KeNo's Housing and Economic Portal: Thursday October 29 Housing and Economic stories

TOP STORIES:

Puerto Rico, Treasury in Talks to Restructure Island’s Debt - (online.wsj.com) Under plan, commonwealth would issue ‘superbond’ administered by Treasury or third party that would help restructure $72 billion of debt. Puerto Rico and U.S. officials are discussing the issuance of a “superbond” possibly administered by the U.S. Treasury Department that would help restructure the commonwealth’s $72 billion of debt, people familiar with the plan said. Under the plan, the Treasury or a designated third party would administer an account holding at least some of the island’s tax collections. Funds in the account would be used to pay holders of the superbond, which would be issued to existing Puerto Rico bondholders in exchange for outstanding debt at a negotiated ratio. Investors would receive less debt, likely taking an effective “haircut” on the value of their holdings, but would have higher expectations for getting repaid.

Latest Symptom of Brazil's Misery: Once-Great IPO Market Is Dead - (www.bloomberg.com) Brazil’s IPO market is dead. Once the hottest emerging market for initial public offerings after China, Latin America’s biggest economy isn’t even in the top 15 anymore. The nation’s lone IPO this year -- FPC Par Corretora de Seguros SA -- brought in just $229 million. That’s less than the amount raised in markets like Poland or Trinidad & Tobago and it’s not even 1 percent of the total from 2007, the very peak of Brazil’s go-go days. Three other would-be issuers -- all of them state-backed -- have scrapped their plans to go public in 2015. It’s a dramatic turnaround for a country that was once the place to be for foreign investors seeking to take advantage of massive oil discoveries, surging agricultural exports and an up-and-coming consumer base that’s the second largest in the Americas. These days, Brazilian companies are more likely to de-list than go public as a sweeping corruption scandal, a crippling recession and political turmoil wipe out $290 billion in market value this year alone.

Companies Eyeing Public Offerings Reckon With Inhospitable Market - (www.nytimes.com) One highly anticipated initial public offering came up short of expectations on Wednesday while another was delayed, illustrating how challenging the market has become for stock debutants. Other planned offerings have been delayed or canceled outright in recent weeks. While the I.P.O. plans of the fast-growing mobile payments company Square and the sports car maker Ferrari have generated interest in the market, the troubled offerings raise questions about the reception they and others prepared to go public will receive. Given its large size, First Data, another payments company, has been seen as a bellwether for the current I.P.O. market. The company, owned by theprivate equity firm Kohlberg Kravis Roberts, had been seeking to raise as much as $3.2 billion. But Wednesday evening, First Data priced its offering at $16 a share — well below its expected price range of $18 to $20. Also on Wednesday, the supermarket chain Albertsons decided to delay pricing its stock sale, people briefed on the matter said.

World's Biggest Leveraged ETF Halts Orders on Liquidity Concern - (www.bloomberg.com) The world’s largest leveraged exchange-traded fund is getting too big for the market it was designed to track. Nomura Asset Management Co. will halt subscription orders for its Next Funds Nikkei 225 Leveraged Index ETF and two other funds from Friday, it said in a statement on its website. The money manager, which relies on the futures market to deliver two times the daily return of Japan’s most famous stock index, said liquidity isn’t deep enough to ensure it can meet that target. Surging inflows from individual investors have made the Nikkei 225 ETF one of the biggest players in Japan’s futures market, sparking concern among some analysts that the fund’s trades are exacerbating price swings. Assets under management have doubled in just five months to 734 billion yen ($6.16 billion), even as the benchmark index fell 13 percent from this year’s peak in June.

Scientists already had major doubts about Theranos — and now the $10 billion company is in a full-on crisis - (www.businessinsider.com) The controversial startup Theranos captured the business and media worlds' attention with its description of a revolutionary new blood test, one that required just a fingerprick instead of a needle in the arm, and one in which results would be available within hours. But while the company opened its first lab testing centers, pulled together a board full of prominent former government officials, and received a valuation that now equals $10 billion, scientists continued to ask questions about how and whether its "revolutionary" technology worked. An investigative report in The Wall Street Journal published Thursday raises more doubts, with former employees reportedly telling The Journal that Theranos at the end of last year was using its new technology, referred to as "Edison," for only a small fraction of blood tests. One anonymous former employee told The Journal that at the end of 2014, the company ran 15 tests using new technology compared with 190 tests run in a traditional way with a normal needle.

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