- Assured Guaranty Ltd. Announces Commitment by Wilbur Ross to Purchase Up to $1 Billion of Common Equity
- Financial Firms Face $600 Billion of Losses, UBS Says
- MF Global takes $141m hit trading wheat
- Thornburg Hit With Margin Calls
- Credit Default Swap Losses Hurt Swiss Re’s Net Income
- Dell’s Profit Drop Dogs Turnaround Push
- WPP paints upbeat picture for 2008
- EBay Agrees to Settle `Buy It Now’ Patent Lawsuit
Assured Guaranty Ltd. Announces Commitment by Wilbur Ross to Purchase Up to $1 Billion of Common Equity
- BusinessWire
Assured Guaranty Ltd. (NYSE:AGO) (“Assured” or “the Company”) announced today that it has signed an agreement for WL Ross & Co. LLC (“WL Ross”) to purchase $250 million of common shares of Assured and to provide a commitment to purchase up to $750 million of additional common shares of Assured at the option of the Company. The closing of the initial $250 million investment is subject to regulatory approvals and other customary conditions. The closing of any subsequent investments will require shareholder approval, which the Company will request at its 2008 annual general meeting.
“We are extremely pleased that Wilbur Ross has chosen Assured as his preferred investment vehicle in the financial guaranty industry,” commented Dominic Frederico, President and Chief Executive Officer of Assured Guaranty Ltd. “This flexible capital source will allow us to continue to capitalize on the significant growth opportunities we see and will support our further expansion in both the direct and reinsurance markets.”
Wilbur Ross, Chairman and Chief Executive Officer of WL Ross & Co. LLC stated, “We believe that Assured has an excellent opportunity during this time of uncertainty in the financial markets to provide investors with credit enhancement products in both the public and structured finance markets. We look forward to a long and profitable association with Assured.”
The purchase price per common share for the initial investment will be the higher of (i) 97% of the average of $22.43 (the Company’s NYSE closing price on Friday, February 22, 2008) and the average NYSE closing price for Friday, February 29, 2008 and Monday, March 3, 2008, or (ii) $21.76 (97% of $22.43). A condition to closing the initial investment is that Wilbur Ross, Chairman and Chief Executive Officer of WL Ross, will be appointed to the Company’s Board of Directors…..
Financial Firms Face $600 Billion of Losses, UBS Says
- Bloomberg
Financial firms are likely to face at least $600 billion of losses as the crisis triggered by the collapse of subprime mortgages batters banks, brokers and insurers, UBS AG analysts said in a report today.
Financial institutions have disclosed more than $160 billion of writedowns and credit losses. Banks and brokers stand to lose $350 billion, according to estimates from UBS’s global banking team.
“We have to recognize the risk that the economy will suffer more damage than what consensus suggests,” wrote Geraud Charpin, head of European credit strategy at UBS in London. “All the investment schemes that have been built on the basis of a strong and resilient economic backdrop have to be unwound/ scaled down.”….
MF Global takes $141m hit trading wheat
- Financial Times
A wheat trader at MF Global, one of the world’s biggest commodities brokerages, lost $141.5m by making “unauthorised” trades, the company reported on Thursday, in the latest trading controversy to hit global markets.
“This is embarrassing for us and it’s upsetting,” said Kevin Davis, chief executive of MF Global, which said it had “terminated” the employee, who it identified as Evan Dooley, 40, from the group’s Memphis office.Although the amount lost is substantially less than the €4.9bn (£3.7bn) that Jérôme Kerviel, the French trader, allegedly cost Société Générale, the French bank, it is believed to be the largest suspected unauthorised trade loss in agricultural markets…..
Thornburg Hit With Margin Calls
- Wall Street Journal
Thornburg Mortgage Inc. has had to meet more than $300 million in margin calls the past two weeks as it said the market for securities backed by Alt-A mortgages worsened suddenly.
The payments has cut into the mortgage lender’s liquidity and that it could be required to sell assets if margin calls continue.
Shares of the real-estate investment trust slumped on the news, recently trading down 16% at $9.72.
Thornburg said in its annual report, filed Thursday with the Securities and Exchange Commission, that the calls were on $2.9 billion in securities backed by Alt-A mortgage collateral….
Credit Default Swap Losses
Hurt Swiss Re’s Net Income – Wall Street Journal
Swiss Reinsurance Co Friday reported a meager fourth-quarter net profit as losses linked to credit default swaps hurt its bottom line.
The Zurich-based reinsurer, which expects more losses from these instruments going ahead, said fourth quarter profit stood at 170 million Swiss francs ($161.8 million.)
The company, which hasn’t previously reported quarterly earnings, didn’t provide a comparison figure.
For the full-year, Swiss Re said net profit fell 8.7% to 4.16 billion francs from 4.56 billion…..
Dell’s Profit Drop Dogs Turnaround Push
- Wall Street Journal
Dell Inc. posted a 6.5% drop in profit and a 10% revenue increase for its fiscal fourth quarter, missing Wall Street estimates and raising questions about the personal-computer maker’s efforts to turn itself around.
The Round Rock, Texas, company also said it has seen "more conservative spending" in recent months, especially from financial-services customers. The comments will likely unsettle an already rattled technology sector, which is expected to suffer from slowing U.S. business spending. Cisco Systems Inc. also said this month that its customer orders dropped off in January.
Dell has been working to get back on top after losing market share to rival Hewlett-Packard Co. in the past few years and seeing its revenue and profit growth slow. In its previous quarter, Dell posted 27% growth in profit, but its current results raise new concerns…..
WPP paints upbeat picture for 2008
- Financial Times
WPP, the world’s second-largest advertising group, painted a bullish outlook for the coming year on Friday, as it announced revenue growth of 5 per cent to £6.18bn.
The company said the subprime crisis had had “little or no impact” on its financial performance and predicted that on the basis of preliminary data, 2008 should be “a better year than 2007”.WPP owns advertising agencies such as JWT, Ogilvy & Mather Worldwide and Young & Rubicam, and its outlook on advertising is regarded as a bellwether.
The group said pre-tax profit was up 5.5 per cent to £719m for the year ended December 31, boosted by a number of significant new wins at the end of last year, including accounts from AT&T and Dell…..
EBay Agrees to Settle `Buy It Now’ Patent Lawsuit
- Bloomberg
EBay Inc., the world’s biggest online auctioneer, agreed to end a lawsuit over its “Buy It Now” sales option in a case that reversed an almost 100-year-old precedent in U.S. patent law.
Financial terms weren’t disclosed. San Jose, California- based EBay said the settlement of the six-year-old dispute won’t affect 2007 results or its 2008 forecast. The company reported net income of $348 million on sales of $7.67 billion last year.
EBay said it will buy three patents from Great Falls, Virginia-based MercExchange LLC related to fixed-price sales, plus related technology. Closely held MercExchange sued EBay in September 2001. A jury in 2003 found EBay’s “Buy It Now” feature infringed MercExchange’s patents for an online marketplace. On appeal, the U.S. Supreme Court ended patent owners’ automatic right to block use of infringing products….
