Wednesday, August 25, 2010

Financials: Commercial Real Estate Market is blowing up . owners are leaving there kids in the building with the keys


· AIG – the co will decide by early next week whether to enter negotiations w/”strategic” cornerstone investors for its AIA unit prior to its full IPO.  Expectations are said to be low re pre-IPO strategic sales taking place.  AIG doesn’t think such sales are required for a successful IPO.  Reuters 

· Bank regulators on a global basis trying to formulate a plan that would impose losses on debt holders in the event of a failure; the so called “bail in” raises legal and other risks.  IN addition – a move towards “bail ins” could substantially raise bank’s cost of capital.  WSJ 

· Chinese insurers planning new wave of stock market listings – Reuters 

· Commercial real estate owners choosing to default and walk away from properties that have plunged in value; companies that have plenty of cash and are well capitalized are engaged in the same “jingle mail” that had been popular in residential real estate (mailing the keys to properties back to their banks).  There is some $1.4T worth of CRE paper coming due in ’14 and >50% is attached to properties that are currently underwater.  WSJ

· Bank deposit rates – a new study from Market Rates Insight has revealed that deposit rates being paid by banks are now the lowest on record; rates paid on accounts fell in Jul to a national average of only 0.99% (Bloomberg)

· FMR – extends buyback and declares unchanged dividend; announced today that on August 19, 2010 its Board of Directors declared a quarterly cash dividend of $0.025 per share, to be paid September 30, 2010 to shareholders of record at the close of business on September 15, 2010.  In addition, the Board of Directors authorized the extension of the Company's existing Share Repurchase Program through August 19, 2011

· GS – the co is losing debt underwriting market share; the co has slipped to 10th place vs. 9th in ’09 and as high as #3 in ’03.  Its share of this year’s $1.9 trillion in global offerings dipped to 3.7 percent, from an average 4.8 percent in the previous 10 years.  Bloomberg

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