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Shr loss 45 cts vs profit 20 cts Net loss 1841000 vs profit 983000 Revs 56.2 mln vs 102.9 mln Six mths Shr loss 13 cts vs profit 80 cts Net loss 534000 vs profit 4.4 mln Revs 121.4 mln vs 209.3 mln NOTE: Six months fiscal 1987 includes loss of 17 cts per share from discontinued operations. Per share figures also reflect partial three-for-one stock split effected December 1985. Reuter | HOLLY CORP <HOC> 2ND QTR JAN 31 LOSS |
Midland Bank Plc <MDBL.L> said its Greenwell Montagu Securities unit would pull out of equity market making and concentrate instead on providing a broker dealer and agency service for its clients. The operation has become the first major casualty in the London markets since deregulation last October abolished fixed commissions and allowed the merging of broking and jobbing operations into market making activities. A spokesman said Greenwell Montagu Gilt Edged which is a primary gilt edged market maker and Greenwell Montagu stockbrokers were not affected by the decision. The market making operation had encountered much greater competition than had been expected in the post-Big Bang period the spokesman added. Although Midland considered that the operation would be viable in the long term it would require the concentration of greater resources than could be justified for an operation that was not a core Midland activity. He confirmed Greenwell Montagu Securities had been losing money in past months. The pull out from market making would be conducted in an orderly fashion in the near future. There might also be some job losses he said without giving any details. Market sources said it was no great surprise that a market maker had pulled out as the intensity of competition had suggested for some time that sooner or later someone would decide to withdraw. They said some retreat by Greenwell had been likely because of its losses and added there also been speculation that it could pull out of market making in gilts also. The move was unlikely to have any major impact on market confidence as the occasional speculation in the past few weeks had had little impact. Analysts said commission rates on institutional equity trades have dropped sharply in the five months since deregulation with some firms covering some of their reduced profits by trading on their own account. In a recent report Greenwell Montagu Research said Those who have made profits are either immensely clever or immensely lucky. Some are already approaching the pain barrier others are prepared to tough it out. But until some players withdraw from the market it will be difficult to improve profitability. Dealers said the pace of withdrawals was likely to speed up in the next year and would intensify if the three-month bull run on the London stock exchange petered out. REUTER | MIDLAND UNIT PULLS OUT OF EQUITY MARKET MAKING |
White House spokesman Marlin Fitzwater said the administration had some disagreements with the trade bill that cleared a House subcommittee yesterday but generally felt good about the bill. Generally we feel very good about the bipartisan consideration of the trade legislation. I think we are progressing very well he told reporters. There are wide areas of agreement. There are some areas of disagreement he said. Reuter | WHITE HOUSE SAYS TRADE BILL GENERALLY GOOD |
SUNTER ACQUISITION BEGINS TENDER FOR ALLEGHENY INTERNATIONAL INC |
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Grain traders and analysts look for a 10 to 12 mln acre sign-up in the USDAs conservation reserve program scheduled to be announced after 1400 CST today. The USDA probably will accept about 80 to 90 pct of the acres submitted they said. Total enrollment in the first three years of the program is only 8.9 mln acres so the sharp increase expected this year has underpinned new crop corn futures all week. However some analysts said a 10 to 12 mln acre sign-up may end up being negative to new crop corn prices citing trade talk earlier this year that 14 to 15 mln acres may be submitted by farmers. Also acres set-aside under the conservation program are by definition poor yielding so the impact on total corn production will be minimal they added. Reuter | U.S. CONSERVATION SIGNUP SEEN 10 TO 12 MLN ACRES |
Mobil Corp made a 15 pct reduction in its long term debt in 1986 from the previous year according to data in its 1986 annual report. Mobil chairman Allen E. Murray said in his report to shareholders that lower debt and our strong cash and marketable securities position improves Mobils flexibility. Long term debt as of December 31 1986 was put at 7.9 billion dlrs down 15 pct from 9.3 billion dlrs on the same day in 1985. Mobil has moved to reduce debt at high interest rates which may reduce interest payments. Murray said that with the results from 1986 were paying back 3.8 billion dlrs in the past two years or the equivalent of 66 pct of the debt incurred in 1984 when we bought Superior Oil. Mobil said that it has about 183 mln dlrs of long term debt which is due in 1987 although this will rise appreciably to 1.2 billion dlrs of long term debt due in 1988. At the end of 1986 Mobil said it also had an existing effective shelf registration with the Securities and Exchange Commmission to permit the sale of 205 mln dlrs of debt. Mobils debt reduction program has also been abetted by several steps taken by the company to restructure its operations. Mobils Murray said in his remarks to shareholders that the company was continuing to dispose of assets which did not fit the companys long range plans and had realized some 1.1 billion dlrs from the sale of its Container Corp subsidiary. Murray said that as a result of lower debt and more efficient operations the company is now is a position to seize opportunities that may become available and use this strength in whatever way best builds shareholder value. Reuter | MOBIL <MOB> LONG TERM DEBT DOWN IN 1986 |
<Phoenix Steel Corp> said it and the union representing workers at its seamless tubing mill in Phoenixville Penn. were unable to reach agreement to extend the union contract that expires March 31. Phoenix said the union rejected its offer to extend a labor agreement through May 30 and a medical insurance agreement for active employees through June 30. The company said no further bargaining sessions are planned between it and United Steelworkers Local 2322. Reuter | UNION, PHOENIX STEEL UNABLE TO REACH AGREEMENT |
Bryson Oil and Gas plc a Belfast Northern Ireland oil company which has said it is considering seeking control of Cenergy Corp said it raised its stake in the company to 1281887 shares or 13.2 pct of the total. In a filing with the Securities and Exchange Commission Bryson said it bought 440000 Cenergy common shares on March 10 at eight dlrs each. Previously it had held 841887 shares or 8.5 pct. Bryson has request detailed shareholder information from Cenergy in case it decided to communicate with shareholders. But it said Cenergy has made legal challenges to the request. Reuter | IRISH OIL CONCERN BOOSTS CENERGY <CRG> STAKE |
Qtly div 10 cts vs 10 cts prior Pay May 20 Record April 27 Reuter | UNUM CORP <UNM> SETS QUARTERLY |
Allegheny International Inc said Sunter Acquisititon Corp formed by First Boston Inc began a cash tender offer in accordance with their previously announced merger agreement for all the outsanding shares of Alleghenys common stock 2.19 dlr cumulative preference stock and 11.25 dlrs convertible preferred stock. The offer expires April 9 unless extended. Under terms of the agreement tendering shareholders will receive 24.60 dlrs per common share 20 dlrs per preference share and 87.50 dlrs per preferred share. Allegheny said the offer is conditioned upon the valid tender of stock representing a majority of the voting power and at least two-thirds of outstanding shares of preference stock and preferred stock. The merger agreement was announced earlier this week. Reuter | SUNTER BEGINS TENDER FOR ALLEGHENY <AG> |
Shr 35 cts vs 13 cts Net 531840 vs 188362 Revs not given Year Shr 83 cts vs 41 cts Net 1249000 vs 620000 Revs 10800000 vs 5600000 Reuter | <TRANSIT FINANCIAL HOLDINGS INC> 4TH QTR NET |
LyphoMed Inc is raising 70 mln dlrs through an offering of convertible subordinatred debentures due 2012 with a 5-1/2 pct coupon and par pricing said lead manager Alex Brown and Sons Inc. The debentures are convertible into the companys common stock at 36.25 dlrs per share representing a premium of 27.75 pct over the stock price when terms on the debt were set. Non-callable for two years the issue is rated BB by Standard and Poors Corp. Montgomery Securities co-managed the deal. Reuter | LYPHOMED <LMED> SELLS CONVERTIBLE DEBENTURES |
IADB CHIEF SAYS WITHOUT SUSTAINED LATIN GROWTH THERE WILL EVENTUALLY BE A DEFAULT |
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Oper shr loss six cts vs profit four cts Oper net loss 58388 vs profit 34101 Revs 2419203 vs 2145967 1st half Oper shr profit six cts vs profit 18 cts Oper net profit 61763 vs profit 172166 Revs 5731582 vs 4458040 NOTE: Prior year net excludes extraordinary credits of 4500 dlrs in quarter and 46000 dlrs in half. Current quarter net includes 47470 dlr tax credit. Reuter | SPORTING LIFE INC <SPLF> 2ND QTR JAN 31 NET |
De Nationale Investeringsbank NV of the Netherlands has signed a 3.1 billion yen bullet loan agreement arranger Mitsubishi Bank (Europe) SA said. The five-year term loan carries an interest rate of Japanese long term prime rate flat. It features a swap agreement but a Mitsubishi Bank spokesman declined to give further details. The lenders are Mitsubishi Bank Ltd and one other Japanese financial institution which the spokesman declined to name. Mitsubishi said the loan was believed to be the first the borrower has raised in yen. Reuter | DUTCH INVESTMENT BANK RAISES 3.10 BILLION YEN LOAN |
Antonio Ortiz Mena president of the Inter-American Development Bank warned that if Latin countries were unable to speed up their economic growth then in the long run there would be a default. He told a press conference foreshadowing the banks annual meeting next week For the banks it is convenient to be repaid. But to achieve that the countries need to grow. If they dont then in the long run there will be a default. Ortiz Mena warned that Latin America needed to reverse the capital outflows from the region and beyond that needed more resources. Ortiz Mena declined to agree with estimates that capital outflows from Latin America last year totaled 35 billion dlrs and that therefore he was calling for an inflow into the region above that sum. He said the U.S. debt strategy which envisaged stepped up lending by commercial and multilateral banks to major debtor nations of 29 billion dlrs over three years was insufficient to achieve the necessary rates of growth. But he did stress the U.S. plan was important and the right approach. Ortiz Mena said It is in the interest of the creditors not only the debtors to push forward the development process in Latin America and that has happened. He added The only problem is the resources have not been enough. Turning to Brazil whose growth rate he predicted will decline slightly this year from 1986 Ortiz Mena said the countrys moratorium was the right action in order to avert a long term default. So its preferable they negotiate now a move which would eliminate any chance of panic in the markets. Ortiz Mena also said that Brazilian authorities have opened negotiations already with commercial banks. He pointed out Brazil took the action because of its deteriorating economic situation. Reuter | IADB CHIEF WARNS OF EVENTUAL LATIN DEFAULT |
The Food and Drug Administration said Monsanto Cos <MCT> G.D. Searle and Co unit is voluntarily recalling all lots of its Gynex oral contraceptives. The FDA said some of the blister-pack cards that house the birth contol pills may contain out of sequence tablets in the 28-day-cycle package. It said other 21-day-cycle packages may be missing some tablets. If oral contraceptives are taken in the wrong order or skipped the likelihood of pregancy increases. The FDA said said the recall affects 315000 packages of the pills which were distributed nationwide since the drug was first distributed in February. The FDA said Searle believes only a small number of pacakges about 2000 to 3000 were dispensed to consumers. The FDA also said the labeling on the product indicates that Gynex oral contraceptives are manufactured and packaged by Corona Pharmaceutical of Corona Calif. for G.D. Searle and Co. Reuter | FDA RECALL MONSANTO<MCT> UNIT ORAL CONTRACEPTIVE |
A group of affiliated New York investment firms said they lowered their stake in Cyclops Corp to 200500 shares or 5.0 pct of the total outstanding from 260500 shares or 6.4 pct. In a filing with the Securities and Exchange Commission the group led by Mutual Shares Corp said it sold 60000 Cyclops common shares since February 26. Reuter | INVESTMENT FIRMS CUT CYCLOPS <CYL> STAKE |
The Amsterdam Stock Exchange today declined to comment on a press report saying Drexel Burnham Lambert Incs request for membership had been delayed pending investigation by the U.S. Securities and Exchange Commission. The Exchange was replying to Reuters inquiries after the leading Dutch evening daily NRC Handelsblad published a report this evening quoting an unnamed bourse official as saying Drexels application was delayed while the firm was under investigation by the SEC. It usually takes the bourse one to two months to process a membership application the official said adding: Its been going on for three to four months with Drexel so draw your own conclusions. Were not particularly worried about the contents of the application but we think the timing is somewhat unfortunate the NRC quoted the official as saying. Drexel is currently under investigation by the SEC in connection with insider trading activities by Ivan Boesky and Dennis Levine last November a month after the company applied for permission to deal in Dutch equity. An exchange spokesman said there was nothing unusual about the processing period of Drexels application adding that he would not comment on any company before all documents had been studied by the bourse board. A spokesman from Drexels London branch which is dealing with the application said the delay was of a purely technical nature in Drexels head office in New York. Reuter | AMSTERDAM BOURSE SAID DELAYING DREXEL MEMBERSHIP |
Shr loss 1.41 dlrs vs profit 27 cts Net loss 8225052 vs profit 1566936 Revs 4028231 vs 6725462 Note: 1986 shr and net after 6606646 dlr writedown on property and other assets Reuter | <ARGYLL ENERGY CORP> YEAR LOSS |
NV Nederlandse Gasunie of the Netherlands has signed a 3.28 billion yen bullet loan agreement arranger Mitsubishi Bank (Europe) SA said. The interest rate on the 5-1/2 year loan is the Japanese long term prime rate flat. The loan has a swap agreement but a bank spokesman declined to give further details. The lenders are Mitsubishi Bank Ltd and another Japanese financial institution which the spokesman declined to name. REUTER | NEDERLANDSE GASUNIE IN 3.28 BILLION YEN LOAN DEAL |
<Transit Financial Holdings Inc> earlier reporting higher fourth quarter and full year earnings said it expects 1987 share profit to increase to 1.27 dlrs from 83 cts in 1986. The company said the 1987 share forecast is based on 2.5 mln shares outstanding after a one mln common share issue on December 30 1986. Its 1986 and 1985 earnings were based on 1.5 mln shares outstanding. The company earlier reported 1986 profit rose to 1249000 dlrs or 83 cts a shares from year-earlier 620000 dlrs or 41 cts a share. Reuter | TRANSIT FINANCIAL SEES 1987 SHARE PROFIT RISE |
A proposal by the Chicago Mercantile Exchanges (CME) board of directors to restrict dual trading by stock-index futures floor brokers would not provide a solution to alleged abuses in the market House Small Business Committee chief economist John Helmuth said. Helmuth worked on legislation offered earlier this week by Rep. Neil Smith (D-Iowa) to ban dual trading in the Standard and Poors 500 stock index futures trading pit. Last night the CME board recommended curbing but not banning dual trading in S and P 500 futures and options. The CME board rejected a petition presented in February by some members seeking an outright ban on dual trading whereby floor brokers trade for their own accounts as well as for customers. Helmuth said the boards proposal would not prevent traders from falsifying the record that shows the times of their trades. Helmuth predicted Smiths bill would be closely examined by the House Energy and Commerce Committee chaired by Rep. John Dingell (R-Michigan). Dingell and his staff were unavailable for comment. Reuter | CME BOARD PLAN SAID NOT ANSWER TO DUAL TRADING |
AMERICAN MOTORS CORP EARLY MARCH U.S. CAR SALES OFF 57 PCT |
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SAN PAOLO DI TORINO CUTS PRIME RATE TO 12.50 PCT FROM 13.00 PCT - OFFICIAL |
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Pegasus Gold Inc said it cut its long term debt to 85 mln dlrs from 100 mln dlrs when its European bondholders voluntarily converted some of their debt holdings into 1.5 mln shares of Pegasus common. The company said the debt converted represents about 40 pct of the total 60 mln Swiss franc convertible debentures it completed last Fall. In addition Pegasus said it began mining and processing operations at its Zortman/Landusky Mine one month ahead of schedule. Pegasus said it completed the first phase of its 1987 Super Pad ahead of schedule as well allowing the mining company to load up to 7.5 mln tons of new ore on the pad. Pegasus estimated that 1987 production at the Zortman/Landusky mine will be about 80000 ounces of gold and 225000 ounces of silver. Reuter | PEGASUS GOLD <PGULF> REDUCES DEBT |
A decision by the U.S. Securities and Exchange Commission to remove a key regulatory obstacle to trading foreign debt futures on U.S. Exchanges was a constructive development London International Financial Futures Exchange (LIFFE) Chief Executive Michael Jenkins said. The SEC yesterday agreed to remove the regulation against trading futures in designated foreign government debt securities on markets not located in the issuing country. Jenkins said the decision cleared the way for the Chicago Board of Trade possibly to trade U.K. Long gilt futures and a Japanese yen bond contract. The CBOT is now likely to proceed with an application to trade gilts to the Commodity Futures Trading Commmission (CFTC) he said. Reuter | LIFFE EXECUTIVE GREETS SEC MOVE ON FUTURES TRADE |
PRESIDENT REAGAN VOWS NO TAX RATE INCREASE AS LONG AS HE IS PRESIDENT |
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CANADIAN MONEY SUPPLY M-1 RISES 592 MLN DLRS IN WEEK, BANK OF CANADA SAID |
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Shr loss 45 cts vs profit 20 cts Net loss 1841000 vs profit 983000 Revs 56.2 mln vs 102.9 mln Avg shrs 4127000 vs 4835000 1st half Oper shr four cts vs 80 cts Oper net 172000 vs 4359000 Revs 121.4 mln vs 209.3 mln Avg shrs 4127000 vs 5439000 NOTE: Current half net excludes 706000 dlr loss from discontinued oil and natural gas operations. Share adjusted for three-for-one stock split and recapitalization in December 1985. Prior year net both periods includes pretax charge of 2300000 dlrs from recapitalization costs. Reuter | HOLLY CORP <HOC> 2ND QTR JAN 31 LOSS |
Chrysler Canada Ltd wholly owned by Chrsyler Corp said it added some car and truck models to the companys cash rebate program and discontinued the models from its 3.9 pct financing plan. Chrysler Canada said effective March 16 it will offer a 750 dlr cash rebate on 1986 and 1987 Dodge Aries and Plymouth Reliant sales. It will also offer a 500 dlr rebate to buyers of 1986 and 1987 Tursimo and Charger cars as well as Ram 50 and Power Ram 50 trucks. The financing plan on the models will be discontinued March 15. Reuter | CHRYSLER <C> CANADA SETS MORE CASH REBATES |
High Point Financial Corp is raising six mln dlrs through an offering of redeemable subordinated debentures due 1997 yielding 8.65 pct said sole underwriter Ryan Beck and Co. The debentures have an 8-1/2 pct coupon and were priced at 99 to yield 147 basis points more than comparable Treasuries. High Point also sold 6.66 mln dlrs of cancellable mandatory stock purchase contracts that require the purchase on March 1 1997 of the companys common stock at 23 dlrs per share. High Point is trading at 22 dlrs a share in the over-the-counter market according to Ryan Beck. Reuter | HIGH POINT SELLS DEBT AND STOCK CONTRACTS |
Cyclops Corp said its board rejected a request by Cyacq Corp an investor group for more non-public information about Cyclops a maker of specialty steels and an electronics retailer. Cyclops cited its agreement to be acquired by Britains Dixons Group PLC for 90.25 dlrs a share under a tender offer that expires midnight March 17. Cyacq comprising Audio/Video Affiliates Inc Citicorp Capital Investors Ltd and other investors yesterday said it would increase its tender offer for Cyclops to 92.50 dlrs a share from 80 dlrs subject to certain conditions. The conditions were that Cyclops provide Cyacq with non-public data given to Dixons and that Cyacq be satisfied with financial projections made by Dixons in its offer. Cyclops also said its board determined that Cyacqs announcement was not an offer. Cyacqs press release does not amend Cyacqs outstanding tender offer which remains at 80 dlrs per share and it does not state that Cyacq has financing commitments necessary to carry out its original offer or any increased offer that it may make Cyclops said in a statement. Its agreements with Dixons are binding and Dixons indicated it will not rescind or waive any provisions of the pacts Cyclops said. The company also said it was advised that Dixons shareholders approved the merger satisfying that condition of the agreement. Reuter | CYCLOPS <CYL> WILL NOT GIVE DATA TO GROUP |
Shr 22 cts vs 22 cts Net 915911 vs 970141 Revs 8.0 mln vs 8.0 mln Nine months Shr 69 cts vs 56 cts Net 3.0 mln vs 2.4 mln Revs 23.5 mln vs 22.1 mln NOTE:1987 3rd qtr and nine months include extraordainry gain of 341145 dlrs and 480412 dlrs respectively on sale of land. Reuter | SAN JUAN RACING ASSOCIATION INC <SJR> 3RD QTR |
Status Game Corp said it has started making condom vending machines which it will start distributing within the next 30 days. It said initially it will place the machines in the 1200 Nevada locations in which it has other vending machines. But it said it has already received a substantial number of inquiries from potential customers in Europe Canada and the U.S. including two large English breweries which each operates over 5000 pubs. Reuter | STATUS GAME <STGM> TO PRODUCE CONDOM MACHINES |
Occidental Petroleum Corps Natural Gas Pipeline Co of America unit said it has introduced a Fast Break plan for expedited processing of requests for interruptible natural gas transportation service. It said under Fast Break customers submitting streamlined service requests will receive interim transportation agreements and in most cases have gas flowing within seven working days. Reuter | OCCIDENTAL <OXY> UNIT IN MARKETING PLAN |
A group led by New York investor Asher Edelman said he lowered its stake in Lucky Stores Inc <LKS> to 1827734 shares or 4.8 pct of the total outstanding common stock from 1930734 shares or 5.1 pct. In a filing with the Securities and Exchange Commission the Edelman group said it sold 103000 Lucky Stores common shares on March 9 and 10 at prices ranging from 28.625 to 30.375 dlrs a share. So long as Edelmans stake is below five pct he is not required to report his dealings in Lucky Stores stock. Reuter | EDELMAN CUTS LUCKY STORES <LKS> STAKE TO 4.8 PCT |
Canadian narrowly-defined money supply M-1 rose 592 mln dlrs to 33.36 billion dlrs in week ended March 4 Bank of Canada said. M-1-A which is M-1 plus daily interest chequable and non-personal deposits rose 778 mln dlrs to 75.95 billion dlrs and M-2 which is M-1-A plus other notice and personal fixed-term deposit rose 1.09 billion dlrs to 177.95 billion dlrs. M-3 which is non-personal fixed term deposits and foreign currency deposits of residents booked at chartered banks in Canada rose 1.13 billion dlrs to 217.28 billion dlrs. Chartered bank general loans outstanding rose 500 mln dlrs to 125.54 billion dlrs. Canadian liquid plus short term assets fell 244 mln dlrs to 35.12 billion dlrs and total Canadian dollar major assets of the chartered banks rose 257 mln dlrs to 221.53 billion dlrs. Chartered bank net foreign currency assets rose 782 mln dlrs to minus 876 mln dlrs. Notes in circulation totalled 16.28 billion dlrs up 45 mln dlrs from the week before. Government cash balances rose 1.37 billion dlrs to 5.68 billion dlrs in week ended March 11. Government securities outstanding fell three mln dlrs to 224.08 billion dlrs in week ended March 11 treasury bills rose 600 mln dlrs to 75.15 billion dlrs and Canada Savings Bonds fell 294 mln dlrs to 44.05 billion dlrs. Reuter | CANADIAN MONEY SUPPLY RISES IN WEEK |
The Soviet Union has been a heavy buyer of Yugoslav corn since October purchasing close to 1.5 mln tonnes in the 1986/87 marketing year according to a report from the U.S. agriculture counselor in Belgrade. Approximately 1.5 mln tonnes of Yugoslav corn have already been committed to foreign buyers for 1986/87 with most of this sold to the Soviet Union the Yugoslav Grain Association reported to the U.S. official. In a report dated March 10 the official said that about 800000 tonnes of the corn has been delivered with the balance of 700000 tonnes to be shipped between now and June. An additional 500000 tonnes of corn can be shipped from July-September the grain associaiton said so total Yugoslav corn exports could reach 2.0 mln tonnes the counselor said. Heavier than normal monthly shipping rates for Yugoslav corn exports are due to the increased use of river barges for exporting corn to the Soviet Union the counselor said. Monthly corn shipments out of Yugoslavia have averaged around 160000 tonnes since October 1 higher than earlier estimates of 150000 the official said. The Soviet Union has taken an increased share of Yugoslav corn sales during this marketing year he said. Reuter | USSR HEAVY BUYERS OF YUGOSLAV CORN-U.S. REPORT |
President Reagan told a group of supporters his pledge to veto a tax hike is solid adding There will be no tax rate increase in the 100th Congress. While he did not mention House Speaker Jim Wright by name Reagan said that some members of Congress were urging that taxes be raised. Im sorry but thats just not going to happen said Reagan. Were not going to break faith with the American people. I promise you tax reform will go ahead as scheduled the president added. All these tax hike schemes have as much chance of flying as a dead duck he said. Reagan combined his strongly-stated opposition to a tax hike with a warning to Congress to meet the deficit reduction targets set by the Gramm-Rudman-Hollings budget control law. Failure to do so he said would jeopardize a continuation of the current favorable economic climate. Reuter | REAGAN VOWS TO BLOCK TAX HIKE IN HIS PRESIDENCY |
The U.S. Has dropped its insistence that the floor price in a new International Natural Rubber Agreement INRA be revised downward under certain circumstances conference sources said. The surprise conciliatory move by the U.S. Meets one of the producers main concerns -- that the floor price or lower indicative price remain unchanged they said. It is not clear however whether all consuming countries will follow suit as a number of them in particular Britain West Germany and Belgium appeared to have strong reservations the sources added. The group of consumers has been seeking an adjustment of the lower indicative price (set at 150 Malaysian/Singapore cents a kilo in the present pact) if the buffer stock currently 360000 tonnes rises to 450000 tonnes. The sources said the question of to what extent price adjustments should be automatic remains a problem. Conference chairman Manaspas Xuto of Thailand has been holding consultations with producers and consumers throughout the day. The consumers group is now holding a separate meeting ahead of further consultations within the presidents group tonight. Reuter | U.S. MAKES CONCILIATORY MOVE AT RUBBER PACT TALKS |
Pegasus Gold Inc said it cut its long term debt to 85 mln dlrs from 100 mln dlrs when its European bondholders voluntarily converted some of their debt holdings into 1.5 mln shares of Pegasus common. The company said the debt converted represents about 40 pct of the total 60 mln Swiss franc convertible debentures it completed last Fall. Pegasus said it began mining and processing operations at its Zortman/Landusky Mine one month ahead of schedule. It completed the first phase of its 1987 Super Pad ahead of schedule as well allowing the mining company to load up to 7.5 mln tons of new ore on the pad. Pegasus estimated 1987 production at the Zortman/Landusky mine will be about 80000 ounces of gold and 225000 ounces of silver. Reuter | PEGASUS GOLD REDUCES DEBT, STARTS MINE |
Caesars World Inc is likely to seek out a friendly suitor or restructure operations to fight off the unsolicited takeover offer by investor Martin Sosnoff securities analysts said. They could be talking to a white knight right now said Janney Scott Montgomery Inc analyst Marvin Roffman adding. That would be my best guess. Analysts also said other options for Caesars could include a restructuring or a buyback of Sosnoffs 13.6 pct holdings. Earlier today Caesars World announced that its board unanimously rejected a 28 dlr per share or 725.2 mln dlr takeover offer from MTS Acquisition Corp a company formed by Sosnoff. The company also said it will explore a variety of alternative transactions but did not elaborate. In announcing the rejection Caesars said the offer was inadequate given the companys financial condition future prospects and current market conditions. A Caesars spokesman said the company expects to file a 14D-9 with the Securities and Exchange Commission later today with more information on its analysis of the Sosnoff offer. Analysts are generally bullish on the outlook for Caesars World and some have placed the value of Caesars stock at from 32 to 35 dlrs per share. They have also asserted that Sosnoff is not likely to succeed with the unsolicited bid unless he raises his offering price to a higher level. Caesars Worlds stock is up 1-1/8 today at 29-1/8. Janney Montgomerys Roffman believes potential suitors for the hotel/casino company could be Golden Nugget Inc <GNG> or Tracinda Corp a company controlled by investor Kirk Kirkorian. Golden Nugget has a good deal of cash on hand as the result of the sale of its Atlantic City N.J. casino to Bally Manufacturing Corp <BLY> Roffman said. Earlier this month Golden Nugget completed its sale of the Atlantic City property for 440 mln dlrs. Roffman also believes Kerkorian is interested in getting involved in the gaming business. Mark Manson an analyst at Donaldson Lufkin Jenrette said options available to Ceasars also include a restructuring in the form of a selloff of individual properties a stock buyback or forming a master limited partnership. Very few of these options would weaken the value of the company Manson said but he declined to speculate on which approach Caesars might take. Reuter | CAESARS WORLD <CAW> RESTRUCTURING SEEN |
U.S. February reports reflecting slim gains in industrial output and moderating inflation pressures reinforced expectations that the Federal Reserve will continue to follow a stable course of monetary policy economists said. If youre the Fed theres no reason to do anything said Steve Slifer of Lehman Government Securities Inc. There are hints that GNP is picking up. On the inflation front all is well he said. Money supply is well under control. Its an absolutely ideal situation. February U.S. industrial production rose 0.5 pct slightly less than the 0.7 pct gain the financial markets had expected. This compared with a slim 0.1 pct rise in Januarys production number previously reported as a 0.4 pct increase. The February U.S. producer price index gained only 0.1 pct less than a 0.3-0.4 pct expected rise. This followed a 0.6 pct rise in the PPI in January. The Fed is going to look at this positively said Allan Leslie of Discount Corporation. Certainly inflation is not as bad as what Volcker (Fed Chairman) has said lately. Industrial production growth is along the lines of what the Fed wants. The energy products component of PPI rose 4.0 pct in February after a 9.8 pct increase in January. This shows that the impact of energy prices on inflation is behind us in terms of the move from 15 dlrs to 18 dlrs per barrel said Maria Ramirez of Drexel Burnham Lambert Inc. The trend is still 3.5 pct in the first half of the year. In 1986 declining energy prices contributed to a 2.5 pct decline in the PPI. Economists said that a rise in energy prices was expected but a sharp drop in auto prices was not. Passenger car prices fell 3.4 pct and light truck prices dropped 1.3 pct. Yesterday Federal Reserve Chairman Paul Volcker said that a possibility of renewed inflation remains a concern in both the financial markets and the Federal Reserve. The Fed may be lowering its own inflation expectations today said Robert Brusca of Nikko Securities International. While low inflation permits the Fed to maintain an easier monetary policy Brusca said if import prices do not rise this could necessitate a weaker dollar. The outlook for the dollar is still up in the air he said. We need inflation for U.S. producers to compete with foreign producers. Brusca said prices of electronic equipment dropped 0.8 pct in Februarys PPI. With many electronic goods produced overseas this may show that foreign producers are not raising prices which bodes ill for U.S. competitiveness he said. If further dollar declines are needed this could diminish overseas investment in U.S. debt Brusca added which might necessitate higher interest rates and lower bond prices. By contrast Slifer said imported goods prices rose 11.8 pct from first quarter 1985 to first quarter 1986 reflecting to a large degree a 22 pct drop in the trade-weighted real value of the dollar from February 1985 to February 1987. Slifer said import prices may rise further as manufacturers contracts put in place before the dollar dropped to current levels expire and new contracts are made that reflect a weaker dollar. David Wyss of Data Resources Inc noted that imported manufactured goods prices rose 8.5 pct at an annual rate in the second half of 1986 which has contributed to rising U.S. industrial output. Its the other side of the lower dollar Wyss said. Producers are beginning to find themselves more competitive and they are increasing output. Wyss said that the latest data point to an average industrial production gain of 0.3-0.4 pct in the first quarter. Its an encouraging sign that the manufacturing sector is beginning to revive. But Stephen Roach of Morgan Stanley and Co Inc was not convinced that the February reports portend economic gains. He said much of the strength came from factors that do not point to a sustained rise in industrial output. Roach pointed out that stikers returning to work in farm equipment industries helped account for a one pct rise in February business equipment production. Utilities output rose 0.7 pct in February after gaining 1.2 pct in January but Roach said it shows mostly that more energy was produced not that manufacturing activity gained. Finally he pointed out that auto production accounted for half of the industrial production gain as production of auto assemblies rose to 8.3 million units at an annual rate from 7.5 million units. In the first quarter it looks like automakers are producing at an 8.5 mln unit annual rate but selling at roughly a seven mln unit rate Roach said. The disparity between output and sales is showing up in inventories. Economists pointed to sharp rise in January U.S. business inventories as a sign that production may be outstripping demand in the first quarter of 1987. January business inventories rose 0.9 pct the largest gain since July 1979 when inventories rose 1.7 pct the Commerce Department said. Business sales dropped 4.5 pct in January the largest monthly sales drop on record. Nonetheless economists do not expect the Fed to react to month-to-month changes. The Fed has been standing pat for the last seven months Ramirez said. They will continue to stand pat for at least the next couple of months. Reuter | FED SEEN CONTENT WITH U.S. FEBRUARY ECONOMY |
Philadelphia Electric Co said on May One it will redeem its 17.125 pct preferred stock at 111.50 dlrs per share. Reuter | PHILADELPHIA ELECTRIC <PE> REDEEMING PREFERRED |
A secondary market for resale of farm real estate loans similar to markets on home mortgages is gaining support in Congress and among rural lenders and could be set up this year Congressional and financial sources said. Several bills which would establish a farm secondary market have been introduced in both the House and Senate. Furthermore Representatives of the Farm Credit System commercial bankers and life insurance companies are meeting in an attempt to agree on a method of establishing the market. Frank Naylor chairman of the Farm Credit Administration FCA which regulates the farm credit system yesterday said a farm loan secondary market would be positive for agriculture as long as the farm credit system is a key player. Naylor told a House Agriculture subcommittee hearing the secondary market could be established either with Congressional legislation or administratively. Any farm loan secondary market would be modeled after the successful resale markets in home mortgages the Government National Mortgage Association GNMA and the Federal Home Loan Mortgage Corporation (Freddie Mac) industry sources said. Commercial banks and life insurance companies are the main supporters of a farm loan secondary market since they believe it would allow private lenders to compete more effectively in rural lending with the quasi-government farm credit system traditionally the largest lender to farmers. A farm secondary market would allow lenders to sell high-quality loans on farmland to poolers who in turn would package the loans and issue farm mortgage-backed securities for resale to investors -- called Aggie-mae by some proponents. The FCA and financially-troubled farm credit system have in the past been ambivalent about the idea mainly because any farm secondary market established in the private sector which excluded the farm credit system would put the system at a competitive disadvantage and could be another financial blow to the system which has lost 4.6 billion dlrs in two years Naylor and farm credit system officials have said. However the system and FCA have become more positive to the idea recently because the system could benefit if it were appointed the agent for a secondary market. If the farm credit system were the guarantor of the pools of farm mortgage loans it would benefit from the fees charged for providing this service the Life Insurers study said. Congressional sources believe a secondary market available to both private lenders and the farm credit system with the system as agent could be included in a major federal government rescue package for the system to be drafted by Congress later this year. A study commissioned by one of the main supporters of the secondary market idea the American Council of Life Insurers concludes that the farm credit systems market share in rural lending would fall if a secondary market were established. The study was released earlier today. The study said a secondary market could be established with virtually no federal money if the government provided a guarantee of 90 pct of the farm loans but a private co-insurance plan guaranteed the first 10 pct of any losses. It estimated between 500 mln and two billion dlrs of the eight billion in new farm real estate loans issued each year would qualify for the secondary market in the first few years expanding significantly later as investors accept the idea. The study also said interest rates charged to farmers who meet the underwriting standards of a secondary market would fall 50 to 100 basis points due to the new resale market. The possible interest rate declines are a major reason why leading U.S. farm organizations such as the American Farm Bureau Federation have recently endorsed the idea. Proponents say a secondary market also would increase liquidity in farm lending and spread the risk of such loans. Reuter | U.S. FARM LOAN SECONDARY MARKET GAINS SUPPORT |
ecuador cannot service its debt owed to private foreign banks due to the earthquake that forced a suspension of crude oil exports central bank officials said. we hope to obtain a tacit explicit acceptance from foreign banks ... that we are not able to service the debt central bank president carlos julio emanuel said. the reality is that our debt service capacity has been totally affected by the recent cataclysm he added in a news conference last night. A central bank spokesman said emanuel was referring to payments owed private foreign banks already suspended since january. These banks hold two-thirds of the countrys 8.16 billion dollar foreign debt. Emanuel was not refering to debts to foreign governments and multilateral organisations the spokesman said. The march 5 earthquake damaged an oil pipeline preventing crude exports for a projected five months. Oil generates about two-thirds of ecuadors total exports and as much as 60 per cent of the governments revenues. Emanuel did not specify how long ecuador would be unable service private foreign banks. But finance minister domingo cordovez said two days ago the government is seeking to postpone all payments due to private foreign banks in 1987 until next year through negotiations with creditors. Emanuel said ecuador was seeking soft loans from multilateral organisations for reconstruction work. It also wanted a reprogramming of already-approved loans an apparent reference to the disbursement schedule of thee credits. Reuter | ECUADOR UNABLE TO SERVICE DEBT - CENTRAL BANK |
Darius N. Keaton former member of the board of <Santa Fe International Corp> pleaded guilty to an insider trading scheme that netted him 274800 dlrs in profit. In Manhattan Federal Court Keaton pleaded guilty to trading on non-public information involving his purchase of 10000 shares of the companys stock in September 1981 shortly before the company was acquired by Kuwait Petroleum Co in 1982 for two billion dlrs. Keaton 62 of Monterey Calif. admitted he failed to report the purchase to the Securities and Exchange Commission and admitted commiting wire fraud stemming from his transaction. He faces up to 10 years in prison on both counts and a fine of 11000 dlrs when he is sentenced by Judge Whitman Knapp on June 1. Reuter | FORMER SANTA FE EXEC ADMITS INSIDER TRADING |
S/P DOWNGRADES FOUR TEXAS BANKS, AFFECTS COMBINED 800 MLN DLRS DEBT, PREFERRED |
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K MART SEES 1987 SALES OF 26 BILLION DLRS, UP FROM 23.8 BILLION IN 1986 |
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Mobil Corp chairman Allen E. Murray said in the annual report issued today that the companys total 1987 capital expenditures would be lower than the three billion dlrs spent in 1986. Overall capital and exploration expenditures will fall slightly below the level for 1986 although well be ready to increase spending whenever the outlook becomes more promising Murray said. Mobil data in the annual report shows capital expenditures have been cut every year since 1984s 3.6 billion dlrs to 3.5 billion dlrs in 1985. Murray told shareholders that despite the cuts the company has promising acreage to explore as well as major oil and gas reserves to develop in the U.S. Canada Europe Africa and Indonesia. Over the past two weeks Mobil has announced restructuring of its domestic exploration and development organization and this week a restructuring of its oil services units which support the new affiliate. Mobils chairman has explained this change by saying we need a leaner organization to get more efficient usage from our assets said John Lord a Mobil Corp spokesman. Murray said in announcing the first reorganization which will combine its current three exploration and producing affiliates into one organization Mobil Exploration and Production U.S. Inc that it is more effective than the present organization and will improve the companys upstream competitive position. Yesterday the company said that it will restructure its Mobil Exploration and Producing Services Inc MEPSI to enhance the development and transfer of technology supporting critical areas of exploration drilling resevoir management and computer systems. Earnings from Mobils upstream operations in 1986 were 827 mln dlrs down 54 pct from the previous years 1.8 billion dlrs in earnings. Mobils strategy in the exploration and production sector will be to give most attention to exploration possibilities with the greatest long term potential the company said. In its annual report Mobil said that this will include greater emphasis on frontier plays that although riskier fit our strengths of technology and size...This probably also means a shift toward emphasis in the foreign area since selective overseas exploration offers greater potential. Reuter | MOBIL <MOB> CAPITAL EXPENDITURES LOWER IN 1987 |
<Interconnect Capital> said it seeks to acquire Gates Learjet Corp on friendly terms. Late yesterday the company said it has offered 7.07 dlrs per share for all Gates Learjet shares. Interconnect Capital said it intends to purchase the <Gates Corp> loan to Gates Learjet for 13 mln dlrs should its bid be successful. Interconnect Capital is controlled by <Interconnect Inc>. Gates Corp owns 64.8 pct of Gates Learjet. Reuter | INTERCONNECT PREFERS FRIENDLY GATES <GLJ> OFFER |
Brazils labour troubles eased a little today as the authorities announced they were withdrawing troops from the countrys main oil installations occupied three days ago. The troops went in at the request of the state-oil company Petrobras because of the threat of a strike by 55000 oil industry employees. Petrobras said in a statement today it had requested the withdrawal of the troops. The situation in the refineries was calm it said and the employees had indicated their willingness to negotiate a pay deal. A national seamens strike however continued and marines remained in the countrys main ports. The marines were despatched to the ports after the seamens strike now two weeks old was ruled illegal last Friday. A spokesman at the national strike headquarters in Rio de Janeiro said today a total of l63 ships were strike-bound 135 in Brazil and 28 in foreign ports. Yesterday two small companies specialised in the transport of chemicals Global and Flumar struck a pay accord with their seamen who have secured a 120 pct increase. Brazilian newspapers today hailed these agreements as a sign that the national strike could soon come to an end. Both companies employ fewer than 200 seamen and union leaders said the vast majority of Brazils 40000 seamen were still on strike. The threat of a stoppage by oil industry employees appeared today to be receding. Petrobras said in its statement that the company would meet union leaders for pay talks in Rio de Janeiro next Wednesday. Labour Minister Almir Pazzionotto would act as a mediator. Besides industrial troubles there has also been considerable unrest this week in the agricultural sector. On Tuesday hundreds of thousands of farmers held rallies throughout the country to protest against high interest rates. Television reports showed some of these protests still continuing today with farmers blockading banks with their vehicles in several towns in the states of Sao Paulo and Parana. The strikes in Brazil come as the government is trying to extricate itself from a serious debt crisis brought on by a deterioration in its trade balance. On February 20 President Jose Sarney announced that Brazil was suspending interest payments on 68 billion dlrs of debt to private banks. Because of the seamen strike exports are being delayed and the country is losing badly needed foreign exchange. Reuter | BRAZILIAN TROOPS TO LEAVE OIL REFINERIES |
Shr profit two cts vs loss 11 cts Net profit 31734 vs loss 190677 Sales 1325978 vs 1029921 Nine Mths Shr profit eight cts vs loss 53 cts Net profit 142200 vs loss 939435 Sales 4066777 vs 2793479 Reuter | INFINITE GRAPHICS INC <INFG> 3RD QTR JAN 31 NET |
(Mindscsape Inc) said it agreed to buy the educational software unit of Holt Rinehart and Winston Inc a subsidiary of Harcourt Brace Jovanovich Inc for undisclosed terms. Sales of the division which had been purchased by Holt Rinehart from CBS peaked at about 10 mln dlrs in 1985 Mindscape said. Reuter | MINDSCAPE BUYS HARCOURT BRACE <HBJ> UNIT |
Qtly dividend 17 cts vs 17 cts Pay April 10 Record March 26 Reuter | HEALTH-MOR INC <HMI> SETS DIVIDEND |
United States Video Vending Corp said <Hill International Inc> called a 260000 dlr promissory note that is collateralized by the assets of United States Video. The company which has two days to repay the note said there is no assurance it will be able to find the funds needed to meet the payment. Hill International said in January that it holds 5.9 pct of United States Videos outstanding stock the company said. Reuter | U.S. VIDEO <VVCO> SAYS NOTE IS CALLED BY LENDER |
ALC Communications Corp said it urged the U.S. District Court in Washington not to allow the regional Bell companies to offer long distance telephone services. ALC parent of Allnet Communications Services a long distance carrier said it made the request in comments filed with the court on a Department of Justice proposal to free the regional Bell companies from various business restrictions. Under terms of the divestiture of American Telephone and Telegraph Co <T> the Bell companies are prohibited from providing long distance services. Reuter | ALC <ALCC> OPPOSES JUSTICE DEPARTMENT PROPOSALS |
CAESARS WORLD SAYS IT CONSIDERS RESTRUCTURING AND SALE TO OTHER COMPANY |
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FAIRCHILD INDUSTRIES INC 4TH QTR OPER SHR LOSS 44 CTS VS LOSS EIGHT CTS |
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FAIRCHILD INDUSTRIES TERMINATES T46A TRAINER PROGRAM, CLOSES PLANT |
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Mobil Corp increased net proven reserves of natural gas liquids in 1986 from the previous year according to data in its 1986 annual report. The report states that total net proved reserves at years end stood at 2.5 billion barrels an increase of 94 mln barrels or four pct above the previous year and detailed data show that the gains resulted from an increase in net proved reserves of natural gas liquids. Mobil said gains were in Indonesia where a sixth production facility began operation in October with a capacity to manufacture 1.7 mln tonnes of liquified natural gas. The company also said that new capacity brought onstream last year replaced 120 pct of Mobils production which declined by about four pct in 1986 from the previous year. Detailed data on reserves shows that U.S. net proved reserves of crude oil fell to 837 mln barrels from 853 mln barrels in 1985 natural gas liquid reserves were also lower in 1986 from the previous year. Net proved crude oil reserves also fell in Canada to 224 mln barrels and in Europe to 403 mln barrels from the previous years level of 231 mln barrels and 439 mln barrels respectively. Reuter | MOBIL <MOB> ADDS NATURAL GAS RESERVES IN 1986 |
Atlantic Richfield Co said it sold its Plan Cell Research Institute unit and its Arco Seed Co operations in two transactions for undisclosed prices. The company said it sold Dublin Calif.-based Plant Cell Research to Montedision SpA of Milan Italy and ARCO Seed Co to U.F. Genetics of Hollister Calif. Atlantic Richfield said the divestitures are in line with its policy of focusing resources on oil gas chemical and coal operations. Reuter | ARCO SELLS TWO AGRICULTURAL RESEARCH OPERATIONS |
Caesars World Inc in rejecting a 28 dlr a share takeover bid by New York investor Martin Sosnoff said it is considering alternatives that include a restructuring of the company and the sale to someone else. In a filing with the Securities and Exchange Commission Caesars World said its board decided at a special meeting yesterday to explore and investigate several alternatives in an effort to thwart Sosnoffs takeover attempt. More | CAESARS WORLD <CAW> SAYS IT MULLS RESTRUCTURING |
Any further decline in raw sugar prices is likely to attract buying from the Soviet Union and China Woodhouse Drake and Carey said in their latest weekly market report. Present lower terminal values may be a reflection of the lack of renewed prompt offtake particularly from these two large consumers the report said. The week has seen good demand for Thai raws particulary for October/December shipment which has traded above twenty points premium to the October New York delivery it said. Reuter | LOW SUGAR PRICES MAY ATTRACT SOVIET/CHINESE |
Standard and Poors Corp said it downgraded four Texas banks in a move that affects a combined 800 mln dlrs of debt securities and preferred stock. Cut were the debt ratings of Allied Bancshares Inc <ALBN> First Amarillo Bancorp Inc <FAMA> MCorp <M> and Texas American Bancshares Inc <TXA>. S and P cited continuing asset quality problems. While problem energy loans appear to be abating real estate problems are mounting S and P said. The rating agency also said it expects earnings to remain under pressure for the remainder of this year. Standard and Poors reduced Allied Bancshares senior debt to BBB-minus from BBB and commercial paper to A-3 from A-2. Issues supported by a letter of credit from lead bank Allied Bank of Texas and the banks certificates of deposits were reduced to BBB-minus and A-3 from BBB and A-2 respectively. Allied has 50 mln dlrs of debt outstanding. S and P said its profitability remains severely depressed. S and P cut First Amarillos 15 mln dlrs of subordinated debt to CCC-minus from B-minus. The institutions implied senior debt rating is CCC-plus. S and P noted that First Amarillo has had three consecutive years of losses. S and P downgraded MCorps senior debt to BBB-minus from BBB-plus subordinated debt to BB-plus from BBB preferred to BB-minus from BB and commercial paper to A-3 from A-2. That affected 600 mln dlrs of debt. S and P cited rising non-performing loans and high loan-loss provisions. Also the agency cut to BBB-minus and A-3 from BBB-plus and A-2 respectively CDs and issues supported by letters of credit from the units MBank Dallas and MBank Houston. S and P cut to BB from BBB-minus Texas Americans 65 mln dlrs of senior debt. Lead bank Texas American Bank NVs CDs were lowered to BB-plus/B from BBB-minus/A-3. Reuter | S/P DOWNGRADES FOUR TEXAS BANKS |
K Mart Corp will sell 26 billion dlrs worth of goods in 1987 up from 23.8 billion dlrs in sales in 1986 chairman Bernard M. Fauber predicted. The K Mart official also said the company is committed to retail automation and will equip all K Mart stores with slot scanning point of sale register systems. Some 400 systems are already in place. Fauber said each K Mart costs five mln dlrs including land building fixtures equipment and inventory. Each store serves an average 90000 customers he said. Reuter | K MART <KM> SEES SALES INCREASING |
The following proposed securities offerings were filed recently with the Securities and Exchange Commission: Essex Chemical Corp <ESX> - Offering of 60 mln dlrs of convertible subordinated debentures due 2012 through Thomsom McKinnon Securities Inc and PaineWebber Inc. International Game Technology <IGAM> - Offering of 35 mln dlrs of senior notes due 1995 and 25 mln dlrs of convertible senior subordinated deberntures due 2002 through Drexel Burnham Lambert Inc. Reuter | PROPOSED OFFERINGS RECENTLY FILED WITH THE SEC |
CitiCorp <CCI> appears to be digging in its heels for tough negotiations over the billions of dollars in loans that Brazil owes to money center banks Wall Street analysts said. I view it as pre-negotiation posturing said analyst Carole Berger of Cyrus J. Lawrence Inc referring to both Brazil and Citicorp. Brazil recently stopped paying interest on its commercial bank debt. Today CitiCorp said its first quarter income would be reduced by 50 mln dlrs after tax if it lists the loans as non-performing status. Citicorp filed an 8-K form with the Securities and Exchange Commission indicating a material change in its financial situation. Citicorp is saying you cant scare us with threats well make your loans non-performing right now Berger said. The loans have to be treated as non-performing after 90 days without a payment. CitiCorp said only that the situation will be reviewed at the end of the current quarter. Berger asserted that Brazil is doing its own politicking by talking to U.S. regulators and trying to drive a wedge between U.S. and European banks. Analyst Lawrence Cohn of Merrill Lynch and Co said it is unlikely the situation will be resolved until the second half of this year. Ultimately the Brazilians are going to have to pay up on all the interest they owe Cohn said. The real issue is the rescheduling of debt terms. Another question is whether or not the International Monetary Fund can help Brazil with a new austerity program. Stocks of money center banks were mostly down fractions in late dealings. One trader most stocks in the group bounced off their lows by midday as investors took the news in stride. Cohn said the bank stocks may be risky until numbers on non-performing loans are reported for each bank. But he said investors looking ahead six to 12 months might want to buy at present levels for the tremendous fundamental values in the group. Analyst Robert Gordon of Shearson Lehman Brothers Inc said Manufacturers Hanover Corp <MHC) has the greatest exposure to Brazilian loans of any New York bank in terms of percentage of earnings. He said his only two recommendations currently among New York banks are J.P. Morgan and Co <JPM> and Bankers Trust Co <BT> which happen to have the least exposure. Gordon said his positive opinion on J.P. Morgan and Bankers Trust was not merely a response to the fact that the two have lower exposure to Brazilian loans than other banks. In fact he said theres a chance those banks could get more involved in the future. He noted that Morgan has already set up a brokerage subsidiary to deal in loans to less developed countries. I dont see any reason to change full year earnings estimates said Frederick Meinke analyst at E.F. Hutton Co. He thinks the confrontation with Brazil could end in a replay of a situation that occurred with Argentina in 1984 and 1985. Meinke noted that in the case of Argentina the loans became non-accruing for a couple of quarters but then when the banks came to an agreement with Argentina all the back interest was paid. What it did was distort the quarterly earnings pattern he said. He said in the case of Brazil write-offs of loans is a worst-case outcome which is highly unlikely. He noted that Brazil is a country with a diversified economy going through some economic upheaval after the transition from a military to a civilian government. The countries of Latin America have too much debt relative to their ability to service it said John Mason of Interstate Securities. Weve been fiddling around with these problems for five years and the hour is growing late. He said up to now the banks have reduced their spreads cut interest rates internally and extended maturities and none of these measures has been enough. He expects re-classification of as much as a third of the loans as non-accruing and he sees partial write downs of some loans. Nevertheless Mason thinks the money center bank stocks could be poised for a short term rally. A spokesman at First Chicago Corp <FNB> said it is premature to put Brazils loans on a cash basis. It is our expectation that economic development will allow Brazil to meet its debt a spokesman said. Bankers Trust in New York said it would be premature to make a decision. Several other banks queried by Reuters said much the same thing. A spokesman at Manufacturers Hanover noted that of 2.3 billion dlrs in loan exposure to Brazil only 1.3 billion is subject to Brazils unilateral moratorium on repayment of interest. Reuter | TALKING POINT/BANK STOCKS |
ChemLawn corp said it has asked potential purchasers of the company to submit their proposals by 1700 EST on March 18. ChemLawn said if Waste Management Inc <WMX> intends to participate in the bidding process it will have to submit a confidentiality agreement to Chemlawn financial advisor Smith Barney Harris Upham and Co Inc. Waste Management has a 27 dlr per share tender offer for Chemlawn underway that Chemlawn has already rejected as inadequate. Chemlawn has already said it is holding talks with various parties on the sale of the company and said it has informed all potential purchasers that they mnust sign confidentiality agreemnents to receive confidential information on Chemlawn. ChemLawn said if Waste Management were to sign such an agreement ChemLawn would supply it with the same information being supplied to other potential purchasers. But it said it will not make an exception for Waste Management which would give that company an advantage in the bidding process. Reuter | CHEMLAWN <CHEM> SEEKS BIDS BY MARCH 18 |
Central Bank President Jose Luis Machinea said negotiations with creditor banks on Argentinas 30 billion dlr private sector foreign debt were difficult. There is considerable divergence with the banks. We must try to get them to lower the spreads Machinea told Reuters. He said negotiations with the steering committee for the countrys creditor banks in New York would not end next week. Machinea leaves for New York tomorrow with Treasury Secretary Mario Brodersohn to complete Argentinas team at negotiations with the steering committee for a 2.15 biilion dlr loan to see the country through 1987. Argentina is aiming at four pct growth in 1987 and has said this target is not negotiable. Reuter | ARGENTINE DEBT TALKS DIFFICULT-CENTRAL BANK HEAD |
Shr loss 48 cts vs loss 10 cts Net loss 1234000 vs loss 259000 Revs 715000 vs 1941000 Year Shr loss 1.26 dlrs vs loss 34 cts Net loss 3229000 vs loss 870000 Revs 3001000 vs 9767000 NOTE: 1986 net both periods includes 672300 dlr writedown of value of seismic laboratory and 165000 dlr increase in reserve for doubtful accounts. Reuter | GTS CORP <GTSC> 4TH QTR DEC 31 LOSS |
American Motors Corp said its U.S. sales for the March 1-10 period dropped 57 pct to 760 cars from 1780 cars in the same period last year. There were eight selling days in both years. Domestic sales for the calendar year-to-date fell 61 pct to 5682 cars from 14641 cars in the comparable period of 1986 American Motors controlled by Renault of France said. Jeep sales in early March rose 18 pct to 4500 vehicles from 3800 vehicles at the same time last year and for the year-to-date declined two pct to 35523 from 36050 vehicles in the comparable period American Motors said. Reuter | AMERICAN MOTORS <AMO> EARLY MARCH SALES OFF |
Oper shr loss 44 cts vs oper loss eight cts Oper net loss 3158000 vs profit 2035000 Rev 166.0 mln vs 162.3 mln Year Oper shr loss 34 cts vs loss 93 cts Oper net profit 7599000 vs loss 283000 Rev 643.3 mln vs 576.3 mln NOTE: Per share results after provision for pfd dividends. Fourth qtr earnings exclude loss from discontinued operations of 67.6 mln dlrs or 4.72 dlrs a share and a loss of 25.8 mln dlrs or 1.81 dlrs a share from tax reverse versus a gain from discontinued operations of 1.8 mln dlrs or 14 cts a share in 1985s 4th qtr. 1986 oper earnings excludes loss from discontinued operations of 62.5 mln dlrs or 4.41 dlrs a share versus a loss of 166.8 mln dlrs or 12.24 dlrs a share in 1985. Reuter | FAIRCHILD INDUSTRIES INC <FEN> 4TH QTR LOSS |
J.P. Morgan and Co said Peter F. Culver 42 senior vice president of its Morgan Guaranty Trust Co subsidiary and general manager of the Euro-Clear Operations Centre in Brussels has died of an apparent heart attack at a business meeting in Frankfurt. Reuter | J.P. MORGAN <JPM> OFFICIAL DIES |
SmartNames Inc said it reached an agreement in principle to buy American Information Network. Terms of the agreement were not disclosed. The company said the purchase of American will allow it to meet the needs of a broader range of direct mail industry customers. Reuter | SMARTNAMES TO BUY AMERICAN INFORMATION NETWORK |
ROCKWELL INTERNATIONAL EXTENDS STOCK REPURCHASES BY ANOTHER 500 MLN DLRS |
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Auxton Computer Enterprises Inc said it has entered into an agreement to provide cellular business office services to a major non-wireline cellular carrier in 12 major cellular markets throughout the U.S. It said it has also reached agreement to determine the process needed to install its SOCRATES and LUCAS software packages for a national communications carrier outside the U.S. In addition it said it has agreed to start evaluating the feasibility of installing its SOCRATES software to provide a major national satellite paging company with billing services to subscribers traveling beyond the signal capacities of their home systems. Reuter | AUXTON COMPUTER <AUXT> IN ARRANGEMENTS |
Standard and Poors Corp said it expects the asset-backed securities market to grow dramatically over the next few years spurred by what it termed the compelling benefits of secured financing. S and P projected the market would grow to 100 billion dlrs in the next five years. Investment bankers say the market currently stands at roughly 11.9 billion dlrs. Assets used to secure the debt included auto loans credit cars computer leases and corporate loans S and P noted. The most active issuers to date had two main motivations lower costs of funding and increased financial flexibility. Standard and Poors pointed out that General Motors Corp <GM> Chrysler Corp <C> and Nissan Motor Co Ltd <NSAN> realized funding advantages by issuing car loan backed debt. But more important these issuers were able to increase loan volume and hence car sales without substantially increasing financial leverage the rating agency said. S and P noted that Bank of America a unit of BankAmerica Corp <BAC> and RepublicBank Corps <RPT> RepublicBank Delaware unit issued credit card backed debt and also realized lower funding costs while mitigating increased funding and liquidity risks resulting from weak financial performance. Reuter | S/P SEES DRAMATIC GROWTH FOR ASSET-BACKED DEBT |
H.K. Porter Inc Co said it will redeem its 5-1/2 pct cumulative sinking fund preference stock. H.K. Porter said it will provide more details about the redemption later in the day. The companys stock was halted in trading on the NYSE at 97-1/4. Reuter | H.K. PORTER <PHK PR> TO REDEEM PREFERRED STOCK |
Atlantic Richfield Co said it sold its Plan Cell Research Institute unit and its Arco Seed Co operations in two transactions for undisclosed prices. The company said it sold Dublin Calif.-based Plant Cell Research to <Montedision SpA> of Milan Italy and ARCO Seed Co to U.F. Genetics of Hollister Calif. Atlantic Richfield said the divestitures are in line with its policy of focusing resources on oil gas chemical and coal operations. Reuter | ARCO <ACR> SELLS TWO OPERATIONS |
GTE Corp said it supports recommendations by the Department of Justice to allow the regional Bell companies to enter some new businesses but that it rejects the governments proposal to let the companies offer long distance services. As a vigorous competitor in many telecommunications businesses GTE supports efforts by policy makers to preserve and promote fair opportunities for competition GTE said in comments filed with the U.S. District Court which oversees the regulation of the Bell companies. But the Stamford Conn.-based company added that entry by the regional Bell companies into the long distnce market would set back the progress toward a truly competitive interexchange environment that has occurred. GTE owns the largest independent telephone system in the country and manufacturers telecommunications equipment through joint ventures with <Fujitsu> of Japan and <Siemens AG> of West Germany. GTE also holds a 50 pct stake in <US Sprint Communications Co> the third-largest long distance carrier in the country. Reuter | GTE <GTE> COMMENTS ON JUSTICE DEP'T PROPOSALS |
Construction workers today began building a 26 km (16 mile) pipeline to link Ecuadors jungle oilfields to a pipeline in Colombia through which Ecuadorean crude could be pumped to the Pacific Coast Ecuadorean energy minsitry officials said. They said it would take about two months and at least 15 mln dlrs to build the pipeline from Lago Agrio in Ecuador to Puerto Colon Colombia for connection to the Colombian pipeline which goes to the port of Tumaco on Colombias Pacific Ocean coast. The Lago Agrio to Puerto Colon pipeline is designed to transport between 30000 to 50000 barrels of day (bpd) of Ecuadorean crude to the Colombian pipeline they said. The Colombian pipeline to Tumaco has ample room for Ecuadorean crude they said. It is currently transporting about 17000 bpd out of its 100000 bpd capacity an Ecuadorean energy ministry official said. The Ecuadorean crude reaching Tumaco will be shipped by boat to Ecuador for refining into oil products to meet domestic demand. The completion of the pipeline would allow Ecuador to resume some of production paralysed since March six by an earthquake the night before. The tremor ruptured the countrys main pipeline from jungle oilfields to the Ecuadorean port of Balao on the Pacific Ocean. Ecuador was pumping about 260000 bpd before the earthquake. It would take about five months to repair the pipeline to Balao government officials said. Ecuador estimates that it will cost between 145 to 150 mln dlrs to repair oil installations damaged by the earthquake energy ministry Javier Espinosa said. Reuter | ECUADOR BEGINS WORK ON OIL PIPELINE TO COLOMBIA |
The U.S. Agriculture Departments Export Enhancement Program EEP contributed to the recent agreement to include farm subsidies in the new round of global trade talks according to the General Accounting Office. GAO Senior Associate Director Allan Mendelowitz told a Senate Agriculture subcommittee that the EEP has increased the cost of the European Communitys Common Agricultural Policy. However there is little reason to believe that once EEP expires gains in U.S. farm exports attributable to the program will be sustained in targeted markets he said. Mendelowitz said broadening the EEP by making it across-the-board would eliminate charges of discrimination by traditional buyers and increase pressure on the EC but antagonize non-subsidizing exporters. Reuter | USDA'S EXPORT BONUS SAID TO AFFECT TRADE TALKS |
<Drexel Burnham Lambert Inc> said during the first nine weeks of 1987 ended March six it managed or co-managed 57 transactions representing 8.6 billion dlrs in the public and private corporate markets. Overall Drexel said it ranks fifth in the category for the period with a market share of 10 pct up from eight pct for the same period last year. Drexel said its market share of lead managed industrial financing also increased to 23 pct from 14 pct during the nine week period. Reuter | DREXEL BURNHAM REPORTS UNDERWRITING RESULTS |
Chrysler Corps Chrysler Motors unit said it increase the price of its Chrysler Fifth Avenue luxury sedan by 300 dlrs to 15966 dlrs. The higher price applies to cars produced by Chrysler at the American Motors Corps <AMO> Kenosha Wis. assembly plant where Chrysler shares production with American Motors. Shipments of Chrysler cars from Kenosha began March nine. Chrysler in the past year transferred production of the Fifth Avenue and two other car models to Kenosha from its St. Louis Number Two facility. A Chrysler spokesman said the price increase will cover the cost of moving the production line. The spokesman said the higher price will apply only to the Fifth Avenue. Prices of the other two Chrysler models--the Plymouth Gran Fury and Dodge Diplomat--made at Kenosha will remain unchanged. Chrysler moved production of the three large rear-wheel-drive cars to Kenosha in order to build stretch minivans at the St. Louis facility. The spokesman said the first stretch minivan will roll off the line later this month. Reuter | CHRYSLER <C> BOOSTS PRICE ON FIFTH AVENUE CAR |
The Netherlands recorded a flat trade balance in January with both exports and imports totaling 14.2 billion guilders a modestly lower compared with December but sharply down from January last year an Economics Ministry spokesman said quoting official statistics. January 1986 exports compared with a December figure of 15.0 billion guilders and were 25 pct below last years level of 18.9 billion. January 1986 imports compared with 15.3 billion guilders in December and fell 18 pct from 17.4 billion in January last year. REUTER | DUTCH TRADE FULLY IN BALANCE BUT DOWN IN JANUARY |
A greater than anticipated need competitive prices and political motivations could be sparking Soviet interest in U.S. corn industry and government officials said. As rumors circulated through grain markets today that the Soviet Union has purchased an additional 1.5 mln tonnes of U.S. corn industry and government sources noted a number of factors that make Soviet buying of U.S. corn likely. First there are supply concerns. Some trade sources said recent speculation has been that last years Soviet grain crop be revised to only 190 mln tonnes rather than the 210 mln announced therby increasing the Soviet need for grain. A drop in Argentine corn crop prospects could also affect Soviet corn buying an Agriculture Department source said. Dry weather in Argentina -- a major corn supplier to the USSR -- and reported crop problems prompted USDA to lower its Argentine 1986/87 corn crop estimate this week to 11.0 mln tonnes down from 11.5 mln. Argentina corn exports were also cut by 500000 tonnes to 6.8 mln tonnes. Argentina has already committed four mln tonnes of this years corn for export a USDA official said with two mln tonnes of that booked for April-June delivery to the USSR. Significant downside potential still exists for the Argentine crop the official said which will decrease the amount of additional corn that country can sell to Moscow. If the Soviet needs are greater than we have been thinking then they might need more than what Argentina can provide during the April to June period he said. Current competitive prices for U.S. corn have also sparked Soviet buying. U.S. corn was reported to be selling on the world market earlier this week for around 71 dlrs per tonne Argentine corn for 67 dlrs -- a very competitive price spread U.S. and Soviet sources said. This price difference makes American corn competitive Albert Melnikov commercial counselor for the Soviet Union told Reuters. Impending crop problems in Argentina will likely cause those prices to rise and with the recently strong U.S. corn futures prices the Soviets might feel corn prices have bottomed and that this is a good time to buy sources said. Finally some industry sources said that by buying the minimum amount of corn guaranteed under the U.S./USSR grains agreement (four mln tonnes) the Soviet Union may be hoping to convince the USDA to offer Moscow a subsidy on wheat. In an inteview with Reuters this week USDA secretary Richard Lyng said that no decision had been made on a wheat subsidy offer but that such an offer had not been ruled out. Reuter | NUMEROUS FACTORS SAID POINT TO USSR CORN BUYING |
Fairchild Industries Inc said it will close the Fairchild Republic plant at Farmingdale this year and sell it next year after agreeing with the U.S. Air Force to terminate the T-46A trainer aircraft program. John Sanford the Fairchild Republic units president and vice president of the corporation said Reublic will fulfill its remaining current obligations but will cease work on the T-46A immediately. Fairchild said the unit has already delivered two protoype and one production T-46A. Sanford said lack of additional Air Force funding for the trainer due to budget constraints prompted the termination agreement. Sanford added that without the T-46A or business to replace the work Fairchild was forced to close the plant. Fairchild said it expects to retain about 200 engineers and technicians at a small operation to be set up in 1987 on Long Island to continue providing technical support for the Air Forces A-10 aircraft. Fairchild added that its Fairchild Composites/Bonding Center formerly a part of the Fairchild Republic operation will become an independent operation. Paul Wright Fairchild president and chief operating officer said With the settlement of the T-46A issue we have put behind us the last of two problem aircraft programs that caused the company heavy losses over the past two years. Wright added that the company can now move forward with its restructuring to emphasize on growth areas in aerospace communications electronics and its commercial and industrial businesses. Earlier Fairchild reported losses from continuing operations in 1986s 4th qtr of 3.2 mln dlrs or 44 cts a share. This compares with a operating profit of two mln dlrs or a loss of eight cts a share after subtracting the provisions for preferred shares in 1985s fourth quarter. Fairchild reported 1986 operating net of 7.6 mln dlrs or a loss of 34 cts a share after provisions for preferred shares versus a loss of 283000 dlrs or 93 cts a share in 1985. Reuter | FAIRCHILD INDUSTRIES <FEN> CLOSES PLANT |
Qtly div 35 cts vs 35 cts previously Pay April 17 Record March 31 Reuter | DESOTO INC <DSO> REGULAR DIVIDEND SET |
Qtly div Class B 1-1/2 cts vs 1-1/2 cts prior Class A two cts vs two cts prior Pay April 30 Record April 15 Reuter | METHODE ELECTRONICS INC <METHB> REGULAR PAYOUT |
Texas Utilities Cos TU Electric unit said it filed an application with the Texas Public Utilities Commission for authorization to refund about 69.7 mln dlrs to customers. The refund TUs fifth since May 1986 is made possible by lower costs for fuel to make electricity the company said. Reuter | TEXAS UTILTIES <TXU> UNIT SEEKS RATE REFUND |
The growth rate of Brazilian industrial output slowed in January to 6.09 pct above the same 1986 month after rising 6.71 pct in December Brazilian Geography and Statistics Institute figures show. The result is in line with the declining trend in the growth rate since October the Institute said. In the 12 months to end-January industrial production was 10.48 pct above the 12 months to end-January last year while in calendar 1986 output was 10.89 pct above 1985. The biggest output rises in the 12 months to end-January were 23.68 pct in pharmaceuticals and 22.12 pct in machinery. Reuter | BRAZIL INDUSTRIAL GROWTH RATE SLOWED IN JANUARY |
RJR Nabisco Inc is raising 500 mln dlrs via an issue of sinking fund debentures due 2017 yielding 8-3/4 pct said lead manager Shearson Lehman Brothers Inc. The debentures have an 8-5/8 pct coupon and were priced at 98.675 to yield 115 basis points over the off-the-run 9-1/4 pct Treasury bonds of 2016. Non-refundable for 10 years the issue is rated A-1 by Moodys and A by Standard and Poors. A sinking fund beginning in 1998 to retire annually five pct of the debentures can be increased by 200 pct at the companys option. Dillon Read and Co Inc co-managed the deal. Reuter | RJR NABISCO <RJR> SELLS SINKING FUND DEBENTURES |
Britain wants Japan to agree a timetable for work towards joint rules on capital adequacy for banks along the lines of a January outline agreement between the U.S and the U.K. Corporate Affairs Minister Michael Howard said. Howard told a Nikkei conference on Tokyo financial markets I want to see an agreement between us on what progress is to be made and the rate at which it will happen. Japanese vice-minister of finance for international affairs Toyoo Gyohten told the conference yesterday he was ready to discuss capital adequacy but no negotiations were planned and he could not see how or when agreement would be reached. Howard said another issue he would raise during a visit to Japan starting on April 13 was equal access for U.K. Financial firms to the Japanese market. He said 14 London-based financial firms were based in Tokyo nine of them wholly British with licences to deal in securities. This compared with 58 wholly-licensed Japanese firms in London. I am not a protectionist. We welcome all these firms here. But I want our firms to be able to compete just as freely in Japan and at the moment they are not allowed to do so he said. REUTER | BRITAIN WANTS BANK REGULATION DEAL WITH JAPAN |
Loadmaster Systems Inc said Mark A Cote has been appointed president of the company and its Loadmaster Systems Inc USA subsidiary. The company said he succeeds David L. Shorey who accepted an appointement as president of <Shelf Storage Systems International>. Reuter | LOADMASTER SYSTEMS <LSMIF> NAMES NEW PRESIDENT |
Moodys Investors Service Inc said it may downgrade Home Shopping Network Incs 250 mln dlrs of Ba-3 senior notes. The rating agency cited Home Shoppings plan to issue additional debt thereby increasing leverage. Moodys noted that the company intends to use a portion of the proceeds to repurchase existing debt. Moodys said its review would focus on Home Shoppings future capital structure and examine the added risk associated with the companys commitment to diversify its product line to include financial services. Reuter | MOODY'S MAY DOWNGRADE HOME SHOPPING <HSN> DEBT |
Qtly div 15 cts vs 15 cts prior Pay April 30 Recrod April nine Reuter | GENERAL CINEMA CORP <GCN> COMMON STOCK DIVIDEND |
Shr 25 cts vs 18 cts Net 109131 vs 75793 Revs 1811636 vs 1280618 Reuter | STEPHAN CO <FTC> YEAR NET |
USDA REPORTS 10.572 MLN ACRES ENROLLED IN FOURTH CONSERVATION RESERVE PROGRAM SIGNUP |
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