Weekly Financial Biz Recap: TCP Capital IPO, ValueMax Values Wells Fargo
The European debt crisis is taking its toll on real estate: fewer financing opportunities are currently available in that region, and in the U.K. as well. To help remedy the situation Goldman Sachs’ (NYSE:GS) private equity unit plans to initiate a $3 billion property debt fund. The fund would provide senior and mezzanine loans to property investors, aimed at procuring higher-risk, higher-reward loans.
Investing Insights: Goldman Sachs Tentacles Find Another Void.
Hartford Financial (NYSE:HIG) shares were up as the U.S. insurer pays back the loans it received during the crisis in 2008. To that effect Hartford is paying $2.43 billion to buy back debt and warrants issued to Allianz (AZSEY.PK), Germany’s largest insurer. At that time in 2008 Hartford borrowed $1.75 at 10 percent from Allianz.
The $25 billion mortgage malpractice deal left many financial firms out, and now regulators are turning their aim towards some of them. Eight firms, including HSBC’s (NYSE:HBC) U.S. bank division, MetLife (NYSE:MET) and Goldman Sachs (NYSE:GS), are in the cross-hairs and a senior Fed official recommended fines for them last week. It is alleged that the objectionable foreclosure practices remain within the industry.
Following the full investment of its second infrastructure fund of $1.6 billion, Australia’s Macquarie (MQBKY.PK) expects to raise a $2 billion fund that will focus on the U.S. and Canada, according to Reuters. Previous stakes in North American infrastructure have averaged gross internal rates of return of over 20 percent for the company.
Wells Fargo (NYSE:WFC) has much going for it, says ValueMax, who calls the company ‘one of the best bets in the banking sector’. A commitment to treat its customers better than its rivals could set it apart from them, according to the analyst, and it’s projected to benefit from loan growth, income from trading, and pre-tax earnings, as domestic capital spending increases.
An accusation of improper use of inside information causes Ian Hannam, global chair of JPMorgan Chase’s (NYSE:JPM) equity capital markets, to exit the company. Hannum says he will appeal the decision, in which he was fined £450 thousand ($721 thousand) by financial regulators in the U.K. His offense was allegedly disclosing the information to a prospective client via two e-mails in 2008.
Declining trading volumes challenged CME Group (NASDAQ:CME) in March, as its daily average volume slid to 12.5 million contracts amid a 13 percent year-to-year decline in trading of interest-rate futures. CME’s trading volume in the first quarter decreased 11 percent year-to-year to an average of 12.3 million contracts a day.
Dick Bove is championing Morgan Stanley (NYSE:MS) shares, which he says are “so cheap right now, it’s overwhelming. It should be bought and bought very aggressively, right now.” The analyst expects a slump in May earnings, but he likes the rest of the sector, asserting that “everything that could go right for these companies is going right at the present time.”
Remarks by Sandler O’Neill’s Rich Repetto concerning a slide in online trading, are negatively impacting shares of online brokers E-Trade (NASDAQ:ETFC) and Charles Schwab (NYSE:SCHW) shares Tuesday. Commenting on data which show that retail trading at online firms fell 5 percent to 10 percent month-to-month in March, the analyst said, “We suspect March retail trading generally underperformed consolidated industry share volumes, which were down 5.1 percent sequentially”.
Investing Insights: The New Balance of Power Between Wall Street Banks.
In a move that could affect BlackRock (NYSE:BLK) and Berkshire Hathaway, the Financial Stability Oversight Council voted Tuesday reclassify certain non-bank financial firms as “systemically important” which would place them under stronger supervision. The next project taken on by the Council, is to determine which firms receive the dubious ‘honor’.
Rising fuel prices and low rates hit the already struggling shipping industry and negatively impact Commerzbank (CRZBY.PK), which holds the third largest shipping portfolio of any bank in the world. It’s estimated that between 75 percent to 100 percent of the bank’s equity is tied to that industry, and that it could sustain losses of up to €441 million ($588 million) from the current fuel and rate situation.
Don’t Miss: Lehman Collapse Keeps Haunting JPMorgan.
The Commodity Futures Trading Commission gets around to dealing with JPMorgan (NYSE:JPM), for its equity reporting misbehavior from at least 2006 to 2008. Charges were filed against the firm for its having included Lehman Brothers’ customer funds in its calculation of its net free equity during those years, plus handing it a $20 million fine. Whether JPM admitted to the charges or not, was undisclosed.
The 5.75 million share initial public offering of money manager TCP Capital (TCPC) opened Wednesday at $14.40, after being priced at $14.75. The firm’s central investments are debt held by middle-market companies, which provided income of $54.9 million in 2011, out of which $42.1 million was interest income, according to an N-2 filing.
Regions Financial (NYSE:R) pays off the U.S. government in full by its buyback of 3.5 billion worth of its preferred stock. In addition, the action removes $175 million in annual dividend payments from its books.
Citigroup (NYSE:C) unit Citibank gets its hand spanked by The Office of the Comptroller of the Currency, but there is no fine. The company is accused of being remiss on maintaining bank secrecy and statutes pertaining to money laundering. The laws are designed to induce satisfactory compliance programs in the banks, and for exposing suspicious activities.
Don’t Miss: AIG Still Has a Few Tricks Up Its Sleeve.
Assurant (NYSE:AIZ) and QBE Insurance are among several insurers in New York State which have received subpoenas requesting documents regarding homewowners policies. This is a part of an ongoing investigation conducted by the state’s top regulators, as to possible overcharges by insurers on such policies.
Two new announcements Thursday from PNC Financial Services (NYSE:PNC) include a rise in its quarterly dividend by 14 percent to $0.40 a share, and that the firm plans to repurchase $250 million worth of its stock under an existing share buyback program. In midday trading, shares offer a 2.50 percent yield.
Shareholders of Morningstar (NASDAQ:MORN) and the company are split as to the proposed separation of the roles of Chairman, and CEO into distinct positions. The ‘pro’ group wants the separation, as they believe it would enhance corporate governance, while the company has filed a proxy SEC request that asks shareholders to turn the idea down.