Borrower Rentenbank Germany’s Agency forAgribusinessIssue Amount 200 million euroMaturity Date June 22, 2018Coupon 3-month Euribor + 17.5bpIssue price 100.367Payment Date October 25, 2011Lead Manager(s) BayernLB & DZ BankRatings Aaa (Moody’s), AAA (S&P),AAA (Fitch)Full fees UndisclosedNotes The issue size will total 500 millionEuro when fungibleISIN XS0641055230Security details and RIC, when available, will beonCustomers can right-click on the code forperformance analysis of this new issueFor ratings information, double click onFor all bonds data, double click onFor Top international bonds newsFor news about this issuer, double click on the issuer RIC,where assigned, and hit the newskey (F9 on Reuters terminals)Data supplied by International Insider.
* Mezz investors ramp up presence in EuropeBy Claire RuckinLONDON, Oct 17 (Reuters) - Banks arranging the 13.2 billion
Swedish crown ($2.0 billion)financing backing BC Partners’
buyout of Swedish cable company Com Hem are in talks to sell
around $200 million of a bridge loan to an unsecured high-yield
bond to investors, bankers close to the deal said on Monday.Arranging banks Goldman Sachs, Nordea, UBS, Deutsche Bank,
Bank of America Merrill Lynch and Morgan Stanley underwrote the
financing in July but have been unable to issue the bond after
August’s market disruption.The banks are close to selling just under half of the 2.65
billion crown bridge loan to a planned eight-year unsecured
bond, the bankers said.The overall deal financing package also includes a 3.5
billion crown senior secured bridge to high yield bond, which
has not been changed, along with a 7.1 billion leveraged loan in
general syndication.Potential buyers of the unsecured high-yield bridge loan are
subordinated funds which specialize in junior debt, including
mezzanine loans and high-yield bonds, bankers said.The sale will ease pressure on the arranging banks’ balance
sheets. The banks have been finding it difficult to keep bridge
loan risk on their books in volatile markets, which makes it
more challenging and expensive to issue high-yield bonds.The news will be welcomed by subordinated lenders which have
been raising funds to invest in non-standard loans which offer
good yield and also the potential to convert into other types
of debt including mezzanine loans if the high-yield bond
refinancing route remains shut, as seen in the case of Swedish
alarm maker Securitas Direct.The bridge loan selldown follows several other changes made
by arranging banks to boost sales. Arrangers cut the size of the
subordinated bridge loan in September to 2.65 billion crowns
from 3.185 billion and agreed to increase the payment-in-kind
tranche to 1.37 billion.The inclusion of a PIK note reduced Com Hem’s total
cash-paying interest to 5.6 times EBITDA from 5.9 times, as the
notes only pay interest at maturity. Total leverage on the deal
is 6.2 times debt to EBITDA including the PIK note.BC Partners said on July 22 it will buy Com Hem from Carlyle
Group and Providence Equity Partners. The firm paid about 17.5
billion crowns ($2.6 billion) for Com Hem, banking sources said.
($1 = 6.639 Swedish crowns)
Consumer confidence is perking up and with summer around the corner, Americans might be feeling a little more liberal with their travel budget, according to some trendwatchers and people in the travel industry.
“Our train counts are three times what they were last year,” said Bruce Brossman, director of reservations and sales at the Grand Canyon Railway, which expected to sell out on Memorial Day weekend.
The Grand Canyon itself typically draws large crowds over long holiday weekends, but secondary attractions like the two-hour scenic train ride up from Williams, Arizona, suffered in the recession.
Brossman says much of the rise in bookings was due to resurgent consumer confidence.
“Last year was a really tough time and people were really hunkered down and not spending discretionary dollars, and I think that there’s pent-up demand for travel,” Brossman said.
“Last year, everybody hunkered down,” said Tim Kirwan, general manager of the InterContinental Boston hotel, operated by InterContinental Hotel Group .
“They wanted the least expensive room rate and they essentially wanted to go across the street and get a coffee at the donut shop and forgo breakfast,” Kirwan added.
But this weekend, the hotel served 452 breakfast and brunch meals on Saturday, Sunday and Monday, nearly 10 percent more than the previous year, with guests paying $24 for breakfast and $32 for brunch.
“We were jammed,” Kirwan said. “There didn’t seem to be any hesitation at all in terms of spending up.”
The increase in spending may have extended to the gasoline pump– the Illinois Tollway, reported a 5.2 percent uptick in transactions over the holiday weekend (Thursday, May 28 through Monday May 31).
Experts say the uptick in travel is likely to continue through the rest of the summer.
Did you travel over Memorial Day weekend? Are you planning to spend more on travel? Will you travel more or less than last year?
Thursday was the deadline for Lone Star lodge an appeal.Its decision not to file an appeal is viewed as a move that
removes the legal uncertainties around its agreed $4.1 billion
deal to sell KEB to Hana Financial Group.
Thursday was the deadline for Lone Star lodge an appeal.Its decision not to file an appeal is viewed as a move that
removes the legal uncertainties around its agreed $4.1 billion
deal to sell KEB to Hana Financial Group.
* Schools urge Hispanic families to keep children enrolledBy Kelli DuganMOBILE, Ala, Oct 12 (Reuters) - A climate of fear and panic
has taken hold in Alabama’s immigrant community since a federal
judge let stand much of the country’s toughest state crackdown
on illegal immigration, advocates say.Farm laborers have picked up their checks and headed out of
town. Parents have pulled their children out of school or put
in place emergency plans for their care should the parents be
detained or deported for lacking proof of citizenship.”People are just taking off without knowing where they are
going,” said Rosa Toussaint-Ortiz, co-chairwoman of the
Hispanic/Latino Advisory Committee in Huntsville. “They even
own houses and are abandoning them. They are leaving their
stuff behind.”Just how many immigrants are fleeing the state is unclear.
The departures began soon after the law passed this year, and
advocates, educators and employers say they have seen an uptick
since a Sept. 28 court order that put into effect many of the
challenged provisions.U.S. District Judge Sharon Lovelace Blackburn ruled that
Alabama could authorize police to detain people suspected of
being in the country illegally if they cannot produce proper
documentation when stopped for any reason.The judge also upheld provisions requiring public schools
to determine the legal residency of children upon enrollment
and barring illegal immigrants from getting a driver’s license
or business license.The Obama administration has asked the U.S. Court of
Appeals for the 11th Circuit, based in Atlanta, to block the
immigration law while it is being appealed.Alabama Attorney General Luther Strange argued against
halting the law in a court filing on Tuesday. He said illegal
immigrants take jobs away from legal residents, use the state’s
public resources without paying taxes and form a substantial
part of the state’s prison population.There are an estimated 11.2 million illegal immigrants in
the United States, including between 75,000 and 160,000 in
Alabama, according to the Pew Hispanic Center.”ALABAMA MAKES ME LIVE IN FEAR”Lawmakers who backed the anti-illegal immigration measure,
passed by large margins in both chambers of the Republican-led
legislature, say they aren’t surprised by the anecdotal
evidence of its effect.”The purpose of it was to cut back on the number of illegal
immigrants that we have in Alabama, and obviously the law is
doing that,” said Republican Representative Mike Ball.Ball said the outcry over the law’s impact is overblown,
particularly the argument by opponents that it will turn
teachers into immigration officials.He said the intent of the schools provision is to allow the
state to collect statistics on the number of undocumented
students, not to prevent them from enrolling or have
authorities go after individual students or their parents.”We just want to know how much it’s costing us, and how
many we have,” Ball told Reuters.School officials have appealed to Hispanic families to keep
their children enrolled, and the message seems to have had some
success.The day after the court ruling, 2,454 Hispanic students
were recorded absent, or about 7 percent of the 34,657 enrolled
statewide, said Malissa Valdes, spokeswoman for the Alabama
Department of Education.Since then, daily absences have dipped to an average of
about 1,812 Hispanic students, compared to the 1,046 absences
reported the day before the law took effect.Valdes said official withdrawal figures won’t be available
until next week.Jose, a 16-year-old undocumented student in Pelham, remains
in school but worries about what might happen to him.”Alabama makes me live in fear. If mom drives me to school,
a policeman could arrest me just because of the color of my
skin,” the Mexican-born Jose said on Wednesday. “I have to be
afraid of my teachers, the people I look up to.”FARM WORKERS VANISHAs the court battle continues, some Alabama employers have
reported a dwindling labor force.Many companies are losing legal workers because a family
member is in the country illegally, making it almost impossible
to gauge the law’s direct impact on subcontractors and the
construction industry, said Kerrick Whisenant, president of the
American Subcontractors Association and an Alabama resident.”The truth of what’s happening here is we’re losing some
really good people because grandma lives with them, and she
can’t leave the house. I don’t think anybody blames them for
not feeling welcome,” he said.Jerry Spencer, who founded Birmingham-based Grow Alabama,
which works to distribute locally grown food from a network of
more than 200 independent farmers, estimates tens of thousands
of Hispanic farm workers have fled.Spencer said the majority of those workers were
undocumented, but some legal workers also moved away to avoid
the “hassle” the law has created for them, leaving tomato and
sweet potato farmers short-handed in the midst of harvest.”What we’ve got left is about 10 percent of who was there,”
he said.To help farmers cope, Spencer has been rounding up
unemployed laborers willing to work the fields. He said those
efforts in Birmingham have attracted a lot of interest, but the
shift is creating problems in some spots.”There’s a fair amount of reticence on the part of farmers
to take the city folk and unemployed workers,” Spencer said.”They really hate letting go of their amigos because
they’re so problem-free. They don’t squabble with one another
on the job, and they have inherent respect and honor for the
oldest (worker) on the job.”
Critics of the bloc’s common agricultural policy (CAP) had urged the European Commission to take advantage of high global food prices and cut the huge subsidies it pays to farmers in a reform of the policy from 2014.But against a backdrop of increasing market volatility, resource scarcity and climate change, the Commission had already rejected calls for subsidy cuts, and said the reform should refocus spending on the threats facing EU farmers.”The next decades will be crucial for laying the foundations of a strong agricultural sector that can cope with climate change and international competition. Europe needs its farmers. Farmers need Europe’s support,” EU agriculture chief Dacian Ciolos said in a statement.The Commission’s desire to keep overall farm spending at more or less its current level until 2020 was confirmed in proposals for the EU’s next long-term budget for 2014-20, announced in June.That stance is supported by pro-farming countries such as France, whose President Nicolas Sarkozy has pledged to defend the CAP with an eye on rural support in next year’s presidential elections.But the plans will face opposition from other countries such as Britain and Sweden, who want to see a sharp cut in EU farm spending to fund new growth-enhancing measures such as research and innovation.Under the plans, the bloc will start the process of trying to even out the imbalances in EU aid paid to farmers in western Europe versus less well-off producers in the east.But Poland said the plans did not go far enough, and criticized the fact that it could take until 2028 until equality was achieved between farmers across the EU.”This is no reform proposal, but some cosmetic changes that would prolong the status quo as regards the distribution of the EU funds,” Poland’s farm minister Marek Sawicki told a news conference. “It’s a mockery that the Commission, recognizing the need to equalize direct subsidy levels, at the same time proposes to achieve that over 14 years.”The CAP reform plans must now be jointly approved by EU governments and lawmakers in the European Parliament — a process which is expected to take up to two years to complete.Ciolos, who is Romanian, said the final shape of the reform would depend on the outcome of linked talks on the overall EU budget, where some large states with high deficits are looking to cut overall spending to ease pressure on public finances.”We will need favorable political conditions to agree the overall EU budget, on which the CAP budget is dependent, and on which the final shape of the CAP reform is dependent,” he said.NEW ELEMENTSAt present, farmers in Italy and Greece receive about 400 euros per hectare on average, compared to less than a hundred euros per hectare in Latvia.Ciolos said he wanted farmers in all countries to receive at least 90 percent of the average level of direct payments — currently about 270 euros per hectare — but added that the goal would be only partially implemented by 2020.To help free up funds for the redistribution, Ciolos said large individual farms would see their subsidies capped at 300,000 euros a year from 2014.In future, 30 percent of direct subsidies will be conditional on meeting new environmental criteria, such as forcing arable farmers to grow at least three different crops, and leaving seven percent of farmland fallow.The plans drew accusations of “greenwash” by green campaigners, but EU farmers said the requirements would damage their competitiveness.”It does not make sense to require every single farm to stop producing on a certain percentage of their land (ecological set-aside) when world food demand is set to rise by 70 percent by 2050,” EU farm union Copa-Cogeca said in a statement.UK Environment Secretary Caroline Spelman said in a statement Britain was pleased the EC had listened to the message that the CAP has to do more to help the environment, and that its budget cannot keep rising during an economic crisis.”But while some of the Commission’s rhetoric is right, overall we’re disappointed and the proposals as they stand could actually take us backwards. So the UK will be working hard with the Commission and other Member States to achieve the best deal for farmers, taxpayers and the environment,” she said.The plans included a proposal to grant EU subsidies only to “active farmers,” and Ciolos said he doubted airports and golf courses needed the EU farm subsidies they currently receive.The 27-nation bloc should retain its existing market management tools after the reform — including public intervention and private storage aid — to cope with market volatility and future food crises, Ciolos said.In a last-minute change, the Commission agreed to propose ending the bloc’s system of national sugar production limits and minimum prices from 2015 — not in 2016 as had been suggested in earlier drafts of the reform plans.The move is designed to avoid a repeat of the current shortage of sugar on the EU market, and will also allow an increase in EU sugar exports, which are capped under world trade rules because of bloc’s quota system.”This is a direct response to a policy that was formulated without any scarcity of sugar in mind. Changes like this will be needed to make the bloc’s policy efficient in a world where sugar production is tight,” said Keith Flurry, senior soft commodities analyst at Rabobank.($1 = 0.733 Euros)
* Companies preparing reorganisations for worst-case
scenario* Move seen as hint China wants more companies to list at
home* Telecoms and internet firms affected, shares declineBy Rachel Armstrong and Stephen AldredSINGAPORE/HONG KONG Oct 12 (Reuters) - A looming Chinese
government crackdown on a corporate structure used by almost
half of all U.S.-listed Chinese stocks coupled with growing
investor uncertainty has prompted companies to mull major
restructuring plans.New rules expected to apply to variable interest entities, a
structure used by several of China’s internet giants, are not
only forcing executives to consider various options, the rules
are rattling investors as well.Shares in China based, U.S. listed internet companies Sina
Corp and Baidu Inc have slumped around 26
percent and 12 percent since Reuters reported on Sept. 18 that
the China Securities Regulatory Commission (CSRC) had suggested
the government take action against VIEs.Any new rules from the Chinese authorities are not expected
to shut-down existing VIEs, but lawyers say that the ongoing
uncertainty is pushing several companies to investigate
contingency plans.”We’re hoping we will never have to use them, but we are
working on plans for unwinding existing VIE arrangements and
making new investments using alternative structures to prepare
for the worst case scenario,” said Marcia Ellis, a partner at
Ropes & Gray law firm in Hong Kong.VIEs, (Variable Interest Entities) get around official
restrictions on direct foreign investment into sectors deemed
important to China’s interests. Forty-two percent of China
companies listed in the U.S. use the VIE structure, according to
researchers at Peking University.They are particularly popular in the internet sector, where
foreign investors are barred from commercial activities, as VIEs
give investors the earnings flow and control of a
domestically-owned company through a series of service contracts
rather than equity ownership.But now a crackdown on VIEs is looming, after a raft of
accounting scandals involving overseas listed Chinese companies
erupted on North American stock exchanges.Alibaba Group’s acrimonious and public dispute with Yahoo
also put the structure in the spotlight when the
group’s chief executive Jack Ma allegedly transferred its
lucrative online payment platform Alipay to a separate VIE
without the approval of the group’s major shareholders.Mainland Chinese media reports say the CSRC is suggesting
that companies already using the structures will be exempt from
most of the new rules, but international lawyers say that
doesn’t mean China’s authorities will give them an easy ride.”Historically, even when the Chinese government makes
regulatory changes that grandfather existing companies, they
still make it very difficult for them to prosper in the future
unless they conform to the new regulatory environment,” said
Lester Ross, a partner at WilmerHale law firm in Beijing.Reuters reached Baidu, Sina and Alibaba, three of the most
well known companies that use the VIE structure if they had
looked at restructuring. Baidu and Sina both declined comment,
while Alibaba referred to a recent speech made by their chief
executive Jack Ma during a speech at Stanford University in the
U.S. in September.”The VIE is a great innovation,” but “we’ve got to make the
VIE really transparent,” he said, adding that he didn’t expect
the government to shut the entities down.Last week, the Public Company Accounting Oversight Board, a
U.S. accounting watchdog, warned auditors that companies may
assume they can consolidate the financial results of a VIE into
their own balance sheet “even though there might be significant
uncertainties regarding the economic substance of those
arrangements.”Online video company Tudou Holdings Limited showed
how VIE contracts can leave investors vulnerable when it was
looking to list on the Nasdaq late last year.The offering was delayed eight months after Tudou’s founder
Gary Wang, who had a 95 percent interest in Tudou’s VIE, was hit
with a lawsuit filed by his ex-wife. His former wife was
demanding a portion of his VIE holding and if she had been
successful, she could have, in theory, kept a significant part
of its earnings that would otherwise have gone to Tudou’s
shareholders.Wang eventually settled with his ex-wife, but the case
delayed Tudou’s IPO from December 2010 to August 2011.RESTRUCTURING OPTIONSThere is no one-size-fits-all alternative to a variable
interest entity structure, which is why the structure has been
so popular. Any restructuring would involve changing the nature
of the relationship between the foreign investors and the
Chinese owners of the onshore licensed operations.Some companies operating in sectors with no, or relatively
few restrictions on foreign ownership, could dismantle the VIE
and instead form an onshore joint venture.Other companies in sectors that have tougher laws on foreign
ownership would face a more complicated task, but lawyers are
advising that investors need to review their VIE contracts and
see if they can enact stronger corporate governance controls.”While there isn’t necessarily a ‘silver bullet’ solution
for every investment, hence the long-standing popularity of
VIEs, developing contingency plans for the next-best
alternatives is clearly preferable to getting caught completely
off-guard if the regulatory winds shift direction,” said Ropes &
Gray’s Ellis.In the long term it is expected that any changes to VIEs,
which would be likely to come from the Ministry of Commerce and
Ministry of Industry and Information Technology as well as the
CSRC, would be accompanied by an effort from the authorities to
coax overseas-listed Chinese companies back to the domestic
market.”I think what the CSRC wants to do is encourage these
valuable companies to list within China so that they have a
better control over them,” said Virginia Tam, a partner at White
& Case in Hong Kong.New rules will take time though, meaning investor
uncertainty is likely to linger.”The Chinese government isn’t in the business of issuing
press releases that would be helpful to private businesses,”
said Howard Wu, a Shanghai-based partner at Baker & McKenzie.”I think it’s unlikely you’re going to get some official
government pronouncement anytime soon. It is a very complicated
issue.”
– Connie Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. The views expressed are her own. –
There it was on Craigslist – an ad for “young, successful professionals living in America’s most emerging area, Silicon Valley,” ostensibly posted by a “major cable network” that’s looking to cast a Silicon Valley reality show.
No wonder. While many Americans are suffering through an abysmal economy, Internet startups seem impervious to bad news of any kind. Valuations have been rising for several years straight; companies like Zynga, Facebook, and Twitter are minting millionaires left and right; and many young outfits can’t hire skilled, highly paid software engineers or salespeople fast enough.
To get the picture, one only need look to the invitation-only, tequila-fueled industry party that entrepreneur-investor Sean Parker hosted two weeks ago. Split-roasted pigs, Dungeness crabs, and sashimi bars were a mere warm-up to nationally known musical acts like The Killers.
Silicon Valley has much to celebrate. It has the most highly educated workforce in the nation and boasts the highest economic productivity – almost twice the U.S. average, according to the Bay Area Council Economic Institute (BACEI). It also deserves kudos for creating the social media tools that have been empowering revolutions around the world.
But Silicon Valley sometimes seems as tone-deaf as Wall Street to the economic straits that most Americans face, and it’s in for a “shock,” says renowned Silicon Valley futurist Paul Saffo. He likens the Valley’s view of economic protests like Occupy Wall Street as “storms in other men’s worlds.”
“Because (Silicon Valley) has such a monomaniacal obsession to innovate, people tend to overlook things,” observes Saffo. It’s even easier to lose perspective, given that many in Silicon Valley are a part of the top 1 percent that accounts for 24 percent of the nation’s income and 40 percent of its wealth.
Still, Saffo thinks the region will not be able to ignore the economic unrest for long. “There is plenty of unemployment and underemployment in Silicon Valley, and it sorts by age,” he notes. “This is where new college grads with technical degrees are very much in demand. But people in their 40s and 50s are finding themselves in a difficult position. We have a real class system in Silicon Valley, with lots of people who are contract employees at places like Google and who are treated like hired hands and don’t get a piece of the action. So there’s plenty of anxiety (about the economy) to go around.”
Saffo doesn’t know where all of this economic dissatisfaction will lead, but he is worried. “I think there’s a sea change afoot that’s going to sweep over everything the same way,” he says. “I still think there’s a lot of uncertainty, but all my instincts as a forecaster tell me this has the feel of something very big happening. I’m standing on the beach and noticing the water heading back out toward the horizon.”
Jon Haveman, vice president and chief economist at BACEI, also sees telltale signs that the water may be receding. For the month of August, his institution observed declining employment data in Silicon Valley for the first time in roughly a year. “One month does not a trend make,” he says, “but it’s a number that bears watching. That there has been significant growth in the region (up to that point) is of note.”
In Haveman’s view, it makes perfect sense that Silicon Valley’s fortunes could also flag. “We provide services and equipment to the rest of the country, and the purchase of both will wane as the U.S economy nears a double-dip recession,” he reasons.
Neither Saffo nor Haveman think that Silicon Valley techies are going to be marching on with pitchforks any time soon. But both think they’ll eventually be engulfed in what is happening elsewhere in the country, whether or not they’re prepared for it. Saffo is even willing to guess when.
“Between increasing wealth concentration, a Supreme Court docket stuffed with controversial cases, and two national political conventions next summer — plus the heat,” says Saffo, “let’s just say that if I had to pick a time to go on vacation, it would be next summer.”
