Search results for

An independent analyst and a portfolio manager say last week's spread widening in the bonds of Household International has created an opportunity to add exposure to the credit. J.P. Weaver, portfolio manager of $1 billion in taxable fixed income at McGlinn Capital Management in Wyomissing, Pa., says he will add to the firm's holdings of Household five-year notes if they continue to widen a bit more, though he declined to give the specific level he was looking for. Last Wednesday morning, the 5.75% notes of '07 (A2/A-) widened some 70 basis points to 520 over Treasuries. McGlinn says Household's proposed $484 million settlement of predatory lending issues and stated commitments to increase its capital reserves give him confidence that the finance company will turn things around.

A $50 million piece of Federal-Mogul's bank debt changed hands almost two weeks ago in the 47-49 context, and small pieces of the paper continued to trade in the 48-52 context last week. Comerica is believed to have sold the large piece, while Bank of Tokyo-Mitsubishi was rumored to be unloading some exposure. The recent activity was prompted not only by regulatory pressures but by fears that issues affecting Ford Motor and General Motors could trickle down to car-part producers such as Federal-Mogul, according to sources.

Investment banks with long positions in collateralized debt obligations on their balance sheets are repackaging them and will sell them privately in an effort to minimize exposure to underlying corporate risk. "Every active credit derivatives house is looking to [repackage CDOs for the private market]," says Chris Carman, head of synthetic securitization at Citigroup in London. He says Citigroup has successfully completed a private CDO repackaging.

MONY Capital Management, a subsidiary of the MONY Group, is looking for an asset-backed securities analyst. Bill Sidford, senior managing director and chief ABS portfolio manager, says the new hire will replace an analyst who recently left and will bring the number of ABS analysts to four. The analyst would report to Sidford. He or she would cover various asset classes such as credit card or autos, without any particular specialization. Sidford says he is "hopeful" of filling the position before year-end.

The bank debt of Nextel Communications bounced back up to the 88 level, with a trade taking place last Tuesday. Dealers said the name was stronger because of the rally in the equity markets early last week. Later, however, the paper lost momentum and trades were quoted at 87 5/8 and 87 1/2 by week's end.

The bank debt of Crown Cork & Seal received a boost from its latest positive earnings last week, as well as the confirmation that the company would go ahead with its spin-off of Constar International. The company posted net income of $0.34 per diluted share last quarter, compared to a loss of $0.10 per diluted share during the third quarter last year. The bank debt rallied from the 85 level and was trading in the 87 1/2 - 88 1/2 range following the news. Calls to Timothy Donahue, senior v.p. of finance, were not returned by press time.

Credit Agricole Indosuez plans to set up a global structured products desk in New York and will hire a team of eight to 10 staffers, including traders and structurers, as well as a head for the business. Industry officials familiar with the firm's plans noted the French manager has been planning the launch for some time, but has experienced delays in getting board approval. Credit Agricole is now waiting on licensing approval by regulators, which is likely next month.

Standard Chartered on Tuesday confirmed plans to proceed with its share offering and dual primary listing in Hong Kong. Goldman Sachs will start the deal on October 21, with pricing on October 26 and listing on October 31. The new share issue will total no more than 5% of the existing issued share capital and will be at a discount of up to 5% to the London close before pricing. The bank derives two-thirds of its profits from Asia and wants to raise its profile in the region. The issue has been on the back burner since last year, but the share price is now close to £7.00, the same as when the deal was pulled after the September 11 terrorist attacks.

The Korean government sold 35.817m shares of Korea Tobacco & Ginseng this week, but the global offering fell about one-third short of its target, securing only $230m from international funds. However, the result was a considerable achievement given poor global equity market conditions and the KT&G share price performance on the day of pricing.

ABN Amro and UBS Warburg have hard underwritten the IPO of MobileOne, Singapore's second largest mobile phone operator. The two leads are understood to be talking to other houses to join as co-leads and take a portion of the hard underwriting. However, some banks are wary of the deal, citing limited fees for high risk and little control over the issuance process. One banker in Hong Kong said yesterday (Thursday) that the terms on which banks had been invited to participate remain unclear. The leads hope to launch the deal before the planned China Telecom offering.

Australian lender Members Equity Pty Ltd this week launched its first SEC registered global bond, a $1.4bn issue. Superannuation Members' Home Loans Ltd (SMHL) Global Fund No 3 is the largest dollar denominated Australian RMBS since Westpac's 1998 offering of just over $1.4bn.