. That limit was increased temporarily to $625,500 in February. Origination fees are capped at $6,000. In 2008, more than 100,000 seniors used reverse mortgages to tap over $17 billion in home equity, according to the Housing and Urban Development Department. Consumer Protections “These can be good things for certain people, but there are many pitfalls and we need transparency and consumer protections,” said Senator Herb Kohl , a Wisconsin Democrat, and chairman of the Senate Special Committee on Aging, in an e- mailed statement. Kohl and Senator Claire McCaskill , a Missouri Democrat, released a government report in June that said some lenders falsely market reverse mortgages as “lifetime income” and sell mortgages coupled with other financial products such as annuities even though Congress banned so-called cross-selling in 2008. The center’s study recommended enhancing borrower counseling prior to taking out a loan and holding lenders and brokers to a suitability standard. Criticisms of the reverse mortgage industry don’t take into account recent safeguards and enhancements such as capped fees and mandatory counseling, said Peter Bell, president of the National Reverse Mortgage Lenders Association in Washington. Risks that contributed to the collapse of the subprime- mortgage market also are a concern in the sale of reverse mortgages, said John Dugan , head of the Office of the Comptroller of the Currency, at an American Bankers Association conference in June. Complex lending products have the potential to result in “skewed incentives” for servicers that are underwriting reverse mortgages, and the product is “fraught with consumer compliance concerns,” he said. HUD insured 112,015 reverse mortgages in the year that began Oct. 1, 2007, and the total was 69,493 through six months of the 2009 fiscal year, according to the OCC. The government backed 157 reverse HUD mortgages in 1990. To contact the reporter on this story: Alexis Leondis in New York aleondis@bloomberg.net .

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New Home Valuation Code of Conduct cures some ills, creates new ones

August 22, 2009

… message has reverberated through the Tampa Bay real estate community ever since the government’s antifraud rules … sale involved a foreclosed home or a non-distressed property. Since the new rules took effect, …

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Reader's Digest goes to lenders in planned bankruptcy filing

August 17, 2009

Delphi defends sale to Platinum, says it has been open to buyers since entering bankruptcy . June 25th, 2009 Delphi defends asset sale to private – equity firmNEW YORK — Auto parts maker Delphi Corp. defended the sale of a portion of its …

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