Thursday, June 3, 2010

Financials '; Offshore drilling insurance; Bank tax; $AIG $BX $C $BAC

· Rating agencies (MCO, MHP) – Sen Franken said on Wed that he was confident his rating agency amendment would remain in the final House/Senate reconciled legislation (DJ) – this headline hit during trading 
· Offshore drilling insurance – new Moody’s report – “Insurers and reinsurers are likely take a hard look at the assumptions used to price property and liability coverages for drilling platforms in the wake of the Deepwater Horizon loss” 
· Bank tax – no deal seen being reached at G20 meeting this weekend on global bank tax – the fin ministers and central bankers are expected to back the principles of a global tax this weekend but won’t reach agreement on specifics (Reuters)
· Banks - Moody's publishes bank review (this hit during trading on Wed).....says asset quality and charge-offs past peak, although remain near historic highs....says banks have recognized ~60% of aggregate loan losses for '08-'11 period; "The return to 'normal' levels of asset quality will be slow and uneven over the next twelve to eighteen months,"
· Banks - Fitch Ratings has revised its overall rating outlook on the U.S. banking industry to stable as financial stability is emerging at many institutions.  Fitch expects bank core earnings to continue to show slow but steady improvement over the next few quarters.
· Agricultural Bank of China plans to launch the Hong Kong portion of what could be the world's largest IPO on July 16 (Reuters)
· AIG – the co’s bankers estimated its main Asia division would be worth $32-36B after an IPO – Bloomberg

· AEC - announced that it has reaffirmed its full year funds from operations (FFO) as adjusted range of $0.86 to $0.92 per common share.  The Company also announced that it has raised its full year acquisition guidance, previously reflecting no activity, up to a range of $100 million to $150 million, which includes the $54.3 million Northern Virginia acquisition (Riverside Station), which closed on May 18, 2010. Additionally, the Company announced that it expects full year funds available for distribution (FAD) per common share (basic and diluted) to exceed the $0.68 annual dividend.
· BAC – comments from mgmt @ Bernstein conf – this hit at 2pmET on Wed – 1) repeats that seeing improving credit trends; consumer credit improving (delinquencies, charge-offs, etc); BoA is repeating comments they made on the Q1 call; 2) Seeing improvement in every product, every category; says don’t necessarily anticipate more reserve releases over next 1-2 qtrs b/c still trying to be conservative (they implied this on Q1 call also); 3) Europe not a huge direct exposure for BoA; direct exposure risk very manageable; real risk is if this causes global slowdown; 4) As we interpret the “Volcker Rules”, they won’t have a big impact on our business; most of our IB business is flow/customer-related; 5) Says BoA won’t have to raise new capital under proposed rule changes; 6) Says that dividend payout ratio going forward will prob. be much less than its been pre-crisis…. Says has to get through a lot before thinking about dividend again; 7) Says not planning more acquisitions.
· NLY – positive WSJ Heard on the Street – says NLY a safe way to capture yield (note that this stock has been highlighted on CNBC’s Mad Money also in the last couple weeks).  The stock is prob. trading at a discount to book and has a 15% dividend yield.
· EGP – Cramer made positive comments on the company during Mad Money – CNBC*blog*&par=RSS
· C – DJ discusses the recent outflow of mgmt talent at Citi; while there have been some high-profile new hires as well, the departures, esp. from Citi’s European operation, have been notable (DJ)
· Money market fund returns will be clipped further under new rules that went into effect today; some firms have stopped offering the product all together due to the inability to earn a profit in the current environment (DJ)
· Credit card issuers are finding novel ways to circumvent new laws limiting fees; the new procedures are being scrutinized by regulators (DJ)
· High profile traders are departing Wall St according to the WSJ due to worries around the sweeping new regulations being put in place (WSJ)
· BX – Blackstone is said to be opening a new larger “seeder” fund-of-fund that will contribute capital to new HF startups (WSJ)
· Bank accounting – mark-to-market proposals from the FASB would cause bank equity to jump ~$100B+ for some of the largest banks as estimated marks on core deposits would more than offset write-downs on problem assets – DJ
· V - has asked its global financial institutional members to stop international transactions through China's UnionPay system from Aug 1; UnionPay says Visa has no right to restrict payments – Reuters
· Swiss Banking Update - Swiss Panel Backs UBS-U.S. Deal but Urges Referendum – NYT
· SCHW – stock upgraded at FBR Capital

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