The Internal Revenue Service knew R. Allen Stanford was taking loans from his Antigua bank and found nothing wrong with the arrangement, the Texas tycoon’s tax lawyer testified at Stanford’s fraud trial Tuesday.
“The IRS always treated those as loans to Mr. Stanford,” said Larry Campagna, who represented Stanford in personal and business tax disputes with the IRS in 1998 and again in 2003.
The IRS did change its position, however, about the correct way to characterize payments from Stanford to his Houston-based Stanford Financial Group, the parent company of Stanford’s scores of business operations. He was sole owner of Stanford Financial and its subsidiaries.
Although the tax agency ruled that those should be listed as loans on 1998 tax returns, it said the payments should be recorded on 2001 and 2002 returns as dividend payments to Stanford, Campagna said.
Defense attorney Robert Scardino asked Campagna if anything about the returns prompted the IRS to ask criminal investigators to initiate a fraud probe.
“No,” Campagna said before he was dismissed from the witness stand.
Stanford, a native of Mexia, is accused of leading a fraud that prosecutors allege took $7 billion from clients who bought certificates of deposit in Stanford’s bank in Antigua. They were led to believe their money was invested conservatively, according to prosecution testimony, while much of it really went to personal loans to Stanford for his pet business projects and luxurious life.
Two other defense witnesses testified Monday. However, U.S. District Judge David Hittner decided Stanford’s coughing from an apparent cold needed medical attention and stopped the trial early.
Osvaldo Pi, an accountant who went to work in 2001 for Stanford Venture Capital, spent much of his time on the stand explaining venture capital, private equity and other financial terms to jurors.
Private equity firms often seek investments, on their own behalf or for well-heeled clients, in ventures that aren’t publicly traded and seek to raise capital by selling ownership shares. Private equity firms also may arrange buyout deals that take public companies private.
Pi said his job included identifying investment opportunities for Stanford Venture Capital, and that it raised millions of dollars for companies Pi and others vetted for risk and potential.
In the trial’s fifth week, the defense is attempting to show that Stanford was interested in legitimate investments, that he was consolidating his companies to make them more manageable and that the companies would have remained solvent if the U.S. government hadn’t filed a fraud suit and shut them down in February 2009.
Pi testified that the receiver who took over the assets of Stanford Financial Group and its subsidiaries didn’t seem interested in pursuing investments that remained viable, but in liquidating the companies’ assets. He said he stayed with the firm for seven months after it went into receivership.
Karen Pittman, a librarian for Andrew College, a private junior college in Georgia, testified that Stanford hired her to research whether he was related to Leland Stanford, founder of Stanford University in California. Stanford touted the relationship in his promotional brochures although university officials deny any kinship.
Pittman said she found a common relative, but after two years of research could not say for sure that Leland Stanford and Allen Stanford were related.
Defense witnesses have portrayed Stanford as the company visionary who left details to others – notably Chief Financial Officer James Davis. Davis pleaded guilty to three felony charges and testified that he and Stanford knowingly misled investors and misused their money.
Stanford and others were indicted in June 2009. He has been held without bail as a possible flight risk since his arrest that month.
Three other Stanford executives indicted separately and scheduled for trial later are free on bail, and an Antiguan regulator accused of taking bribes is fighting extradition from that Caribbean nation. Davis was charged separately in connection with his guilty plea and is cooperating with the government.
terri.langford@chron.com
http://tourism9.com/ http://vkins.com/
2012年2月23日星期四
2012年2月6日星期一
DENVER–(BUSINESS WIRE)–
UDR, Inc. (NYSE: UDR – News), a leading multifamily real estate investment trust, today announced its fourth quarter and full year 2011 results.
The Company generated Funds from Operations (FFO) of $80.2 million or $0.35 per diluted share for the quarter ended December 31, 2011, as compared to $53.4 million or $0.28 per diluted share in the fourth quarter of 2010. Excluding all one-time items, the Company’s fourth quarter 2011 FFO-Core would have been $0.34 per diluted share. See the reconciliation below for further detail.
For the twelve-months ended December 31, 2011, UDR generated FFO of $1.28 per diluted share as compared to $1.09 per diluted share for the twelve-months ended December 31, 2010. Excluding all one-time items, the Company’s 2011 FFO-Core would have been $1.28 per diluted share. See the reconciliation below for further detail.
A reconciliation of FFO to GAAP Net Income can be found on Attachment 2 of the Company’s fourth quarter Supplemental Financial Information.
Tom Toomey, UDR’s President and CEO stated, “We are pleased with the progress we made in further transitioning our portfolio in 2011, including $1.2 billion of acquisitions in New York City, a $500 million asset exchange that increased our presence in San Francisco and the Boston metro area, the expansion of our development and redevelopment pipeline by over $800 million and the disposition of $594 million of non-core assets. These transactions improved the Company’s portfolio by increasing our ownership interests in markets characterized by above-average job growth, low home affordability, below-average new supply risk and superior revenue growth and return prospects.” Mr. Toomey continued, “Driven by sound market fundamentals, a more advantageous geographic and asset mix and our robust operating and technology platforms, 2012 will be another strong year for UDR. As a result, the Board of Directors has approved a 10% increase in our annual common stock dividend to $0.88 per share for 2012.”
Operations
Same-store net operating income increased 7.7 percent year-over-year for the fourth quarter 2011 while same-store revenue increased 5.3 percent over the same period. Same-store physical occupancy decreased 40 basis points to 95.1 percent as compared to the prior year period. Same-store expenses increased 0.5 percent driven by an increase in utilities costs and real estate taxes. The rate of turnover increased to an annualized rate of 50 percent from 47 percent in the fourth quarter of 2010.
Sequentially, the Company’s same-store NOI increased by 2.3 percent driven by increased revenues of 0.2 percent and a 3.9 percent decrease in same-store expenses during the fourth quarter of 2011.
For the twelve-months ended December 31, 2011, the Company’s same-store revenue increased 4.1 percent as compared to the prior year while expenses increased 1.4 percent, resulting in a same-store NOI increase of 5.6 percent as compared to the prior year period. Year-over-year occupancy decreased by 20 basis points to 95.5 percent.
Technology Platform
Improving the Company’s operational efficiency, while increasing resident satisfaction, are the compelling factors for our continued investment in technology. The Company’s technology platform has gained acceptance and recognition from our residents as shown by the following utilization rates:
Development and Redevelopment Activity
As previously announced during the fourth quarter of 2011, the Company acquired land for its Village at Bella Terra development project in Huntington Beach, CA. The newly started community is projected to include 467 homes, cost $150 million and be completed in the second quarter of 2013.
In addition, the Company acquired a land parcel adjacent to its Vitruvian ParkSM development in Addison, TX for $4.7 million and a land parcel adjacent to its Garrison Square community in the Boston metro area for $4.6 million.
Joint Venture Investment Activity
As previously announced on December 21, 2011, the Company and its joint venture partner Kuwait Finance House (“KFH”) acquired 1301 Thomas Circle in Washington, D.C. for $153.8 million. The 292-home apartment community is located in the Logan Circle neighborhood near the 14th Street Corridor, is within minutes of the Mt. Vernon Square and McPherson Metro Stations and is near UDR’s wholly-owned Andover House community. The 10-story community was completed in 2006, is well-amenitized, has a 256-space parking garage and had an average monthly income per occupied home of $2,740 at the time of acquisition. Additional details related to the transaction can be found in the December 21, 2011 press release on the Company’s website at www.udr.com.
Following the purchase of 1301 Thomas Circle, there remained approximately $169 million of investment capacity under the terms of the joint venture agreement.
Disposition Activity
During the fourth quarter of 2011, the Company sold nine communities containing 2,331 homes for $275.4 million in total gross proceeds, bringing full-year 2011 asset dispositions to $593.9 million. At the time of the fourth quarter dispositions, total income per occupied home for the communities sold averaged $1,065 per month. The fourth quarter dispositions were located in a variety of markets including the Eastern Shore of Maryland, Raleigh, the East Bay area of San Francisco, the Inland Empire, San Diego, Houston and San Antonio.
Capital Markets Activity
During the fourth quarter of 2011, the Company completed a number of debt related activities aimed at managing its near term maturities and capital costs.
As previously announced, on October 25, 2011, the Company entered into a new $900 million unsecured revolving credit facility, replacing its prior $600 million facility. The new facility has an initial term of four years, includes a one-year extension option and contains an accordion feature that allows the Company to increase the facility to $1.35 billion.
Based on the Company’s credit ratings at the time of closing, the credit facility carried an interest rate equal to LIBOR plus a spread of 122.5 basis points and a facility fee of 22.5 basis points.
Coinciding with the closing of the new revolving credit facility, the Company amended and re-priced its $250 million unsecured term loan due in January 2016. The term loan was re-priced to LIBOR plus 142.5 basis points from LIBOR plus 200 basis points and its underlying covenants were aligned with those of UDR’s new revolving credit facility. Additional details related to these debt activities can be found in the October 25, 2011 press release on the Company’s website at www.udr.com.
In addition, the Company prepaid a $100.0 million secured mortgage at par in November. The mortgage had an interest rate of 6.78 percent and was originally due in May of 2012.
In the fourth quarter of 2011, the Company raised $15.5 million of equity through the sale of approximately 630 thousand shares at a weighted average net price of $24.67 per share under its “At the Market” equity offering program. In 2011, the Company raised a total of $989 million of equity from a combination of “At the Market” proceeds, a secondary offering completed in July and the issuance of operating partnership units.
Balance Sheet
At December 31, 2011, UDR had $738.7 million in availability through a combination of cash and undrawn capacity on its credit facilities. Potential sources of additional capital include the Company’s $5.0 billion of unencumbered assets (on a historical non-depreciated cost basis), 7.4 million shares available for issuance under its “At the Market” equity offering program in addition to $400 to $600 million in expected dispositions in 2012.
UDR’s total indebtedness at December 31, 2011 was $3.9 billion. The Company ended the fourth quarter with fixed-rate debt representing 73 percent of its total debt, a total blended interest rate of 4.0 percent and a weighted average maturity of 4.4 years. UDR’s fixed charge coverage ratio (adjusted for non-recurring items) was 2.6 times at year-end 2011 versus 2.3 times a year ago.
Post Quarter Activity
Joint Venture Investment Activity
On January 12, 2012, UDR formed a second real estate joint venture with MetLife (UDR/MetLife II) wherein each party owns a 50 percent interest in a $1.3 billion portfolio of 12 operating communities containing 2,528 apartment homes.
The 12 operating communities in the joint venture include seven communities from the Company’s first real estate joint venture with MetLife (UDR/MetLife I) formed on November 8, 2010, while the remaining five communities were newly acquired by UDR/MetLife II. The newly acquired communities, collectively known as Columbus Square, are recently developed, high-rise apartment buildings located on the Upper West Side of Manhattan and were purchased for $630 million. Additional details related to the transaction can be found in the January 12, 2012 press release on the Company’s website at www.udr.com.
With the closing of UDR/MetLife II, the original joint venture between the parties, UDR/MetLife I, now comprises 19 operating communities containing 3,930 homes as well as 10 vacant land parcels. Historical cost of the venture is $1.8 billion and the Company’s weighted average ownership interest in the UDR/MetLife I operating communities is now 12.6 percent and 4.0 percent for the land parcels in the venture.
Capital Markets Activity
On January 5, 2012, the Company priced a ten-year, $400 million offering of 4.625 percent senior unsecured notes under its existing shelf registration. The notes will mature on January 10, 2022. This offering fulfills the Company’s full-year 2012 guidance for $400 million in new debt issuances. A portion of this offering was used to repay $100 million of 5 percent unsecured debt originally due in January 2012. Additional details related to the transaction can be found in the January 5, 2012 press release on the Company’s website at www.udr.com.
In addition, the Company prepaid a $30.6 million mortgage at par in January 2012 that was secured by its 21 Chelsea community in Manhattan.
In January 2012, the Company raised $29.1 million of equity through the sale of approximately 1.2 million shares at a weighted average net price of $24.68 per share under its “At the Market” equity offering program.
Supplemental Information
The Company offers Supplemental Financial Information that provides details on the financial position and operating results of the Company which is available on the Company’s website at www.udr.com.
Conference Call and Webcast Information
UDR will host a webcast and conference call at 11:00 a.m. EST on February 6, 2012 to discuss fourth quarter results. A webcast will be available on UDR’s website at www.udr.com. To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.
To participate in the teleconference dial 800-762-8779 for domestic and 480-629-9771 for international and provide the following conference ID number: 4501829.
A replay of the conference call will be available through February 20, 2012, by dialing 800-406-7325 for domestic and 303-590-3030 for international and entering the confirmation number, 4501829, when prompted for the pass code.
A replay of the call will be available for 90 days on UDR’s website at www.udr.com.
Full Text of the Earnings Report and Supplemental Data
Internet — The full text of the earnings report and Supplemental Financial Information will be available on the Company’s website at www.udr.com.
Mail — For those without Internet access, the fourth quarter 2011 earnings report and Supplemental Financial Information will be available by mail or fax, on request. To receive a copy, please call UDR Investor Relations at 720-348-7762.
Forward Looking Statements
Certain statements made in this press release may constitute “forward-looking statements.” Words such as “expects,” “intends,” “believes,” “anticipates,” “plans,” “likely,” “will,” “seeks,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement, due to a number of factors, which include, but are not limited to, unfavorable changes in the apartment market, changing economic conditions, the impact of inflation/deflation on rental rates and property operating expenses, expectations concerning availability of capital and the stabilization of the capital markets, the impact of competition and competitive pricing, acquisitions, developments and redevelopments not achieving anticipated results, delays in completing developments, redevelopments and lease-ups on schedule, expectations on job growth, home affordability and demand/supply ratio for multifamily housing, expectations concerning development and redevelopment activities, expectations on occupancy levels, expectations concerning the Vitruvian ParkSM development, expectations concerning the joint ventures with KFH and MetLife, expectations that automation will help grow net operating income, expectations on annualized net operating income and other risk factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time, including the Company’s Annual Report on Form 10-K and the Company’s Quarterly Reports on Form 10-Q. Actual results may differ materially from those described in the forward-looking statements. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release, and the Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in the Company’s expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required under the U.S. securities laws.
This release and these forward-looking statements include UDR’s analysis and conclusions and reflect UDR’s judgment as of the date of these materials. UDR assumes no obligation to revise or update to reflect future events or circumstances.
About UDR, Inc.
UDR, Inc. (NYSE: UDR), an S&P 400 company, is a leading multifamily real estate investment trust with a demonstrated performance history of delivering superior and dependable returns by successfully managing, buying, selling, developing and redeveloping attractive real estate properties in targeted U.S. markets. As of December 31, 2011, UDR owned or had an ownership position in 60,465 apartment homes including 2,626 homes under development. For over 39 years, UDR has delivered long-term value to shareholders, the best standard of service to residents, and the highest quality experience for associates. Additional information can be found on the Company’s website at www.udr.com.
http://tourism9.cm/ http://vkins.com/
UDR, Inc. (NYSE: UDR – News), a leading multifamily real estate investment trust, today announced its fourth quarter and full year 2011 results.
The Company generated Funds from Operations (FFO) of $80.2 million or $0.35 per diluted share for the quarter ended December 31, 2011, as compared to $53.4 million or $0.28 per diluted share in the fourth quarter of 2010. Excluding all one-time items, the Company’s fourth quarter 2011 FFO-Core would have been $0.34 per diluted share. See the reconciliation below for further detail.
For the twelve-months ended December 31, 2011, UDR generated FFO of $1.28 per diluted share as compared to $1.09 per diluted share for the twelve-months ended December 31, 2010. Excluding all one-time items, the Company’s 2011 FFO-Core would have been $1.28 per diluted share. See the reconciliation below for further detail.
| Q4 2011 | Q4 2010 | YTD 2011 | YTD 2010 | |||||||||||||
| FFO- Core per diluted share | $ | 0.34 | $ | 0.28 | $ | 1.28 | $ | 1.13 | ||||||||
| Acquisition-related costs | (0.006 | ) | (0.001 | ) | (0.028 | ) | (0.016 | ) | ||||||||
| JV financing and acquisition fee | 0.004 | 0.005 | 0.011 | 0.006 | ||||||||||||
| Restructuring charges | (0.001 | ) | (0.035 | ) | (0.006 | ) | (0.038 | ) | ||||||||
| Storm-related expenses | - | - | - | (0.004 | ) | |||||||||||
| Costs associated with debt extinguishment | (0.002 | ) | - | (0.021 | ) | (0.007 | ) | |||||||||
| Gain on sale of assets/marketable securities | 0.014 | - | 0.046 | - | ||||||||||||
| Other | - | 0.025 | - | 0.027 | ||||||||||||
| FFO- Reported per diluted share | $ | 0.35 | $ | 0.28 | $ | 1.28 | $ | 1.09 | ||||||||
A reconciliation of FFO to GAAP Net Income can be found on Attachment 2 of the Company’s fourth quarter Supplemental Financial Information.
Tom Toomey, UDR’s President and CEO stated, “We are pleased with the progress we made in further transitioning our portfolio in 2011, including $1.2 billion of acquisitions in New York City, a $500 million asset exchange that increased our presence in San Francisco and the Boston metro area, the expansion of our development and redevelopment pipeline by over $800 million and the disposition of $594 million of non-core assets. These transactions improved the Company’s portfolio by increasing our ownership interests in markets characterized by above-average job growth, low home affordability, below-average new supply risk and superior revenue growth and return prospects.” Mr. Toomey continued, “Driven by sound market fundamentals, a more advantageous geographic and asset mix and our robust operating and technology platforms, 2012 will be another strong year for UDR. As a result, the Board of Directors has approved a 10% increase in our annual common stock dividend to $0.88 per share for 2012.”
Operations
Same-store net operating income increased 7.7 percent year-over-year for the fourth quarter 2011 while same-store revenue increased 5.3 percent over the same period. Same-store physical occupancy decreased 40 basis points to 95.1 percent as compared to the prior year period. Same-store expenses increased 0.5 percent driven by an increase in utilities costs and real estate taxes. The rate of turnover increased to an annualized rate of 50 percent from 47 percent in the fourth quarter of 2010.
| Summary Same-Store Results Fourth Quarter 2011 versus Fourth Quarter 2010 | |||||||||||||||||
| Region | Revenue Growth/ Decline | Expense Growth/ Decline | NOI Growth/ Decline | % of Same- Store Portfolio¹ | Same-Store Occupancy2 | Number of Same-Store Homes3 | |||||||||||
| Western | 6.1 | % | -2.1 | % | 10.1 | % | 38.0 | % | 94.6 | % | 11,801 | ||||||
| Mid-Atlantic | 4.6 | % | 1.5 | % | 5.9 | % | 30.4 | % | 95.8 | % | 10,130 | ||||||
| Southeastern | 4.6 | % | 3.6 | % | 5.2 | % | 23.3 | % | 94.9 | % | 12,272 | ||||||
| Southwestern | 6.2 | % | -0.8 | % | 11.4 | % | 8.3 | % | 95.1 | % | 4,477 | ||||||
| Total | 5.3 | % | 0.5 | % | 7.7 | % | 100.0 | % | 95.1 | % | 38,680 | ||||||
| 1 Based on QTD 2011 NOI. | |||||||||||||||||
| 2 Average same-store occupancy for the quarter. | |||||||||||||||||
| 3 During the fourth quarter, 38,680 apartment homes, or approximately 82 percent of 47,343 total apartment homes, were classified as same-store. The Company defines same-store as all multifamily communities owned and stabilized for at least one year as of the beginning of the most recent quarter. | |||||||||||||||||
Sequentially, the Company’s same-store NOI increased by 2.3 percent driven by increased revenues of 0.2 percent and a 3.9 percent decrease in same-store expenses during the fourth quarter of 2011.
For the twelve-months ended December 31, 2011, the Company’s same-store revenue increased 4.1 percent as compared to the prior year while expenses increased 1.4 percent, resulting in a same-store NOI increase of 5.6 percent as compared to the prior year period. Year-over-year occupancy decreased by 20 basis points to 95.5 percent.
| Summary Same-Store Results YTD 2011 versus YTD 2010 | |||||||||||||||||
| Region | Revenue Growth/ Decline | Expense Growth/ Decline | NOI Growth/ Decline | % of Same- Store Portfolio¹ | Same-Store Occupancy2 | Number of Same-Store Homes3 | |||||||||||
| Western | 4.5 | % | 0.1 | % | 6.6 | % | 37.5 | % | 95.0 | % | 11,361 | ||||||
| Mid-Atlantic | 4.2 | % | 1.6 | % | 5.5 | % | 31.0 | % | 96.2 | % | 10,130 | ||||||
| Southeastern | 3.4 | % | 3.0 | % | 3.7 | % | 23.0 | % | 95.2 | % | 11,901 | ||||||
| Southwestern | 4.3 | % | 0.8 | % | 6.8 | % | 8.5 | % | 95.7 | % | 4,477 | ||||||
| Total | 4.1 | % | 1.4 | % | 5.6 | % | 100.0 | % | 95.5 | % | 37,869 | ||||||
| 1 Based on YTD NOI. | |||||||||||||||||
| 2 Average same-store occupancy for YTD 2011. | |||||||||||||||||
| 3 During 2011, 37,869 apartment homes, or approximately 80 percent of 47,343 total apartment homes, were classified as same-store. The Company defines same-store as all multifamily communities owned and stabilized for at least one year as of the beginning of the most recent year. | |||||||||||||||||
Technology Platform
Improving the Company’s operational efficiency, while increasing resident satisfaction, are the compelling factors for our continued investment in technology. The Company’s technology platform has gained acceptance and recognition from our residents as shown by the following utilization rates:
| Established Technology Initiatives: | December 2011 | December 2010 | ||||
| Resident payments received via ACH | 77 | % | 79 | % | ||
| Service requests entered through MyUDR.com | 79 | % | 79 | % | ||
| Move-ins initiated via an internet source | 57 | % | 62 | % | ||
| Renewals completed electronically | 86 | % | 81 | % | ||
Development and Redevelopment Activity
As previously announced during the fourth quarter of 2011, the Company acquired land for its Village at Bella Terra development project in Huntington Beach, CA. The newly started community is projected to include 467 homes, cost $150 million and be completed in the second quarter of 2013.
In addition, the Company acquired a land parcel adjacent to its Vitruvian ParkSM development in Addison, TX for $4.7 million and a land parcel adjacent to its Garrison Square community in the Boston metro area for $4.6 million.
Joint Venture Investment Activity
As previously announced on December 21, 2011, the Company and its joint venture partner Kuwait Finance House (“KFH”) acquired 1301 Thomas Circle in Washington, D.C. for $153.8 million. The 292-home apartment community is located in the Logan Circle neighborhood near the 14th Street Corridor, is within minutes of the Mt. Vernon Square and McPherson Metro Stations and is near UDR’s wholly-owned Andover House community. The 10-story community was completed in 2006, is well-amenitized, has a 256-space parking garage and had an average monthly income per occupied home of $2,740 at the time of acquisition. Additional details related to the transaction can be found in the December 21, 2011 press release on the Company’s website at www.udr.com.
Following the purchase of 1301 Thomas Circle, there remained approximately $169 million of investment capacity under the terms of the joint venture agreement.
Disposition Activity
During the fourth quarter of 2011, the Company sold nine communities containing 2,331 homes for $275.4 million in total gross proceeds, bringing full-year 2011 asset dispositions to $593.9 million. At the time of the fourth quarter dispositions, total income per occupied home for the communities sold averaged $1,065 per month. The fourth quarter dispositions were located in a variety of markets including the Eastern Shore of Maryland, Raleigh, the East Bay area of San Francisco, the Inland Empire, San Diego, Houston and San Antonio.
Capital Markets Activity
During the fourth quarter of 2011, the Company completed a number of debt related activities aimed at managing its near term maturities and capital costs.
As previously announced, on October 25, 2011, the Company entered into a new $900 million unsecured revolving credit facility, replacing its prior $600 million facility. The new facility has an initial term of four years, includes a one-year extension option and contains an accordion feature that allows the Company to increase the facility to $1.35 billion.
Based on the Company’s credit ratings at the time of closing, the credit facility carried an interest rate equal to LIBOR plus a spread of 122.5 basis points and a facility fee of 22.5 basis points.
Coinciding with the closing of the new revolving credit facility, the Company amended and re-priced its $250 million unsecured term loan due in January 2016. The term loan was re-priced to LIBOR plus 142.5 basis points from LIBOR plus 200 basis points and its underlying covenants were aligned with those of UDR’s new revolving credit facility. Additional details related to these debt activities can be found in the October 25, 2011 press release on the Company’s website at www.udr.com.
In addition, the Company prepaid a $100.0 million secured mortgage at par in November. The mortgage had an interest rate of 6.78 percent and was originally due in May of 2012.
In the fourth quarter of 2011, the Company raised $15.5 million of equity through the sale of approximately 630 thousand shares at a weighted average net price of $24.67 per share under its “At the Market” equity offering program. In 2011, the Company raised a total of $989 million of equity from a combination of “At the Market” proceeds, a secondary offering completed in July and the issuance of operating partnership units.
Balance Sheet
At December 31, 2011, UDR had $738.7 million in availability through a combination of cash and undrawn capacity on its credit facilities. Potential sources of additional capital include the Company’s $5.0 billion of unencumbered assets (on a historical non-depreciated cost basis), 7.4 million shares available for issuance under its “At the Market” equity offering program in addition to $400 to $600 million in expected dispositions in 2012.
UDR’s total indebtedness at December 31, 2011 was $3.9 billion. The Company ended the fourth quarter with fixed-rate debt representing 73 percent of its total debt, a total blended interest rate of 4.0 percent and a weighted average maturity of 4.4 years. UDR’s fixed charge coverage ratio (adjusted for non-recurring items) was 2.6 times at year-end 2011 versus 2.3 times a year ago.
Post Quarter Activity
Joint Venture Investment Activity
On January 12, 2012, UDR formed a second real estate joint venture with MetLife (UDR/MetLife II) wherein each party owns a 50 percent interest in a $1.3 billion portfolio of 12 operating communities containing 2,528 apartment homes.
The 12 operating communities in the joint venture include seven communities from the Company’s first real estate joint venture with MetLife (UDR/MetLife I) formed on November 8, 2010, while the remaining five communities were newly acquired by UDR/MetLife II. The newly acquired communities, collectively known as Columbus Square, are recently developed, high-rise apartment buildings located on the Upper West Side of Manhattan and were purchased for $630 million. Additional details related to the transaction can be found in the January 12, 2012 press release on the Company’s website at www.udr.com.
With the closing of UDR/MetLife II, the original joint venture between the parties, UDR/MetLife I, now comprises 19 operating communities containing 3,930 homes as well as 10 vacant land parcels. Historical cost of the venture is $1.8 billion and the Company’s weighted average ownership interest in the UDR/MetLife I operating communities is now 12.6 percent and 4.0 percent for the land parcels in the venture.
Capital Markets Activity
On January 5, 2012, the Company priced a ten-year, $400 million offering of 4.625 percent senior unsecured notes under its existing shelf registration. The notes will mature on January 10, 2022. This offering fulfills the Company’s full-year 2012 guidance for $400 million in new debt issuances. A portion of this offering was used to repay $100 million of 5 percent unsecured debt originally due in January 2012. Additional details related to the transaction can be found in the January 5, 2012 press release on the Company’s website at www.udr.com.
In addition, the Company prepaid a $30.6 million mortgage at par in January 2012 that was secured by its 21 Chelsea community in Manhattan.
In January 2012, the Company raised $29.1 million of equity through the sale of approximately 1.2 million shares at a weighted average net price of $24.68 per share under its “At the Market” equity offering program.
| 2012 Guidance | ||||||
| Full year 2012 guidance is as follows: | ||||||
| Range | ||||||
| FFO per diluted share | $1.37 to $1.43 | |||||
| Dividend per share | $0.88 | |||||
| Same-Store Metrics: | Range | |||||
| Number of homes | 38,680 | |||||
| Revenue growth | 5.0% to 6.0% | |||||
| Expense growth | 3.0% to 3.5% | |||||
| Net operating income growth | 6.0% to 7.5% | |||||
| G&A expenses ($M) | $32 to $34 | |||||
| Recurring capital expenditures | $1,150/stabilized home | |||||
| Stabilized homes | 47,545 | |||||
| Transactional Activity ($M): | Range | Completed(1) | ||||
| Acquisitions | Market dependent | |||||
| Dispositions | $400 to $600 | |||||
| Development spend | $400 | |||||
| Redevelopment spend | $100 | |||||
| Join venture investments, net | $290 | $290 | ||||
| Financing Activity ($M): | Range | Completed(1) | ||||
| Equity | Market dependent | $29 | ||||
| Debt | $400 | $400 | ||||
| (1) As of February 6, 2012 | ||||||
| FFO Per Share GAAP Reconciliation | ||||||
| All guidance is based on current expectations of future economic conditions and the judgment of the Company’s management team. The following is a reconciliation from forecasted FFO per share to GAAP net loss per share: | ||||||
| Low | High | |||||
| Forecasted 2012 FFO Guidance per Diluted Share | $1.37 | $1.43 | ||||
| Conversion to GAAP Share Count | (0.09) | (0.09) | ||||
| Depreciation | (1.78) | (1.78) | ||||
| Non-Controlling Interests | 0.01 | 0.01 | ||||
| Preferred Dividends | (0.02) | (0.02) | ||||
| Forecasted 2012 GAAP Net Loss per Diluted Share | ($0.51) | ($0.45) | ||||
Supplemental Information
The Company offers Supplemental Financial Information that provides details on the financial position and operating results of the Company which is available on the Company’s website at www.udr.com.
Conference Call and Webcast Information
UDR will host a webcast and conference call at 11:00 a.m. EST on February 6, 2012 to discuss fourth quarter results. A webcast will be available on UDR’s website at www.udr.com. To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.
To participate in the teleconference dial 800-762-8779 for domestic and 480-629-9771 for international and provide the following conference ID number: 4501829.
A replay of the conference call will be available through February 20, 2012, by dialing 800-406-7325 for domestic and 303-590-3030 for international and entering the confirmation number, 4501829, when prompted for the pass code.
A replay of the call will be available for 90 days on UDR’s website at www.udr.com.
Full Text of the Earnings Report and Supplemental Data
Internet — The full text of the earnings report and Supplemental Financial Information will be available on the Company’s website at www.udr.com.
Mail — For those without Internet access, the fourth quarter 2011 earnings report and Supplemental Financial Information will be available by mail or fax, on request. To receive a copy, please call UDR Investor Relations at 720-348-7762.
Forward Looking Statements
Certain statements made in this press release may constitute “forward-looking statements.” Words such as “expects,” “intends,” “believes,” “anticipates,” “plans,” “likely,” “will,” “seeks,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement, due to a number of factors, which include, but are not limited to, unfavorable changes in the apartment market, changing economic conditions, the impact of inflation/deflation on rental rates and property operating expenses, expectations concerning availability of capital and the stabilization of the capital markets, the impact of competition and competitive pricing, acquisitions, developments and redevelopments not achieving anticipated results, delays in completing developments, redevelopments and lease-ups on schedule, expectations on job growth, home affordability and demand/supply ratio for multifamily housing, expectations concerning development and redevelopment activities, expectations on occupancy levels, expectations concerning the Vitruvian ParkSM development, expectations concerning the joint ventures with KFH and MetLife, expectations that automation will help grow net operating income, expectations on annualized net operating income and other risk factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time, including the Company’s Annual Report on Form 10-K and the Company’s Quarterly Reports on Form 10-Q. Actual results may differ materially from those described in the forward-looking statements. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release, and the Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in the Company’s expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required under the U.S. securities laws.
This release and these forward-looking statements include UDR’s analysis and conclusions and reflect UDR’s judgment as of the date of these materials. UDR assumes no obligation to revise or update to reflect future events or circumstances.
About UDR, Inc.
UDR, Inc. (NYSE: UDR), an S&P 400 company, is a leading multifamily real estate investment trust with a demonstrated performance history of delivering superior and dependable returns by successfully managing, buying, selling, developing and redeveloping attractive real estate properties in targeted U.S. markets. As of December 31, 2011, UDR owned or had an ownership position in 60,465 apartment homes including 2,626 homes under development. For over 39 years, UDR has delivered long-term value to shareholders, the best standard of service to residents, and the highest quality experience for associates. Additional information can be found on the Company’s website at www.udr.com.
| Attachment 1 | ||||||||
| UDR, Inc. | ||||||||
| Consolidated Statements of Operations | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | Twelve Months Ended | |||||||
| December 31, | December 31, | |||||||
| In thousands, except per share amounts | 2011 | 2010 | 2011 | 2010 | ||||
| Rental income | $ 187,999 | $ 152,396 | $ 691,263 | $ 574,084 | ||||
| Rental expenses: | ||||||||
| Real estate taxes and insurance | 22,776 | 18,376 | 84,007 | 70,762 | ||||
| Personnel | 15,076 | 13,445 | 56,617 | 51,696 | ||||
| Utilities | 10,248 | 7,946 | 37,405 | 31,564 | ||||
| Repair and maintenance | 9,843 | 8,571 | 37,155 | 32,386 | ||||
| Administrative and marketing | 4,227 | 3,964 | 15,411 | 14,643 | ||||
| Property management | 5,169 | 4,191 | 19,009 | 15,788 | ||||
| Other operating expenses | 1,580 | 1,465 | 5,990 | 5,773 | ||||
| 68,919 | 57,958 | 255,594 | 222,612 | |||||
| Non-property income: | ||||||||
| Loss from unconsolidated entities | (2,092) | (1,447) | (6,352) | (4,204) | ||||
| Gain on sale of investments | 1,396 | 4,725 | 7,069 | 4,725 | ||||
| Interest and other income (1) | 3,406 | 2,049 | 10,353 | 7,777 | ||||
| 2,710 | 5,327 | 11,070 | 8,298 | |||||
| Other expenses: | ||||||||
| Real estate depreciation and amortization | 97,975 | 74,842 | 356,011 | 275,615 | ||||
| Interest | 39,030 | 35,432 | 151,144 | 140,869 | ||||
| Amortization of convertible debt premium | - | 776 | 1,077 | 1,204 | ||||
| Other debt charges (2) | 550 | 83 | 4,602 | 3,530 | ||||
| Total interest | 39,580 | 36,291 | 156,823 | 145,603 | ||||
| Acquisition-related costs | 57 | 186 | 4,828 | 2,865 | ||||
| Severance charges | 317 | 6,803 | 1,342 | 6,803 | ||||
| General and administrative | 5,747 | 10,597 | 35,440 | 39,845 | ||||
| Other depreciation and amortization | 919 | 1,088 | 3,931 | 4,843 | ||||
| 144,595 | 129,807 | 558,375 | 475,574 | |||||
| Loss from continuing operations | (22,805) | (30,042) | (111,636) | (115,804) | ||||
| Income from discontinued operations | 70,923 | 725 | 132,221 | 9,216 | ||||
| Consolidated net income/(loss) | 48,118 | (29,317) | 20,585 | (106,588) | ||||
| Net (income)/loss attributable to non-controlling interests | (1,620) | 861 | (562) | 3,689 | ||||
| Net income/(loss) attributable to UDR, Inc. | 46,498 | (28,456) | 20,023 | (102,899) | ||||
| Distributions to preferred stockholders – Series E (Convertible) | (931) | (932) | (3,724) | (3,726) | ||||
| Distributions to preferred stockholders – Series G | (1,377) | (1,437) | (5,587) | (5,762) | ||||
| (Premium)/discount on preferred stock repurchases, net | - | - | (175) | 25 | ||||
| Net income/(loss) attributable to common stockholders | $ 44,190 | $ (30,825) | $ 10,537 | $ (112,362) | ||||
| Earnings/(loss) per weighted average common share – basic and diluted: | ||||||||
| Loss from continuing operations available to common stockholders | ($0.12) | ($0.17) | ($0.60) | ($0.73) | ||||
| Income from discontinued operations | $0.33 | $0.00 | $0.66 | $0.06 | ||||
| Net Income/(loss) attributable to common stockholders | $0.20 | ($0.17) | $0.05 | ($0.68) | ||||
| Common distributions declared per share | $0.2150 | $0.185 | $0.800 | $0.730 | ||||
| Weighted average number of common shares outstanding – basic and diluted | 217,823 | 180,743 | 201,294 | 165,857 | ||||
| (1) Includes $3.2 million and $1.7 million of management fees from joint ventures during the three months ended December 31, 2011 and 2010 and $9.6 million and $3.2 million during the twelve months ended December 31, 2011 and 2010. | ||||||||
| (2) Write-off of deferred financing costs on early debt extinguishment, including $0 and $599 write-off of convertible debt premium for the three and twelve months ended December 31, 2010. | ||||||||
| Attachment 2 | ||||||||
| UDR, Inc. | ||||||||
| Funds From Operations | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | Twelve Months Ended | |||||||
| December 31, | December 31, | |||||||
| In thousands, except per share amounts | 2011 | 2010 | 2011 | 2010 | ||||
| Net income/(loss) attributable to UDR, Inc. | $ 46,498 | $ (28,456) | $ 20,023 | $ (102,899) | ||||
| Distributions to preferred stockholders | (2,308) | (2,369) | (9,311) | (9,488) | ||||
| Real estate depreciation and amortization, including discontinued operations | 98,513 | 81,922 | 370,343 | 303,446 | ||||
| Non-controlling interests | 1,620 | (861) | 562 | (3,689) | ||||
| Real estate depreciation and amortization on unconsolidated joint ventures | 2,983 | 2,323 | 11,631 | 5,698 | ||||
| Net gain on the sale of depreciable property in discontinued operations, excluding RE3 | (68,045) | (49) | (123,217) | (4,048) | ||||
| (Premium)/discount on preferred stock repurchases, net | - | - | (175) | 25 | ||||
| Funds from operations (“FFO”) – basic | $ 79,261 | $ 52,510 | $ 269,856 | $ 189,045 | ||||
| Distribution to preferred stockholders – Series E (Convertible) | 931 | 932 | 3,724 | 3,726 | ||||
| Funds from operations – diluted | $ 80,192 | $ 53,442 | $ 273,580 | $ 192,771 | ||||
| FFO per common share – basic | $ 0.35 | $ 0.28 | $ 1.29 | $ 1.10 | ||||
| FFO per common share – diluted | $ 0.35 | $ 0.28 | $ 1.28 | $ 1.09 | ||||
| Weighted average number of common shares and OP Units outstanding – basic | 227,248 | 186,041 | 208,896 | 171,569 | ||||
| Weighted average number of common shares, OP Units, and common stock equivalents outstanding – diluted | 232,405 | 191,651 | 214,086 | 176,900 | ||||
| FFO is defined as net income (computed in accordance with GAAP), excluding impairment write-downs of depreciable real estate or of investments in non-consolidated investees that are driven by measurable decreases in the fair value of depreciable real estate held by the investee, gains (or losses) from sales of depreciable property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. This definition conforms with the National Association of Real Estate Investment Trust’s definition issued in April 2002. UDR considers FFO in evaluating property acquisitions and its operating performance and believes that FFO should be considered along with, but not as an alternative to, net income and cash flows as a measure of UDR’s activities in accordance with generally accepted accounting principles and is not necessarily indicative of cash available to fund cash needs. | ||||||||
| RE3 gain on sales, net of taxes, is defined as net sales proceeds less a tax provision and the gross investment basis of the asset before accumulated depreciation. We consider FFO with RE3 gain on sales, net of taxes, to be a meaningful supplemental measure of performance because the short-term use of funds produce profits which differ from the traditional long-term investment in real estate for REITs. | ||||||||
| Attachment 3 | ||||||||
| UDR, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| December 31, | December 31, | |||||||
| In thousands, except share and per share amounts | 2011 | 2010 | ||||||
| (unaudited) | (audited) | |||||||
| ASSETS | ||||||||
| Real estate owned: | ||||||||
| Real estate held for investment | $ | 7,825,725 | $ | 6,198,667 | ||||
| Less: accumulated depreciation | (1,831,157 | ) | (1,505,626 | ) | ||||
| 5,994,568 | 4,693,041 | |||||||
| Real estate under development | ||||||||
| (net of accumulated depreciation of $570 and $0) | 248,176 | 97,912 | ||||||
| Real estate held for disposition | ||||||||
| (net of accumulated depreciation of $0 and $132,700) | - | 452,068 | ||||||
| Total real estate owned, net of accumulated depreciation | 6,242,744 | 5,243,021 | ||||||
| Cash and cash equivalents | 12,503 | 9,486 | ||||||
| Marketable securities | - | 3,866 | ||||||
| Restricted cash | 24,634 | 15,447 | ||||||
| Deferred financing costs, net | 30,068 | 27,267 | ||||||
| Notes receivable | - | 7,800 | ||||||
| Investment in unconsolidated joint ventures | 213,040 | 148,057 | ||||||
| Other assets | 198,365 | 74,596 | ||||||
| Total assets | $ | 6,721,354 | $ | 5,529,540 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Secured debt | $ | 1,891,553 | $ | 1,808,746 | ||||
| Secured debt – real estate held for disposition | - | 154,924 | ||||||
| Unsecured debt | 2,026,817 | 1,603,834 | ||||||
| Real estate taxes payable | 13,397 | 14,585 | ||||||
| Accrued interest payable | 23,208 | 20,889 | ||||||
| Security deposits and prepaid rent | 35,516 | 26,046 | ||||||
| Distributions payable | 51,019 | 36,561 | ||||||
| Deferred fees and gains on the sale of depreciable property | 29,100 | 28,943 | ||||||
| Accounts payable, accrued expenses, and other liabilities | 95,485 | 105,925 | ||||||
| Total liabilities | 4,166,095 | 3,800,453 | ||||||
| Redeemable non-controlling interests in operating partnership | 236,475 | 119,057 | ||||||
| Stockholders’ equity | ||||||||
| Preferred stock, no par value; 50,000,000 shares authorized | ||||||||
| 2,803,812 shares of 8.00% Series E Cumulative Convertible issued and outstanding (2,803,812 shares at December 31, 2010) | 46,571 | 46,571 | ||||||
| 3,264,362 shares of 6.75% Series G Cumulative Redeemable issued and outstanding (3,405,562 shares at December 31, 2010) | 81,609 | 85,139 | ||||||
| Common stock, $0.01 par value; 250,000,000 shares authorized | ||||||||
| 219,650,225 shares issued and outstanding (182,496,330 shares at December 31, 2010) | 2,197 | 1,825 | ||||||
| Additional paid-in capital | 3,340,470 | 2,450,141 | ||||||
| Distributions in excess of net income | (1,142,895 | ) | (973,864 | ) | ||||
| Accumulated other comprehensive loss, net | (13,902 | ) | (3,469 | ) | ||||
| Total stockholders’ equity | 2,314,050 | 1,606,343 | ||||||
| Non-controlling interest | 4,734 | 3,687 | ||||||
| Total equity | 2,318,784 | 1,610,030 | ||||||
| Total liabilities and stockholders’ equity | $ | 6,721,354 | $ | 5,529,540 | ||||
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2012年2月1日星期三
Social Networks: Not a Good Place for Financial Tips – Finance News
Wednesday, February 1, 2012
Bangalore: Advice from your financial experts or an online free investment message in your social network – which one would like to go for? Well the answer is obviously ‘No’, as you pay your financial expert for advising you, which is more dependable.
But there’s two recent studies done on whether these online tips and services about your financial decisions are beneficial for you or they are risky to opt. Both the study reached to a single conclusion that these online financial informations as risky as well as hard to pick up. Investors and traders should be very careful about the source while receiving the tips.
Now a day there are many websites like tradeking.com, didyouinvest.com and firsttrade.com which sells investing ideas, share stock tips and provides buying selling strategies. There are increasing numbers of consumers searching for financial advice in online communities but there is very little fact known about how participation in such sites effects their decision making process of their financial wealth. Bad investment always takes place but going through these online tips completely leads you to a critical risk of economic thrashing.
In the study conducted by Rice University of Houston, University of British Columbia, and University of Zurich, which was called “Does Online Community Participation Foster Risky Financial Behavior?”, one result revealed that participation in an online community leads consumers to seek out support from other members that is they believe they will be helped by other community members. This perception guides them to make unwise, foolish and reckless financial decisions than non-participants which ultimately deceives them and leads them to a critical situation. They observed the financial decisions of eBay and prosper.com users and concluded that this online community participation for seeking financial decisions leads to a greater threat. It is seen that non-participants remained safe while the participants lent their own money to riskier borrowers to a greater extent.
Yaniv Altshuler, who has been keenly studying the social networking trading site, eToro.com for the past one year, says, “There is good information and there is junk information (in the internet). The key is figuring out how to predict what kinds of networks allow the junk information to be filtered out”. Altshuler is a post-doctoral associate at MIT’s Human Dynamics Group and he shows the flip side of the fact by saying that “risky online behavior isn’t necessarily bad for a trader’s bottom line.
2012年1月27日星期五
The Morgan Group Arranges $146 Million in Financing for Multifamily Projects
HOUSTON–(BUSINESS WIRE)– The Morgan Group, a leader in upscale multifamily development, construction and property management, has arranged financing of $146 million on behalf of its affiliated investment partnerships. The proceeds were obtained from bank, agency and insurance company loans with terms ranging from five to ten years, collateralized by five apartment properties in Texas, Florida and North Carolina.
These properties include: 2222 Smith Apartments and 33Thirty-Three Weslayan Apartments in Houston, financed by BBVA Compass Bank and Northwestern Mutual Life; The Village at Lake Lily in Maitland, Florida, and Arelia James Island Apartments, in Jacksonville, Florida, which were financed by FNMA and Metropolitan Life; and Spectrum South End Apartments in Charlotte, North Carolina, financed by New York Life.
“Current loan rates for multifamily projects were extremely attractive,” said Chairman and CEO Mike Morgan. “It appeared to be a good time to lock in terms for stable, core assets. The five apartment properties we refinanced represent more than 1,700 units in our portfolio.”
About The Morgan Group, Inc.
The Morgan Group, Inc. is a privately held national developer of Class A multifamily properties with headquarters in Houston, Texas. Founded in 1959, Morgan also specializes in upscale urban construction and property management. Since 1988, The Morgan Group has developed more than 15,000 units at a cost of more than $1.5 billion. More than 1,000 units are in the planning or construction stages in Texas and Florida. For more information, visit http://www.morgangroup.com/.
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These properties include: 2222 Smith Apartments and 33Thirty-Three Weslayan Apartments in Houston, financed by BBVA Compass Bank and Northwestern Mutual Life; The Village at Lake Lily in Maitland, Florida, and Arelia James Island Apartments, in Jacksonville, Florida, which were financed by FNMA and Metropolitan Life; and Spectrum South End Apartments in Charlotte, North Carolina, financed by New York Life.
“Current loan rates for multifamily projects were extremely attractive,” said Chairman and CEO Mike Morgan. “It appeared to be a good time to lock in terms for stable, core assets. The five apartment properties we refinanced represent more than 1,700 units in our portfolio.”
About The Morgan Group, Inc.
The Morgan Group, Inc. is a privately held national developer of Class A multifamily properties with headquarters in Houston, Texas. Founded in 1959, Morgan also specializes in upscale urban construction and property management. Since 1988, The Morgan Group has developed more than 15,000 units at a cost of more than $1.5 billion. More than 1,000 units are in the planning or construction stages in Texas and Florida. For more information, visit http://www.morgangroup.com/.
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2012年1月19日星期四
The Motley Fool financial advice
ASK THE FOOL
Explaining the prime number
Q: What’s the prime rate? – T.W., Norwich, Conn.
A: It’s the interest rate that banks charge their best (lowest-risk) commercial customers. It matters because many other interest rates, such as those for mortgages, home equity loans, credit cards and other business loans, take their lead from the prime rate. A car loan rate, for example, might be calculated by taking the current prime rate and adding a certain amount to it.
The prime rate doesn’t change every day. It stays put for a while until major banks change their rates, generally moving in step with economic conditions. (That often happens when the Federal Reserve changes its discount rate, which is what it charges banks that borrow short-term money.)
There actually isn’t a single prime rate. Each bank may set its own, but the major commercial banks tend to use the same one most of the time. You’ll find the prime rate in most newspapers’ business sections.
Who’s in charge here, anyway?
Q: How can I find out who’s on a company’s board of directors? – N.B., Ashland, Ky.
A: You’ll frequently find a list of a company’s board members on its website. Look for links labeled something like “Company Information,” “About Us,” “Investor Relations” or “Corporate Governance.” You can also just call the investor relations department and ask.
Most annual reports list the members of the board, often with a glossy color photo. Another option is to check out the reports that the company files with the Securities and Exchange Commission (SEC). The annual 10-K report is your best bet, and you can get it by entering the company’s name or ticker symbol at http://finance.yahoo.com. It’s a long and informative document.
Foolish Trivia
Name that company
Founded in 1865 and based in Minneapolis, I started as an Iowa grain storage warehouse. Today I’m a global giant in food, agricultural, financial and industrial products and services. My offerings include grains, oilseeds, sugar, meats, salt, cotton and animal nutrition products. I’m versatile. With corn alone, I’ve traded it, processed it into ethanol and fructose, and created renewable products such as plastics and fiber from it. I employ roughly 140,000 people and rake in about $120 billion annually. You can’t buy stock in me, because I’m a privately held company – America’s largest one, in fact. Who am I?
Last week’s answer: Gannett
THE TAKE
AT&T in 2012
The proposed $39 billion merger between AT&T (NYSE: T) and Deutsche Telekom’s T-Mobile USA is history, but AT&T’s future still holds promise.
AT&T had hoped to increase the number of its radio frequency licenses with the merger. Instead, as part of a breakup fee in the agreement, AT&T will have to fork over $3 billion worth of spectrum and roaming agreements to T-Mobile, along with $3 billion in cash.
So job No. 1 for AT&T in the new year will be to gain additional spectrum just to tread water. It’s waiting for the FCC to OK its deal to buy $1.9 billion worth of spectrum from Qualcomm.
The biggest reason AT&T is going to need as much spectrum as it can get is to catch up to Verizon in the race to smother the country with 4G LTE coverage. Verizon seems to have quite a head start in that regard. Its LTE network covers 179 cities across the country, vs. just 15 cities for AT&T.
The coming year is definitely going to be challenging for AT&T, but it’s certainly not in dire straits. The company just upped its quarterly dividend for the 28th year in a row.
Think twice before selling off your AT&T shares in a panic. That 6 percent dividend yield can be quite effective as an anti-anxiety pill. (The Motley Fool owns shares of Qualcomm.)
Write to us. Send questions for Ask the Fool and your trivia entries to: The Motley Fool c/o Houston Chronicle P.O. Box 4260 Houston, TX 77210 Universal Press Syndicate
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Explaining the prime number
Q: What’s the prime rate? – T.W., Norwich, Conn.
A: It’s the interest rate that banks charge their best (lowest-risk) commercial customers. It matters because many other interest rates, such as those for mortgages, home equity loans, credit cards and other business loans, take their lead from the prime rate. A car loan rate, for example, might be calculated by taking the current prime rate and adding a certain amount to it.
The prime rate doesn’t change every day. It stays put for a while until major banks change their rates, generally moving in step with economic conditions. (That often happens when the Federal Reserve changes its discount rate, which is what it charges banks that borrow short-term money.)
There actually isn’t a single prime rate. Each bank may set its own, but the major commercial banks tend to use the same one most of the time. You’ll find the prime rate in most newspapers’ business sections.
Who’s in charge here, anyway?
Q: How can I find out who’s on a company’s board of directors? – N.B., Ashland, Ky.
A: You’ll frequently find a list of a company’s board members on its website. Look for links labeled something like “Company Information,” “About Us,” “Investor Relations” or “Corporate Governance.” You can also just call the investor relations department and ask.
Most annual reports list the members of the board, often with a glossy color photo. Another option is to check out the reports that the company files with the Securities and Exchange Commission (SEC). The annual 10-K report is your best bet, and you can get it by entering the company’s name or ticker symbol at http://finance.yahoo.com. It’s a long and informative document.
Foolish Trivia
Name that company
Founded in 1865 and based in Minneapolis, I started as an Iowa grain storage warehouse. Today I’m a global giant in food, agricultural, financial and industrial products and services. My offerings include grains, oilseeds, sugar, meats, salt, cotton and animal nutrition products. I’m versatile. With corn alone, I’ve traded it, processed it into ethanol and fructose, and created renewable products such as plastics and fiber from it. I employ roughly 140,000 people and rake in about $120 billion annually. You can’t buy stock in me, because I’m a privately held company – America’s largest one, in fact. Who am I?
Last week’s answer: Gannett
THE TAKE
AT&T in 2012
The proposed $39 billion merger between AT&T (NYSE: T) and Deutsche Telekom’s T-Mobile USA is history, but AT&T’s future still holds promise.
AT&T had hoped to increase the number of its radio frequency licenses with the merger. Instead, as part of a breakup fee in the agreement, AT&T will have to fork over $3 billion worth of spectrum and roaming agreements to T-Mobile, along with $3 billion in cash.
So job No. 1 for AT&T in the new year will be to gain additional spectrum just to tread water. It’s waiting for the FCC to OK its deal to buy $1.9 billion worth of spectrum from Qualcomm.
The biggest reason AT&T is going to need as much spectrum as it can get is to catch up to Verizon in the race to smother the country with 4G LTE coverage. Verizon seems to have quite a head start in that regard. Its LTE network covers 179 cities across the country, vs. just 15 cities for AT&T.
The coming year is definitely going to be challenging for AT&T, but it’s certainly not in dire straits. The company just upped its quarterly dividend for the 28th year in a row.
Think twice before selling off your AT&T shares in a panic. That 6 percent dividend yield can be quite effective as an anti-anxiety pill. (The Motley Fool owns shares of Qualcomm.)
Write to us. Send questions for Ask the Fool and your trivia entries to: The Motley Fool c/o Houston Chronicle P.O. Box 4260 Houston, TX 77210 Universal Press Syndicate
http://tourism9.com/ http://vkins.com/
2012年1月2日星期一
The Sterling Group Acquires Liqui-Box From DuPont
HOUSTON , Dec. 30, 2011 /PRNewswire/ — The Sterling Group (” Sterling “), a Houston based private equity investment firm, today announced that its affiliated investment fund, Sterling Group Partners III, L.P., has completed the acquisition of the Liqui-Box Corporation (“Liqui-Box”) from DuPont. The acquisition is Sterling ‘s third investment in its third fund, an $820 million fund raised in 2010. Liqui-Box is the twenty-first corporate carve-out in Sterling ‘s thirty year history and the fourth business Sterling has acquired from DuPont.
(Logo: http://photos.prnewswire.com/prnh/20110802/DA46065LOGO)
Headquartered in Worthington, Ohio , Liqui-Box is a leading supplier of bag-in-box flexible packaging to the global dairy, beverage and bulk food markets. Bag-in-box packaging is primarily used in the foodservice industry to package dairy mix for milkshakes and coffee drinks, fountain beverage syrup and pumpable liquid foods such as food concentrates and sauces. Liqui-Box also produces pouches and rigid plastic water bottles. The company’s product offering includes consumables, such as fitmented bags and pouch films, as well as filling machines.
“The entire Liqui-Box team is energized to partner with Sterling who has a proven track record of successfully transitioning unique, specialty businesses like ours to more nimble, stand alone companies and equipping them for future growth. We look forward to executing on a number of initiatives to expand our business and enhance our delivery of top quality products to our customers,” said Roszann Graham, CEO of Liqui-Box.
Greg Elliott , a Partner of Sterling noted, “Roszann and her team have done an exceptional job positioning Liqui-Box as a leading provider of bag-in-box packaging solutions. Over the past several years, Liqui-Box has streamlined its operations to focus on its core products. Our focus now is to expand our global footprint, invest in technology and expand our offering of solutions to our customers.”
The acquisition was financed with equity from Sterling Group Partners III, L.P. Senior debt financing was provided by BNP Paribas and BMO, and mezzanine debt was provided by Oaktree Capital Management.
About The Sterling Group, L.P.
Founded in 1982, The Sterling Group is a private equity investment firm that targets controlling interests in basic manufacturing, distribution and industrial services companies. Typical enterprise values of these companies range from $100 million to $500 million . Sterling has sponsored the buyout of 41 platform companies and numerous add-on acquisitions for a total transaction value of approximately $9.5 billion . Currently, Sterling has $1.3 billion of committed capital under management through three funds. Current portfolio companies include North American Energy Partners, CST Industries, Roofing Supply Group, Universal Fiber Systems, Velcon Filters, Express, B&G Crane, Saxco International and Stackpole International. The Sterling Group has a proven track record with corporate carve-outs, as over half of its transactions over the last thirty years have been the purchases of businesses from large corporations.
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(Logo: http://photos.prnewswire.com/prnh/20110802/DA46065LOGO)
Headquartered in Worthington, Ohio , Liqui-Box is a leading supplier of bag-in-box flexible packaging to the global dairy, beverage and bulk food markets. Bag-in-box packaging is primarily used in the foodservice industry to package dairy mix for milkshakes and coffee drinks, fountain beverage syrup and pumpable liquid foods such as food concentrates and sauces. Liqui-Box also produces pouches and rigid plastic water bottles. The company’s product offering includes consumables, such as fitmented bags and pouch films, as well as filling machines.
“The entire Liqui-Box team is energized to partner with Sterling who has a proven track record of successfully transitioning unique, specialty businesses like ours to more nimble, stand alone companies and equipping them for future growth. We look forward to executing on a number of initiatives to expand our business and enhance our delivery of top quality products to our customers,” said Roszann Graham, CEO of Liqui-Box.
Greg Elliott , a Partner of Sterling noted, “Roszann and her team have done an exceptional job positioning Liqui-Box as a leading provider of bag-in-box packaging solutions. Over the past several years, Liqui-Box has streamlined its operations to focus on its core products. Our focus now is to expand our global footprint, invest in technology and expand our offering of solutions to our customers.”
The acquisition was financed with equity from Sterling Group Partners III, L.P. Senior debt financing was provided by BNP Paribas and BMO, and mezzanine debt was provided by Oaktree Capital Management.
About The Sterling Group, L.P.
Founded in 1982, The Sterling Group is a private equity investment firm that targets controlling interests in basic manufacturing, distribution and industrial services companies. Typical enterprise values of these companies range from $100 million to $500 million . Sterling has sponsored the buyout of 41 platform companies and numerous add-on acquisitions for a total transaction value of approximately $9.5 billion . Currently, Sterling has $1.3 billion of committed capital under management through three funds. Current portfolio companies include North American Energy Partners, CST Industries, Roofing Supply Group, Universal Fiber Systems, Velcon Filters, Express, B&G Crane, Saxco International and Stackpole International. The Sterling Group has a proven track record with corporate carve-outs, as over half of its transactions over the last thirty years have been the purchases of businesses from large corporations.
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Synthesis Energy Systems Provides Progress Update on Strategic Equity Investment and Collaboration in China
HOUSTON , Dec. 30, 2011 /PRNewswire/ — Synthesis Energy Systems, Inc. (NASDAQ: SYMX – News) (“SES”) today announced that it, China Energy Industry Holding Group Co. and Zhongjixuan Investment Management Company Ltd. (“ZJX”) have mutually agreed to an extension of the closing period of their share purchase agreement dated March 31, 2011 and amended on August 17, 2011 , through March 31 , 2012. While the parties have indicated their support for this investment, this extension was necessary in order to allow time for Yima Coal Industry Group Co., Ltd. (“Yima”) and its advisors to complete their due diligence and reviews of its proposed investment, including evaluating efficient structures for the proposed transactions. The parties believe that these steps will allow for optimal structuring and capital funding at the project and regional levels, which will be required for the large scale future investments in China anticipated by the parties.
“Although the transactions will not be submitted for governmental approval before December 31 of this year, good progress has been made in the past few weeks. We believe the interests of the parties are aligned and we remain confident in the short and long term value we believe can be realized by working together with them,” commented Robert Rigdon , President and CEO of SES. ”While the parties require additional time to complete the reviews, processes and governmental approvals necessary to make an investment into a foreign entity such as SES, we believe that each of the parties is taking this investment very seriously as evidenced by their diligence in working toward finalizing the deal.”
“We remain confident that the parties will proceed quickly to complete this important strategic investment into SES,” said Feng Feng , Chairman and CEO of ZJX.
About Synthesis Energy Systems, Inc.
SES provides technology, equipment and engineering services for the conversion of low rank, low cost coal and biomass feedstocks into energy and chemical products. Its strategy is to create value through providing technology and equipment in regions where low rank coals and biomass feedstocks can be profitably converted into high value products through its proprietary U-GAS® fluidized bed gasification technology, which SES licenses from the Gas Technology Institute. U-GAS® gasifies coal cost effectively, without many of the harmful emissions normally associated with coal combustion plants. The primary advantages of U-GAS® relative to other gasification technologies are (a) greater fuel flexibility provided by the ability of SES to use all ranks of coal (including low rank, high ash and high moisture coals, which are significantly cheaper than higher grade coals), many coal waste products and biomass feed stocks; and (b) the ability of SES to operate efficiently on a smaller scale, which enables the construction of plants more quickly, at a lower capital cost, and, in many cases, in closer proximity to coal sources. SES currently has offices in Houston, Texas , and Shanghai, China . For more information on SES, visit www.synthesisenergy.com or call (713) 579-0600.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are the early stage of development of SES, its estimate of the sufficiency of existing capital sources, its ability to successfully develop its licensing business, its ability to raise additional capital to fund cash requirements for future investments and operations, its ability to reduce operating costs, the limited history and viability of its technology, the effect of the current international financial crisis on its business, commodity prices and the availability and terms of financing opportunities, its results of operations in foreign countries and its ability to diversify, its ability to maintain production from its first plant in the ZZ joint venture, its ability to complete the expansion of the ZZ project, its ability to obtain the necessary approvals and permits for its Yima project and other future projects, the estimated timetables for achieving mechanical completion and commencing commercial operations for the Yima project, its ability to negotiate the terms of the conversion of the Yima project from methanol to glycol, the sufficiency of internal controls and procedures and the ability of SES to grow its business as a result of the China Energy and Zuari transactions as well as its joint venture with Midas Resource Partners. Although SES believes that in making such forward-looking statements its expectations are based upon reasonable assumptions, such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. SES cannot assure you that the assumptions upon which these statements are based will prove to have been correct.
Important Notice
In connection with the proposed transaction, SES has filed a preliminary proxy statement, and intends to files a definitive proxy statement, with the SEC and intends to mail the definitive proxy statement to the stockholders of SES. SES and its directors and officers may be deemed to be participants in the solicitation of proxies from the stockholders of SES in connection with the transaction. Information about the transaction is set forth in the preliminary proxy statement filed, and will be set forth in the definitive proxy statement to be filed by SES with the SEC.
When available, you may obtain the preliminary and definitive proxy statements for free by visiting EDGAR on the SEC website at www.sec.gov. Investors should read the definitive proxy statement carefully before making any voting or investment decision because that document will contain important information.
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“Although the transactions will not be submitted for governmental approval before December 31 of this year, good progress has been made in the past few weeks. We believe the interests of the parties are aligned and we remain confident in the short and long term value we believe can be realized by working together with them,” commented Robert Rigdon , President and CEO of SES. ”While the parties require additional time to complete the reviews, processes and governmental approvals necessary to make an investment into a foreign entity such as SES, we believe that each of the parties is taking this investment very seriously as evidenced by their diligence in working toward finalizing the deal.”
“We remain confident that the parties will proceed quickly to complete this important strategic investment into SES,” said Feng Feng , Chairman and CEO of ZJX.
About Synthesis Energy Systems, Inc.
SES provides technology, equipment and engineering services for the conversion of low rank, low cost coal and biomass feedstocks into energy and chemical products. Its strategy is to create value through providing technology and equipment in regions where low rank coals and biomass feedstocks can be profitably converted into high value products through its proprietary U-GAS® fluidized bed gasification technology, which SES licenses from the Gas Technology Institute. U-GAS® gasifies coal cost effectively, without many of the harmful emissions normally associated with coal combustion plants. The primary advantages of U-GAS® relative to other gasification technologies are (a) greater fuel flexibility provided by the ability of SES to use all ranks of coal (including low rank, high ash and high moisture coals, which are significantly cheaper than higher grade coals), many coal waste products and biomass feed stocks; and (b) the ability of SES to operate efficiently on a smaller scale, which enables the construction of plants more quickly, at a lower capital cost, and, in many cases, in closer proximity to coal sources. SES currently has offices in Houston, Texas , and Shanghai, China . For more information on SES, visit www.synthesisenergy.com or call (713) 579-0600.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are the early stage of development of SES, its estimate of the sufficiency of existing capital sources, its ability to successfully develop its licensing business, its ability to raise additional capital to fund cash requirements for future investments and operations, its ability to reduce operating costs, the limited history and viability of its technology, the effect of the current international financial crisis on its business, commodity prices and the availability and terms of financing opportunities, its results of operations in foreign countries and its ability to diversify, its ability to maintain production from its first plant in the ZZ joint venture, its ability to complete the expansion of the ZZ project, its ability to obtain the necessary approvals and permits for its Yima project and other future projects, the estimated timetables for achieving mechanical completion and commencing commercial operations for the Yima project, its ability to negotiate the terms of the conversion of the Yima project from methanol to glycol, the sufficiency of internal controls and procedures and the ability of SES to grow its business as a result of the China Energy and Zuari transactions as well as its joint venture with Midas Resource Partners. Although SES believes that in making such forward-looking statements its expectations are based upon reasonable assumptions, such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. SES cannot assure you that the assumptions upon which these statements are based will prove to have been correct.
Important Notice
In connection with the proposed transaction, SES has filed a preliminary proxy statement, and intends to files a definitive proxy statement, with the SEC and intends to mail the definitive proxy statement to the stockholders of SES. SES and its directors and officers may be deemed to be participants in the solicitation of proxies from the stockholders of SES in connection with the transaction. Information about the transaction is set forth in the preliminary proxy statement filed, and will be set forth in the definitive proxy statement to be filed by SES with the SEC.
When available, you may obtain the preliminary and definitive proxy statements for free by visiting EDGAR on the SEC website at www.sec.gov. Investors should read the definitive proxy statement carefully before making any voting or investment decision because that document will contain important information.
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Credit Agricole quits commodity trade as crisis bites
(Reuters) – Credit Agricole will stop trading commodities and will also slash its financing of the multi-billion-dollar market, the most sweeping commodity cuts yet among European banks strained by the euro zone crisis.
Credit Agricole, the formerly farm-focused bank that had boosted its energy trading in recent years, warned on Wednesday of losses and write-downs as it struggles to cope with the credit crunch. The cuts come just weeks after rival Societe Generaleshut down its year-old U.S. gas and power trading desk, and leader BNP Paribas consolidated.
The deepening euro zone debt crisis has hit French banks hard as traditional sources of dollar funding have evaporated and as they face pressure to meet tougher capital requirements.
Volatile commodity prices, dimmer growth prospects and tougher regulation are also forcing some firms to question the outlook for the decade-long boom in trading raw materials.
Cargill Inc., which has voiced a bleaker economic outlook for next year than most of its peers, is cutting 125 jobs worldwide from its energy, transportation and metals operations as part of plans to reduce 2,000 or 1.4 percent of its global workforce over the next six months.
Trade sources said more companies may follow.
“What is happening with Credit Agricole is certainly a major trend across banking where the entire commodities trading business is shrinking,” said a senior commodities trader who recently left a major bank for an independent trading house.
“It is happening because of regulations, as proprietary trading is not allowed any more and because people have overspeculated in the past years and got badly burnt.”
Credit Agricole’s commodities trading employs around 100 staff globally, including traders, analysts, marketing teams and technical staff, sources close to Credit Agricole said.
A source in the bank said many employees had only learned of the closure of the commodities trading unit on Wednesday:
“It has all happened very quickly. It is a shock.”
CREDIT PRESSURE
On Wednesday, Credit Agricole Chief Executive Jean-Paul Chifflet said the bank was pulling out of commodities because it had less expertise in the field than other core areas:
“We preferred to stop it completely and devote our energy to other activities,” he said.
But Chifflet told Les Echos newspaper the bank would not sell its holding in Newedge, a commodities futures and clearing brokerage it co-owns with Societe Generale.
Last year, the head of Credit Agricole’s commodities trading division, Martin Fraenkel, told Reuters energy was a key growth area because “clients of the bank have ever more need for hedging services in these markets”. The bank had just secured a potentially potent tie-up with power trading giant ETF Trading.
But nearly two years on, European banks are under enormous pressure in credit markets and only very large banks have scope to expand. Credit Agricole may be the first of several banks to drop commodities trading, said the senior commodities trader:
“The major players – Goldman Sachs, Morgan Stanley, Merrill Lynch, Deutsche Bank – are still hiring to replace people who leave to funds and trading houses. But small and medium-sized banks are just shutting everything down.”
Morgan Stanley said on Wednesday it would cut 1,600 employees in the first quarter; it did not say how many, if any, would be in its commodities division, which ranks with Goldman Sachs and JP Morgan as one of the three largest in the world.
A senior oil trader at a major European bank said only very large players could now survive in commodities: “They (Credit Agricole) wanted to have a commodities arm but the appetite for risk was so small it was impossible to do big deals.”
Credit Agricole, which has expanded from its agricultural origins in recent years, said on Wednesday it would cut 2,350 jobs and exit 21 of the 55 countries where it operates and shutter entire businesses including equity derivatives.
BNP Paribas, Europe’s trade finance leader in commodities, has been cutting its trade finance portfolio, drastically reducing exposure to small and medium sized oil and metals firms and reselling part of that exposure, bankers say. A spokeswoman declined to comment.
In November, traders said the bank would close its Houston energy trading office and move some of the team to New York. It has also lost a senior metals trader.
Last week, Societe Generaletold employees it would shut down its Stamford, Connecticut-based physical gas and power operation and lay off most of the 140 or so employees at the trading unit it bought less than a year earlier from RBS Sempra.
“VERY, VERY STRONG REDUCTION”
Many details of the changes only emerged on Thursday.
The bank’s commodities derivatives business, trading oil, gas, metals and softs, is based in London and Hong Kong. It also has market representatives in Tokyo, Singapore and New York.
Credit Agricole has been active in oil hedging, traders said, and does not have a reputation for taking on major risk.
“It was very flow-based, rather than proprietary,” said a London-based trader with a bank. He said the bank hedged oil positions for airlines, taking positions on over-the-counter jet fuel derivatives and gas oil on the IntercontinentalExchange.
Sources close to Credit Agricole say the bank also plans to cut dramatically its commodities trade financing, which involve commitments of tens of billions of euros, but the exact scale of the retrenchment was unclear.
“In terms of commodities financing, they plan a very, very strong reduction in their activities,” a source close to Credit Agricole said, adding the full array of short-term and longer-term letters of credit and export credit would be affected.
The bank’s Geneva-based trade finance activities have about 120 people spread around the world, according to a former head of a commodities unit at Credit Agricole Corporate and Investment Banking who left the company just months ago.
Credit Agricole’s commodities financing activities concern around 600 people, of which at least half are in France, and involve commitments of tens of billions of euros.
TOUGH MARKETS
Cargill is not alone among trading houses responding to a disappointing 2011 performance, Swiss-based coal traders said.
Coal has been a particularly tough market for traders this year because prices have been largely stagnant and liquidity has been lower. Without liquidity and volatility, trading profits have been hard to come by.
“We can confirm that as a result of the internal structural changes there have been some personnel changes which will affect around 125 employees in our Energy, Transportation and Metals operations around the world,” a Cargill spokesman said.
Cargill has 600 employees in its Geneva office and around 1,100 worldwide in the non-oil Energy Transportation Industrial (ETI) business group.
Cargill will keep the split in its energy business between oil and non-oil with a global non-oil division made up of coal, gas, power and carbon trading and headed by Frank Rivendal, formerly head of power and gas in the U.S. for Cargill.
“Broadly speaking, the big changes are over and very few have been fired so far but there may be a few more job cuts,” one source said.
“In 2008-2009 everybody made money because prices were so volatile but this year prices have been stagnant and for the first time in a decade, even the big trading houses are facing a downturn in earnings,” he added.
Last month Cargill former head of coal based in Geneva, Patrick Bracken, left to return to the U.S. and Peter Biston, Geneva-based head of power and gas, a junior gas trader and a power trader lost their jobs.
Cargill Ferrous International in November shut its physical steel trading desks in Hong Kong and Geneva and its top sugar trader, Jonathan Drake, left in early December.
“That (restructuring) makes sense. In the previous structure oil made a lot of money and they couldn’t bonus traders as power and gas were down. Now oil can live or die by its own performance,” said Peter Henry, senior consultant with Commodity Search Partners.
(Additional reporting By Jonathan Leff; Editing by David Gregorio)
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Credit Agricole, the formerly farm-focused bank that had boosted its energy trading in recent years, warned on Wednesday of losses and write-downs as it struggles to cope with the credit crunch. The cuts come just weeks after rival Societe Generale
The deepening euro zone debt crisis has hit French banks hard as traditional sources of dollar funding have evaporated and as they face pressure to meet tougher capital requirements.
Volatile commodity prices, dimmer growth prospects and tougher regulation are also forcing some firms to question the outlook for the decade-long boom in trading raw materials.
Cargill Inc.
Trade sources said more companies may follow.
“What is happening with Credit Agricole is certainly a major trend across banking where the entire commodities trading business is shrinking,” said a senior commodities trader who recently left a major bank for an independent trading house.
“It is happening because of regulations, as proprietary trading is not allowed any more and because people have overspeculated in the past years and got badly burnt.”
Credit Agricole’s commodities trading employs around 100 staff globally, including traders, analysts, marketing teams and technical staff, sources close to Credit Agricole said.
A source in the bank said many employees had only learned of the closure of the commodities trading unit on Wednesday:
“It has all happened very quickly. It is a shock.”
CREDIT PRESSURE
On Wednesday, Credit Agricole Chief Executive Jean-Paul Chifflet said the bank was pulling out of commodities because it had less expertise in the field than other core areas:
“We preferred to stop it completely and devote our energy to other activities,” he said.
But Chifflet told Les Echos newspaper the bank would not sell its holding in Newedge, a commodities futures and clearing brokerage it co-owns with Societe Generale
Last year, the head of Credit Agricole’s commodities trading division, Martin Fraenkel, told Reuters energy was a key growth area because “clients of the bank have ever more need for hedging services in these markets”. The bank had just secured a potentially potent tie-up with power trading giant ETF Trading.
But nearly two years on, European banks are under enormous pressure in credit markets and only very large banks have scope to expand. Credit Agricole may be the first of several banks to drop commodities trading, said the senior commodities trader:
“The major players – Goldman Sachs, Morgan Stanley, Merrill Lynch, Deutsche Bank – are still hiring to replace people who leave to funds and trading houses. But small and medium-sized banks are just shutting everything down.”
Morgan Stanley said on Wednesday it would cut 1,600 employees in the first quarter; it did not say how many, if any, would be in its commodities division, which ranks with Goldman Sachs and JP Morgan as one of the three largest in the world.
A senior oil trader at a major European bank said only very large players could now survive in commodities: “They (Credit Agricole) wanted to have a commodities arm but the appetite for risk was so small it was impossible to do big deals.”
Credit Agricole, which has expanded from its agricultural origins in recent years, said on Wednesday it would cut 2,350 jobs and exit 21 of the 55 countries where it operates and shutter entire businesses including equity derivatives.
BNP Paribas, Europe’s trade finance leader in commodities, has been cutting its trade finance portfolio, drastically reducing exposure to small and medium sized oil and metals firms and reselling part of that exposure, bankers say. A spokeswoman declined to comment.
In November, traders said the bank would close its Houston energy trading office and move some of the team to New York. It has also lost a senior metals trader.
Last week, Societe Generale
“VERY, VERY STRONG REDUCTION”
Many details of the changes only emerged on Thursday.
The bank’s commodities derivatives business, trading oil, gas, metals and softs, is based in London and Hong Kong. It also has market representatives in Tokyo, Singapore and New York.
Credit Agricole has been active in oil hedging, traders said, and does not have a reputation for taking on major risk.
“It was very flow-based, rather than proprietary,” said a London-based trader with a bank. He said the bank hedged oil positions for airlines, taking positions on over-the-counter jet fuel derivatives and gas oil on the IntercontinentalExchange.
Sources close to Credit Agricole say the bank also plans to cut dramatically its commodities trade financing, which involve commitments of tens of billions of euros, but the exact scale of the retrenchment was unclear.
“In terms of commodities financing, they plan a very, very strong reduction in their activities,” a source close to Credit Agricole said, adding the full array of short-term and longer-term letters of credit and export credit would be affected.
The bank’s Geneva-based trade finance activities have about 120 people spread around the world, according to a former head of a commodities unit at Credit Agricole Corporate and Investment Banking who left the company just months ago.
Credit Agricole’s commodities financing activities concern around 600 people, of which at least half are in France, and involve commitments of tens of billions of euros.
TOUGH MARKETS
Cargill is not alone among trading houses responding to a disappointing 2011 performance, Swiss-based coal traders said.
Coal has been a particularly tough market for traders this year because prices have been largely stagnant and liquidity has been lower. Without liquidity and volatility, trading profits have been hard to come by.
“We can confirm that as a result of the internal structural changes there have been some personnel changes which will affect around 125 employees in our Energy, Transportation and Metals operations around the world,” a Cargill spokesman said.
Cargill has 600 employees in its Geneva office and around 1,100 worldwide in the non-oil Energy Transportation Industrial (ETI) business group.
Cargill will keep the split in its energy business between oil and non-oil with a global non-oil division made up of coal, gas, power and carbon trading and headed by Frank Rivendal, formerly head of power and gas in the U.S. for Cargill.
“Broadly speaking, the big changes are over and very few have been fired so far but there may be a few more job cuts,” one source said.
“In 2008-2009 everybody made money because prices were so volatile but this year prices have been stagnant and for the first time in a decade, even the big trading houses are facing a downturn in earnings,” he added.
Last month Cargill former head of coal based in Geneva, Patrick Bracken, left to return to the U.S. and Peter Biston, Geneva-based head of power and gas, a junior gas trader and a power trader lost their jobs.
Cargill Ferrous International in November shut its physical steel trading desks in Hong Kong and Geneva and its top sugar trader, Jonathan Drake, left in early December.
“That (restructuring) makes sense. In the previous structure oil made a lot of money and they couldn’t bonus traders as power and gas were down. Now oil can live or die by its own performance,” said Peter Henry, senior consultant with Commodity Search Partners.
(Additional reporting By Jonathan Leff; Editing by David Gregorio)
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RioCan Real Estate Investment Trust Announces Completion of Sheppard Centre and Alamo Ranch Purchases
TORONTO, ONTARIO–(Marketwire -12/05/11)- RioCan Real Estate Investment Trust (“RioCan”) (TSX: REI.UN) is pleased to announce that RioCan has completed the purchase of the Sheppard Centre on a 50/50 joint venture basis with its partner KingSett Capital. RioCan also purchased Alamo Ranch in San Antonio Texas on an 80/20 joint venture basis with Inland Western Retail REIT (“Inland Western”) (80% RioCan / 20% Inland Western).
On December 1, 2011, RioCan completed the acquisition of Sheppard Centre. Sheppard Centre, located at the northeast corner of Yonge and Sheppard, is a 673,000 square foot urban mixed use centre that contains retail, office, and residential uses. RioCan purchased the property on a 50/50 joint venture basis with KingSett Capital at a purchase price of $218 million at 100% ($109 million at RioCan’s interest). $190 million has been allocated to the income producing property and $28 million has been allocated to the excess residential density. The capitalization rate on year one income is 6.11%. RioCan will manage the property, act as leasing manager for the property and will be development manager in connection with any redevelopment of the property on a market fee basis. RioCan has entered into a new US$67.5 million bank credit facility to fund part of its portion of the purchase price.
The retail portion of the property has a weighted average lease term of 5.3 years, is 96.1% leased, and contains 257,039 square feet of retail space on four levels. The major tenants in the retail portion of the property are Cineplex, Winners, Shoppers Drug Mart, Bank of Montreal, CIBC, and TD Canada Trust. The office portion of the property has a weighted average lease term of 6.8 years, is 100% leased, and contains 415,815 square feet of office space in two towers, 19 and 9 storeys, respectively. Major tenants in the office portion of the property include Bank of Montreal and Aon Hewitt, who together lease approximately 82% of the office space. The property has direct access to both the Yonge and Sheppard subway lines and has three levels of underground parking that can accommodate more than 2,100 vehicles. Beyond the current retail and office uses, this property also has the potential for additional intensification through retail expansion and the addition of a residential/condominium component.
Recent Acquisition Activities – United States
On December 2, 2011, RioCan completed the purchase of Alamo Ranch, located in San Antonio, Texas. This is RioCan’s first acquisition in the San Antonio market. RioCan’s strategy has been to focus on the four large urban markets (Dallas-Fort Worth, Houston, San Antonio, and Austin) in Texas. The 465,000 square foot property was built in 2008. The centre is 88% occupied and has a weighted average lease term of 6.6 years. The property is shadow anchored by Target, JC Penney and Lowe’s. Major tenants at the property include Best Buy, Marshalls, Ross Dress for Less, and Dick’s Sporting Goods. The property was acquired on an 80/20 joint venture basis with Inland Western (80% RioCan / 20% Inland Western) for US$93.0 million (at 100%) or US$74.4 million at RioCan’s interest, which equates to a cap rate of 7.2%. The property was acquired free and clear of financing. The joint venture is in the process of securing conventional third party financing.
About RioCan
RioCan is Canada’s largest real estate investment trust with a total capitalization of approximately $11.9 billion as at September 30, 2011. It owns and manages Canada’s largest portfolio of shopping centres with ownership interests in a portfolio of 314 retail properties, including 10 under development, containing an aggregate of over 75 million square feet. RioCan owns an interest in 38 grocery anchored and new format retail centres in the United States through various joint venture arrangements. For further information, please refer to RioCan’s website at http://www.riocan.com/.
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On December 1, 2011, RioCan completed the acquisition of Sheppard Centre. Sheppard Centre, located at the northeast corner of Yonge and Sheppard, is a 673,000 square foot urban mixed use centre that contains retail, office, and residential uses. RioCan purchased the property on a 50/50 joint venture basis with KingSett Capital at a purchase price of $218 million at 100% ($109 million at RioCan’s interest). $190 million has been allocated to the income producing property and $28 million has been allocated to the excess residential density. The capitalization rate on year one income is 6.11%. RioCan will manage the property, act as leasing manager for the property and will be development manager in connection with any redevelopment of the property on a market fee basis. RioCan has entered into a new US$67.5 million bank credit facility to fund part of its portion of the purchase price.
The retail portion of the property has a weighted average lease term of 5.3 years, is 96.1% leased, and contains 257,039 square feet of retail space on four levels. The major tenants in the retail portion of the property are Cineplex, Winners, Shoppers Drug Mart, Bank of Montreal, CIBC, and TD Canada Trust. The office portion of the property has a weighted average lease term of 6.8 years, is 100% leased, and contains 415,815 square feet of office space in two towers, 19 and 9 storeys, respectively. Major tenants in the office portion of the property include Bank of Montreal and Aon Hewitt, who together lease approximately 82% of the office space. The property has direct access to both the Yonge and Sheppard subway lines and has three levels of underground parking that can accommodate more than 2,100 vehicles. Beyond the current retail and office uses, this property also has the potential for additional intensification through retail expansion and the addition of a residential/condominium component.
Recent Acquisition Activities – United States
On December 2, 2011, RioCan completed the purchase of Alamo Ranch, located in San Antonio, Texas. This is RioCan’s first acquisition in the San Antonio market. RioCan’s strategy has been to focus on the four large urban markets (Dallas-Fort Worth, Houston, San Antonio, and Austin) in Texas. The 465,000 square foot property was built in 2008. The centre is 88% occupied and has a weighted average lease term of 6.6 years. The property is shadow anchored by Target, JC Penney and Lowe’s. Major tenants at the property include Best Buy, Marshalls, Ross Dress for Less, and Dick’s Sporting Goods. The property was acquired on an 80/20 joint venture basis with Inland Western (80% RioCan / 20% Inland Western) for US$93.0 million (at 100%) or US$74.4 million at RioCan’s interest, which equates to a cap rate of 7.2%. The property was acquired free and clear of financing. The joint venture is in the process of securing conventional third party financing.
About RioCan
RioCan is Canada’s largest real estate investment trust with a total capitalization of approximately $11.9 billion as at September 30, 2011. It owns and manages Canada’s largest portfolio of shopping centres with ownership interests in a portfolio of 314 retail properties, including 10 under development, containing an aggregate of over 75 million square feet. RioCan owns an interest in 38 grocery anchored and new format retail centres in the United States through various joint venture arrangements. For further information, please refer to RioCan’s website at http://www.riocan.com/.
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