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Bank Watch: New Mexico’s Largest Bank Fails, Acquired by U.S. Bank

by on February 3, 2011

U.S. Bank has acquired the banking operations of First Community Bank in Taos, NM, from the Federal Deposit Insurance Corporation (FDIC). First Community Bank was closed by the New Mexico Financial Institutions Division, which appointed the FDIC as receiver. Under the terms of this transaction, U.S. Bank will receive approximately $2.1 billion of assets and assume approximately $2.1 billion of liabilities, including $1.8 billion of insured and…

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Bank Watch: New Mexico’s Largest Bank Fails, Acquired by U.S. Bank

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Rizvi Traverse Management, LLC and Ziegler Capital Management, LLC Announce Transaction

by on May 21, 2010

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Continue here: Rizvi Traverse Management, LLC and Ziegler Capital Management, LLC Announce Transaction

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Oaktree Set to Take Control of Almatis Under $1 Billion Debt Restructuring

March 10, 2010

By Patricia Kuo March 10 (Bloomberg) — Oaktree Capital Management LLC , a Los Angeles-based investment fund, is poised to take control of alumina products-maker Almatis under the terms of the company’s $1 billion debt restructuring. Oaktree will take 86.5 percent of Almatis’s equity under the plan, which has been approved by two thirds of the Frankfurt-based company’s senior lenders, according to a presentation seen by Bloomberg News. In exchange, senior lenders will write down Almatis’s loans to between 45 cents and 86.5 cents on the dollar in a so-called debt-for-equity swap. Almatis said in a statement today it’s “pleased that a consensus has been reached by a majority of its senior lenders and is presently considering its response to this development.” Banks including UBS AG and Bahrain-based Arab Banking Corp. helped finance Almatis’s buyout in 2007 with $970 million of loans, including $235 million in junior debt. The company breached terms of the loans in the first half of last year as the global economic slowdown hurt demand for its products. Dubai International Capital LLC, the state-owned investment company that bought the alumina maker for an undisclosed amount in 2007, won’t recover its investment in Almatis unless it’s sold, according to the presentation, which was sent to senior lenders by their adviser, N.M. Rothschild & Sons Ltd., today. Junior lenders may recoup some of their money if the company is later sold for $325 million or more, according to the presentation. The proposal will allow Almatis to cut its debt to about $420 million and to seek protection from creditors under Chapter 11 bankruptcy, according to the presentation. Fiona Mulcahy , a London-based spokeswoman for Dubai International, declined to comment. An official at Oaktree Capital, which was founded in 1995 and has about $73 billion under management, also declined to comment. To contact the reporter on this story: Patricia Kuo in London at pkuo2@bloomberg.net

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Fortress Said to Be Near Restructuring of Resort Operator Intrawest’s Debt

February 27, 2010

By Cristina Alesci Feb. 27 (Bloomberg) — Fortress Investment Group LLC has agreed with lenders on the outline of a debt restructuring for Intrawest ULC, owner of Olympic downhill skiing resort Whistler Blackcomb, said a person with knowledge of the talks. Under the plan, Intrawest’s $1.2 billion of debt would be divided into a senior tranche of $800 million and a mezzanine tranche of $400 million, said the person, who declined to be identified because the discussions are private. The parties have set an April 16 deadline to complete negotiations. Fortress or its funds would have to put in an additional $150 million to buy equity in the resort company under the terms of the deal. Two Fortress-backed funds already kicked in $345 million in October 2008 to keep lenders at bay. Creditors led by Lehman Brothers Holdings Inc., Davidson Kempner Capital Management LLC and Oak Hill Advisors LP have sought control of Intrawest since it missed a final payment on a $1.4 billion loan due in December. The Vancouver-based company has struggled even after layoffs and other expense reductions. The lenders’ administrative agent originally set a Feb. 19 date to auction off Intrawest assets, which include the ski resort where Lindsey Vonn won her Alpine gold at the Winter Games. Intrawest would pay 10 percent interest on the senior debt under the agreement, while lenders are demanding as much as 17 percent for the mezzanine debt, said the person. The interest on the mezzanine part will depend on the payment terms, which have not been disclosed. Buyout Financing The original loan of about $1.4 billion, used to finance the buyout in 2006, called for an interest rate of 275 basis points above the London interbank offered rate. A basis point is one hundredth of a percent. Libor is the rate banks charge to lend to each other. Intrawest, founded in 1976, runs ski and golf resorts in Canada and the U.S. It sells vacation timeshares through its Club Intrawest unit and owns Canadian Mountain Holidays, the world’s largest heli-skiing operation, according to its Web site. Heli-skiing runs are reached via helicopters rather than ski lifts. Fortress, which is negotiating with lenders on behalf of Intrawest, agreed to buy the company in August 2006. Investors in Fortress’s Fund IV, Fund IV Co and FICO funds saw their collective $1.7 billion equity stake shrink to 4 cents on the dollar as of Oct. 31. To contact the reporter on this story: Cristina Alesci in New York at calesci2@bloomberg.net

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Ford: Buyouts, Early Retirement Offered To All 41,000 Of Its U.S. Hourly Workers

December 21, 2009

DETROIT — Ford Motor Co. has offered buyout or retirement incentive packages to all of its 41,000 U.S. hourly workers as it tries to further reduce its factory work force. Ford, the healthiest of Detroit’s three automakers and the only one to avoid government aid and bankruptcy protection, still has more workers than it needs to produce cars and trucks at current sales levels, said company spokesman Mark Truby. He would not say how many workers Ford expects to take the packages, which include cash payments and other incentives such as vouchers to buy cars and short-term health insurance coverage. “We’re just going to try to right-size our manned capacity and align it with demand,” Truby said. Ford currently has 634 blue-collar workers on layoff in the U.S. Under the terms of a new contract with the United Auto Workers union, the employees get most of their pay for a year depending on seniority, and a portion of their wages for another year before they are removed from the company payroll. In the past, laid-off workers went into the “jobs bank” and were paid indefinitely even if their factory had been shut down. But the union agreed to scrap the jobs bank earlier this year when all three Detroit automakers ran into financial troubles. The buyout package, offered to workers with at least a year of service, includes $50,000 cash and the choice of a $25,000 voucher to buy a vehicle or $20,000 more in cash. The deal also includes basic health care coverage for six months, Ford said. Retirement-eligible workers can take the buyout but must wait up to 18 months before retiring. The retirement package includes $40,000 for skilled trades workers and $20,000 for nonskilled employees. To be eligible, workers have to have either 30 or more years of service, be age 55 or older with 10 or more years of work, or they can be 65 with at least one year of service, the company said. Earlier this year, only 1,000 workers took similar packages, the company said in July. Ford started 2009 with 89,000 employees in North America but reduced that number to 80,200 as of Sept. 30 through attrition, buyouts and layoffs. Truby said the additional offer has nothing to do with the UAW membership rejecting a second round of contract concessions earlier this year. Workers at General Motors Co. and Chrysler Group LLC approved the concessions, so Ford is operating at a small cost disadvantage. Ford sales were down 19 percent through November when compared with the same time last year. But the company has fared better than the U.S. auto market as a whole, which is down 24 percent for the year. GM and Chrysler sales are both off more than 30 percent. In 2006, Ford had 75,000 unionized workers in the U.S., but since then it has closed 12 factories and reduced its work force with buyout and early retirement offers as part of a massive restructuring plan. The company plans to close four more factories by the end of 2011.

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Bailout Payback: Wells Fargo, Citigroup Repay $45 Billion In TARP Funds

December 14, 2009

SAN FRANCISCO — Wells Fargo plans to sell $10.4 billion in new stock to help repay all $25 billion in bailout aid it received from the government at the height of the market meltdown last fall. The announcement Monday from the San Francisco-based bank comes hours after Citigroup Inc. said it would repay $20 billion worth of taxpayer funds. Wells Fargo spokeswoman said the company wasn’t making the announcement out of pressure following Citigroup’s move. “We’ve said for quite some time that we wanted to repay at the appropriate time,” she said. The move will extricate Wells Fargo from the pay restrictions and close oversight that came with the bailout program. The company said it paid $1.4 billion in dividends to the government under the terms of its agreement. Wells Fargo said it expects the plan will reduce its fourth-quarter income by $2 billion but add to its per-share earnings in 2010. Handing back the money will save the bank from paying $1.25 billion a year in preferred stock dividends. The company plans to come up with $1.35 billion by awarding stock in place of some of the cash it had planned to use for bonuses and by issuing its stock to company benefit plans. Wells Fargo also plans to sell $1.5 billion in assets by the end of next year or raise more capital to reach that amount. Citigroup said Monday it would pay back the $20 billion it took from the government’s Troubled Asset Relief Program, which was designed last year to help stabilize the financial system by giving banks a cash cushion. The money also brought government oversight. Banks have been eager to give back the money to lift restrictions on pay and to sidestep some of the public frustration over big paychecks at some financial companies while the nation’s unemployment rate stands at 10 percent. Banks have been under pressure to tamp down bonus pay. Goldman Sachs Group Inc. said last week its top executives wouldn’t get cash bonuses for 2009 and would instead get stock that couldn’t be sold for at least five years. Pledges to repay the government also came on the day top bankers met with President Barack Obama at the White House. He asked them to consider “every responsible way” to boost lending, particularly to small businesses. Wells Fargo made the announcement about the repayment after the closing bell on Wall Street. Its shares rose 56 cents, or 2.2 percent, to $26.05 in after-hours electronic trading. The stock ended regular trading at $25.49, a gain of 8 cents.

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Exxon Mobil Agrees to Buy XTO Energy for $31 Billion in Stock Transaction

December 14, 2009

By Colleen McElroy Dec. 14 (Bloomberg) — Exxon Mobil Corp. agreed to buy XTO Energy Inc. in an all-stock transaction valued at $31 billion. Under the terms of the agreement, approved by the boards of directors of both companies, Exxon has agreed to issue 0.7098 common shares for each common share of XTO, or about $51.69 per share. This represents a 25 percent premium to XTO stockholders.

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Maurice Greenberg, AIG Settle: Legal Fees, Memoir Materials, Persian Rug Returned

November 25, 2009

NEW YORK — American International Group Inc. has agreed to settle all legal disputes with its former chairman Maurice “Hank” Greenberg, the company said late Wednesday. The insurance company, which was bailed out by the government and is now owned by U.S. taxpayers, also resolved its complaints against former Chief Financial Officer Howard I. Smith. AIG said it will pay up to $150 million in past legal fees and expenses for both Greenberg and Smith. The agreement calls for the reimbursements to be reviewed by a third party. Under the terms of the agreement, AIG will also return a Persian rug from the company’s headquarters to Greenberg, as well as photographs of Greenberg with Chinese leaders in AIG’s Shanghai building. Greenberg will also have access to AIG’s archives to write his memoirs. AIG had argued that a Greenberg-controlled investment firm owed it $4.3 billion to cover stock taken from an executive retirement fund. AIG claimed the fund was held in an oral trust for use by company employees. Greenberg argued he could sell the shares because they were controlled by his firm, Starr International. AIG had also claimed that Greenberg and Smith owe part of the $1.6 billion the insurer paid to settle a range of issues with regulators including the Securities and Exchange Commission, Justice Department and New York Attorney General. Greenberg was ousted from New York-based AIG amid an accounting scandal in 2005. The Securities and Exchange Commission charged both Greenberg and Smith with misstating the company’s earnings. AIG had agreed earlier this year to settle its disputes with Greenberg and Smith through arbitration. Around the same time in August, a judge had ruled that Starr International did not improperly seize the AIG stock from the retirement plan. Mark Herr, an AIG spokesman, said the legal costs AIG reimburses Greenberg and Smith may be covered at least partially by insurance.

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Heitman Acquiring 49.9% Interest in Two Macerich Malls for $167.5M

October 1, 2009

Macerich (NYSE:MAC) and Chicago-based Heitman have entered into a joint venture on two of Macerich’s malls — Freehold Raceway Mall and Chandler Fashion Center. Under the terms of the deal, Macerich receives $167.5 million in net cash proceeds and Heitman…

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