Biggest
LBO Ends in Bankruptcy as Energy Future Files; Ranks With Enron's Collapse - (www.bloomberg.com) Energy Future Holdings Corp., the Texas power company that plans to leave
bankruptcy in less than a year, can’t reduce its $50 billion in debt without
fighting junior creditors who face losing their investment. The Dallas-based
electricity provider, taken private seven years ago by Henry Kravis and David Bonderman in a record leveraged buyout, filed for
bankruptcy yesterday in Wilmington, Delaware, after months of wrangling among creditors,
owners and management yielded a restructuring proposal. Second-lien noteholders
owed about $1.6 billion say they were shut out of those talks and want court
permission to probe what they call management’s “disabling conflicts of
interest.” They also want the case moved to Texas.
55% interest for a medical loan?! NY says no
way - (www.cnbc.com) The
sky-high interest rates on these medical loans would make you sick. Four
financing companies that were charging New York consumers up to a whopping 55
percent interest rate for loans to finance elective medical and surgical
procedures have agreed to pay more than 300 borrowers about $230,000 to settle
claims they were violating the Empire State's usury laws, officials said
Wednesday. The four lenders, who were not licensed to finance those types of
loans in the state, also agreed to lower the interest rate on the loans to no
higher than 16 percent—New York's legal maximum for unlicensed lenders,
officials said. By law, the interest rates charged by licensed lenders in New
York cannot exceed 25 percent.
Angry mayor blames California
for Toyota move - (www.cnbc.com) Torrance
Mayor Frank Scotto blames the state of California for Toyota Motor's
decision to relocate its North American headquarters from the city to Plano, Texas. "The state of California lost
Toyota," Scotto said on "Power Lunch" Tuesday. He pointed to a number of issues
in the Golden State that negatively affect companies' bottom line: tax
structure, workers' compensation and liability insurance. "There are so
many other levels of problems that we face in California that make it very
difficult for any business to be in the state of California," he added.
Growth
Freezes Up as U.S. Business Spending Slumps: Economy (www.bloomberg.com) The
harsh winter sent a chill through the U.S. economy in the first quarter as slumps in
business investment and home
construction stalled
growth. Gross domestic product grew at a 0.1 percent annualized rate from
January through March, compared with a 2.6 percent gain in the prior quarter,
figures from the Commerce Department showed today in Washington. American consumers were a lone bright spot as
households spent more to heat their homes and access health care. The pullback
in growth came as snow blanketed much of the eastern half of the country,
keeping shoppers from stores, preventing builders from breaking ground and raising
costs for companies including United Parcel Service Inc. (UPS) Another report today showing a surge in
regional manufacturing this month adds to data on retail sales, production and
employment that signal a rebound is under way as temperatures warm.
Fannie
Mae, Freddie Mac may need $190 billion in big downturn: regulator - (www.reuters.com) U.S.
mortgage financiers Fannie Mae (FNMA.OB)
and Freddie Mac (FMCC.OB)
may require as much as $190 billion in additional taxpayer aid if the economy suffers
a severe downturn, their regulator said on Wednesday. The Federal Housing Finance Agency, which oversees the two
taxpayer-owned companies, offered the estimate as the worst-case scenario in an
analysis modeled on the stress tests conducted on the nation's biggest banks.
The analysis relies heavily on U.S. home price projections. The stress tests,
required by the Dodd-Frank Act, are designed to show if regulated entities have
enough capital to weather a financial collapse similar to the 2007-2009 crisis.
A worst-case scenario would require total aid ranging from $84.4 billion to
$190.0 billion, depending on certain accounting assumptions, for the two
companies through 2015. So far,Fannie Mae and Freddie Mac have
drawn $187.5 billion in bailout funds, while returning $202.9 billion in dividends to
the U.S. Treasury after posting record profits.
Boiled
Frog Syndrome Invades CMBS as Risks Mount: Credit Markets - (www.bloomberg.com)
Traders Join Exodus as Forex Probes Add Pressure on Costs - (www.bloomberg.com)
Traders Join Exodus as Forex Probes Add Pressure on Costs - (www.bloomberg.com)
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