Financial Business Review: SunTrust SELLS KO Stake, UBS SUED By NCUA
SunTrust Banks Inc. (NYSE:STI) divests its investment in The Coca-Cola Company (NYSE:KO), which should bring a $1.9 billion pre-tax gain. The bank will post approximately $375 million in mortgage buyback provisions during the third quarter, raising its mortgage repurchase reserves to levels that should cover the remaining loan demands sold to GSE’s before 2009.
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Colony Financial, Inc. (NYSE:CLNY) has begun a public offering of 6 million shares of common stock, along with an option for the underwriter to buy as many as an additional 900,000 shares. The firm will use the proceeds to repay its outstanding revolving credit facility, pay for additional investments, and also use for working capital and general corporate purposes.
The National Credit Union Administration has brought a lawsuit against UBS AG (NYSE:UBS) for alleged misrepresentations while selling more than $1.1 billion worth of mortgage bonds to credit unions U.S. Central Federal and WesCorp. The unions later failed, and “were not aware of the untrue statements or omissions of material facts” when offering documents and they thought that their risk was minimal, when it was actually substantial.
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