- Bank Loans Lure KKR, Carlyle With Junk-Bond Returns
- Top Wall Street jobs still elude women, minorities
- GLG fined €1.2m over Alcatel trading
- Pegasus, Merrill Lynch Create Argentina Property Fund
- Feds probe fake Apple documents
More headlines below
- Investors weigh iPod holiday fervor vs. Apple backdating probe
- Microsoft Monitoring Flaw Found in Vista Software
- Internet Services in Asia May Take 2 Weeks to Return
- Virgin America’s Bid to Start Flights Denied by U.S.
- Citigroup, JPMorgan Pay $4.5 Million in Enron Accord
- Heard on the Street: Wal-Mart Blames Short-Term Woes, But Some Expect Challenges to Remain
Bank Loans Lure KKR, Carlyle With Junk-Bond Returns – Bloomberg
Investors are finding junk bond yields with about half the risk in an unlikely place: the U.S. loan market.
Borrowers with non-investment-grade ratings such as photography company Eastman Kodak Co. and tissue maker Georgia Pacific Corp. pay interest of 7.80 percent on average for loans, a quarter of a percentage point below yields on bonds with similar ratings. The gap is the narrowest in eight years, according to data compiled by Lehman Brothers Holdings Inc.
What makes loans more attractive than bonds to many investors is that they are secured by company assets. Creditors have recovered 71 percent of their principal in a default with loans, compared with 38 percent for speculative-grade, or junk, bonds, Moody’s Investors Service says. Unlike bonds, the only way for most individuals to buy loans is through a mutual fund…..
Top Wall Street jobs still elude women, minorities – Reuters
Even though Wall Street investment banks have made diversity a top priority for the past decade, it may take several more years before women and minorities gain a foothold in the ranks of senior management.
That forecast comes from industry experts, investment bank diversity chiefs and trends in hiring data.
Minorities and women continue to be squeezed in Wall Street’s promotion pipeline when it comes to attaining senior positions — those at the managing director level and above that reaped multimillion-dollar bonuses this year.
"The numbers indicate the squeeze is real," said Subha Barry, head of diversity at Merrill Lynch & Co…..
GLG fined €1.2m over Alcatel trading - Financial Times via MSNBC
France’s stock market regulator has imposed a heavier fine than expected on GLG Partners for the British hedge fund’s actions in relation to a 2002 bond issue by Alcatel, the French telecoms group.
According to people close to the situation, the Autorité des Marchés Financiers has fined GLG €1.2m over the actions of its former star trader Philippe Jabre.
However, the watchdog reduced the fine for Deutsche Bank, which underwrote the issue, from a recommended €1.5m – the maximum – to €300,000.
The fine will come as a blow to Mr Jabre, who began accepting money for his new Geneva-based hedge fund this month…..
Pegasus, Merrill Lynch Create Argentina Property Fund – Bloomberg
Argentine buyout fund Pegasus Capital and Merrill Lynch & Co., the biggest U.S. brokerage firm, are setting up a $200 million fund to invest in real estate as the economy expands, Pegasus managing partner Mario Quintana said.
The fund, called Pegasus Real Estate Fund I, will invest in commercial and residential properties as well as tourism projects, Quintana said. It already has residential investments in the Buenos Aires neighborhood of Caballito and an office building in the city’s financial district.
“Demand for property will increase as salaries are rising, thanks to the recovery,” said Quintana. “The perception of risk in this country has dropped, making it much more attractive for investment.”….
Feds probe fake Apple documents – Mercury News
Apple Computer Inc. shares had the biggest drop in almost six months after a legal newspaper said federal prosecutors are examining whether company officials falsified documents to inflate the value of options grants.
The fake documents were uncovered by the iPod maker during an internal probe that concluded in October, The Recorder said on its Web site today, citing individuals familiar with the case. The information was passed on to the U.S. Attorney’s office, according to The Recorder, which is based in San Francisco.
When Cupertino, California-based Apple released the results of its three-month investigation in October, it didn’t disclose any falsified documents. At the time, the company said it found options awards were backdated on 15 occasions between 1997 and January 2002…..
Investors weigh iPod holiday fervor vs. Apple backdating probe – Mercury News
We’re betting a lot of you did your share for Apple Computer in the holiday quarter, buying iPods, accessories and iTunes gift cards for your friends and loved ones — or maybe even yourself.
On the other hand, the Cupertino tech giant — like many other Silicon Valley companies — also finds itself embroiled in a stock-option backdating mess. Early today, in fact, Wall Street responded to a San Francisco legal newspaper’s report about Apple’s backdating probe by sending the company’s stock sharply lower. Apple’s shares, in fact, dipped as low as $76.77, down 5.8 percent from the day before.
On its Web site, The Recorder — quoting individuals familiar with the case — said Apple’s internal probe found apparently falsified documents that were used to maximize the profit potential of stock-option grants to company executives. Some investors were particularly alarmed at the paper’s report that Chief Executive Steve Jobs had hired his own outside counsel.
By the end of the day, however, analysts were downplaying the significance of Jobs’ move, essentially saying that of course he would hire his own attorney to deal with the Securities and Exchange Commission and the Justice Department. “That’s standard operating procedure,” ThinkEquity analyst Jonathan Hoopes told Bloomberg News. “A company at the end of the day has to defend itself. We still don’t think he’s going to lose his job.”….
Microsoft Monitoring Flaw Found in Vista Software – Bloomberg
Microsoft Corp., the world’s largest software maker, is monitoring a flaw in its newly released Windows Vista software to ensure hackers don’t manipulate the operating system.
Microsoft is still investigating the problem, Mark Miller, director of the Microsoft Security Response Center, said in an e-mail today. The vulnerability, which makes it possible to shut down a Web site or gain more access privileges, is also in previous versions of Windows, Microsoft said last week.
Vista, released to corporate users on Nov. 30 after more than two years of delays, is the first new version of Microsoft’s Windows operating system since 2001. The flaw poses only a minor threat, according to Symantec Corp., the world’s biggest maker of security software, because attackers must already have access to computers they want to compromise…..
Internet Services in Asia May Take 2 Weeks to Return – Bloomberg
Internet and phone access in Asia may take at least two weeks to resume full services as carriers prepare to fix undersea cables damaged by earthquakes off Taiwan.
Chunghwa Telecom Co., the island’s biggest phone company, said four ships are heading to the site off Taiwan’s south coast for repairs starting Jan. 2 that may take two to three weeks. China Network Communications Group Corp. said two boats have started to fix the fiber-optic lines.
Companies from Kuwait Finance House, the Persian Gulf’s largest Islamic investment bank, to Nippon Yusen K.K., Japan’s biggest shipping line, are suffering from the loss of online services after a 7.1 magnitude quake struck southern Taiwan on Dec. 26. Cable operators are using other lines or satellites to help alleviate the bottleneck as parts of Hong Kong, China, Singapore and India remain without access…..
Virgin America’s Bid to Start Flights Denied by U.S. – Bloomberg
Virgin America Inc., a startup airline partly owned by U.K. billionaire Richard Branson, won’t be able to begin flights because of U.S. government concerns about foreign ownership.
Before it can start service, Virgin America must revise its corporate structure to show U.S. citizens own and control at least 75 percent of the company, the U.S. Transportation Department said today. Branson’s closely held Virgin Group Ltd. put up 25 percent of the initial $177 million investment to start Virgin America, as well as a $53 million loan.
The decision is a victory for U.S. rivals that opposed the Virgin America bid as well as for organized labor, which feared job losses. It’s a blow to Branson’s plan to funnel U.S. passengers to his trans-Atlantic carrier and expand the Virgin brand in the world’s largest travel market….
Citigroup, JPMorgan Pay $4.5 Million in Enron Accord – Bloomberg
Citigroup Inc., JPMorgan Chase & Co. and other defendants agreed to pay Ohio state pension funds $4.5 million to settle any liability related to the fraud that destroyed Enron Corp. five years ago.
The funds, which balked at joining an earlier settlement with former Enron lenders, asked a federal judge in Houston to dismiss their claims against the banks as part of a Dec. 15 agreement, according to papers filed yesterday in Houston federal court.
The Ohio pension funds pursued their claims separately from Enron investors who have recovered more than $7 billion in their case against former Enron banks, law firms and officers. Citigroup, the biggest U.S. bank, and JPMorgan, the third- biggest, previously settled claims by investors in the securities class action…..
Wal-Mart Stores Inc. cites a clutch of short-term problems behind its slowing pace of sales late this year, but bearish observers say looming challenges could hinder the retailer through 2007 and beyond.
Wal-Mart executives fingered disruptions from store remodeling, an overly aggressive bet on a new line of women’s apparel and a slip from sales temporarily boosted by 2005 hurricane-recovery efforts to explain lackluster results at its established stores.
Same-store sales, or sales at U.S. stores open at least a year, fell 0.1% last month from the year-earlier period — the second such decline for the Bentonville, Ark., retailer in 27 years…..
