2012年1月30日星期一
Cheap loans plan to help elderly keep independence
The work of the advisers, experts and charities on the panel will underpin a White Paper on the social care system expected in April.
The so-called “Prevention” group has told ministers to do much more to “support individuals to maintain their independence and well-being for as long as possible in their own homes”.
The group has called for “a programme of work to support future proofing and adaptation of accommodation to enable people to live independently at home for longer”.
Adaptation work can be costly, and the advisers suggest that ministers should provide direct financial help for people undertaking such projects.
The Government should offer older people a “loan guarantee scheme” similar to those recently offered to first-time homebuyers, the group said.
Such low-cost loans would be used for “property improvements” for older and disabled home owners, carried out by either charities or the private sector.
The group also told ministers that many people lack adequate information about the care system, meaning they do not plan properly for going into care and sometimes make the wrong choices.
In response, a “comprehensive national advice and information service” should be set up to allow people to take better-informed choices earlier in life about care.
Helping older people “feel less isolated and better connected to others” should be a central objective of social care policies, the panel said.
One approach is “timebanking” where people who spend time volunteering are awarded credits that they can exchange for services.
Such projects have been used in Japan for many years.
http://tourism9.com/ http://vkins.com/
2012年1月19日星期四
Outside the Box: Private equity, carried interest and Mitt Romney
By Jack O. Nutter
WASHINGTON (MarketWatch) — The term “private equity” is being demonized in political circles these days. The White House and some Republicans have equated private equity with some sort of evil, a disease, and a scourge. I want to believe these politicians do not really understand the concept and if they do, then I fear the country is in a whole lot more trouble than we think.
Private equity consists of investors and funds that provide private companies with direct investments or conduct buyouts of public companies. These investments can be used to fund new start-up companies, expand working capital, make acquisitions, or improve a balance sheet. Private equity is one of the foundations of the capitalist system.
The majority of private equity consists of institutional and accredited investors who commit large sums of money for long periods of time. Private-equity investments often demand long holding periods to allow a turnaround of a distressed company or a liquidity event such as an initial public offering or sale to a public company. Indirectly, almost every American has a stake in the concept and results of private equity.
Mitt Romney owned and managed a private-equity firm called Bain Capital until retiring and being bought out in 1999. Listen to the political rhetoric; you would have thought he presided over the proceedings of the Spanish Inquisition.
This is not the place to debate or critique the dealings or role of private equity funds or Bain Capital.
For that, the New York Times gives a good look.
Instead, I want to discuss the tax treatment of such enterprises and to ask how such treatment may have affected Romney.
Most private-equity funds are organized as limited partnerships with the investors (pension funds, endowments, foundations and wealthy individuals) contributing capital and becoming limited partners with a general partner — such as Bain Capital — that provides the entrepreneurial management of the partnership. The general partner is paid a management fee.
The general partner may also contribute its own capital and, as an incentive, receives an additional interest in the overall eventual profits. This additional interest is known as the “promote,” “profits interest,” or “carried interest.” The carried interest is typically 20% of the profits and is generated from appreciation in the value of the partnership’s property realized when the enterprise is sold or taken public.
The tax treatment of carried interest under current law allows managers of hedge funds, private-equity funds, venture-capital funds and others to pay a lower 15% maximum income tax rate applied to investment income as capital gains, rather than higher income tax rates for ordinary income which exceed 35%. This is a huge difference.
How do they do that? It is complicated but starts with the taxation of partnerships. If you have an interest in a partnership, you are allocated a share of that partnership’s income. The income to the partner takes on the same character, such as capital gains, that it does in the partnership’s hands, and the partner is taxed on it accordingly. The partnership itself does not pay taxes.
Some investment partnerships, particularly in the private-equity industry, earn mostly capital gains by buying and selling shares in other companies. The managers of these companies thus receive their carried interest in the form of capital gains and pay capital-gains tax rather than ordinary income tax. Nifty trick!
Carried interest is a business and financial arrangement that has formed an essential structural element to almost every sector of the U.S. economy, including real-estate development, private equity, hedge funds, health care, mining, and oil and gas. Changes in the tax rules would have a profound impact on how these businesses operate and their structure.
Many policy makers believe the carried interest paid to partnership managers is really compensation for their management services, which should be taxed at the higher ordinary income rate. On the other side, supporters of the current tax treatment say the carried interest is only a potential share of partnership profits and should not be considered compensation for services.
Changes in the taxation of carried interest have passed a Democratic-controlled House of Representative three times since 2007 and the Obama administration has included a carried-interest tax increase in each of its annual federal budgets and even more recently in the American Jobs Act introduced last September, where the current law on carried interests was described as “an unfair and inefficient tax preference.”
So how does Mitt Romney fit in to all of this?
There is no question he has benefited and perhaps continues to benefit from the favorable tax treatment of the carried-interest provisions. As he retained a share of the “profits interest” after he left Bain Capital, Romney would have gotten favorable tax treatment on certain income received even though his service labor did not contribute to the profits of new investments by the firm. To what magnitude this lessens his tax burdens is not known, as Romney has not released his tax returns
Romney is a wealthy man. Of that there is no doubt. He made it the hard way — he earned it. To some, being too wealthy is somehow wrong. I do not begrudge his success. However, it is a legitimate question to ask how he stands on this particular issue. Would he support changes in the carried-interest provisions for tax policy, economic or social reasons?
It is hard to have crocodile tears for the hedge-fund and equity-fund managers and the like. They have made and continue to make enormous money, partially fueled by favorable tax treatment. “Enormous” may be even too small a word. Even the word “undeserving” comes to mind. I can say the same thing about entertainers, professional athletes, football coaches and lobbyists who do not share in the same tax breaks. However, that is part of the used-to-be-freer market system we have.
There are industries other than the financial sector where the carried-interest concept is ingrained and useful. Changes in tax policy and treatment is worth examining and a good place to start is asking Romney what he thinks.
http://tourism9.com/ http://vkins.com/
WASHINGTON (MarketWatch) — The term “private equity” is being demonized in political circles these days. The White House and some Republicans have equated private equity with some sort of evil, a disease, and a scourge. I want to believe these politicians do not really understand the concept and if they do, then I fear the country is in a whole lot more trouble than we think.
Private equity consists of investors and funds that provide private companies with direct investments or conduct buyouts of public companies. These investments can be used to fund new start-up companies, expand working capital, make acquisitions, or improve a balance sheet. Private equity is one of the foundations of the capitalist system.
Romney: Highlights from South Carolina debate
Republican presidential candidate Mitt Romney on his business experience, releasing his income tax records and illegal immigration at the Fox News Channel and Wall Street Journal GOP Debate in South Carolina. Courtesy Fox News Channel.Mitt Romney owned and managed a private-equity firm called Bain Capital until retiring and being bought out in 1999. Listen to the political rhetoric; you would have thought he presided over the proceedings of the Spanish Inquisition.
This is not the place to debate or critique the dealings or role of private equity funds or Bain Capital.
For that, the New York Times gives a good look.
Instead, I want to discuss the tax treatment of such enterprises and to ask how such treatment may have affected Romney.
Most private-equity funds are organized as limited partnerships with the investors (pension funds, endowments, foundations and wealthy individuals) contributing capital and becoming limited partners with a general partner — such as Bain Capital — that provides the entrepreneurial management of the partnership. The general partner is paid a management fee.
The general partner may also contribute its own capital and, as an incentive, receives an additional interest in the overall eventual profits. This additional interest is known as the “promote,” “profits interest,” or “carried interest.” The carried interest is typically 20% of the profits and is generated from appreciation in the value of the partnership’s property realized when the enterprise is sold or taken public.
The tax treatment of carried interest under current law allows managers of hedge funds, private-equity funds, venture-capital funds and others to pay a lower 15% maximum income tax rate applied to investment income as capital gains, rather than higher income tax rates for ordinary income which exceed 35%. This is a huge difference.
How do they do that? It is complicated but starts with the taxation of partnerships. If you have an interest in a partnership, you are allocated a share of that partnership’s income. The income to the partner takes on the same character, such as capital gains, that it does in the partnership’s hands, and the partner is taxed on it accordingly. The partnership itself does not pay taxes.
Some investment partnerships, particularly in the private-equity industry, earn mostly capital gains by buying and selling shares in other companies. The managers of these companies thus receive their carried interest in the form of capital gains and pay capital-gains tax rather than ordinary income tax. Nifty trick!
Carried interest is a business and financial arrangement that has formed an essential structural element to almost every sector of the U.S. economy, including real-estate development, private equity, hedge funds, health care, mining, and oil and gas. Changes in the tax rules would have a profound impact on how these businesses operate and their structure.
Many policy makers believe the carried interest paid to partnership managers is really compensation for their management services, which should be taxed at the higher ordinary income rate. On the other side, supporters of the current tax treatment say the carried interest is only a potential share of partnership profits and should not be considered compensation for services.
Changes in the taxation of carried interest have passed a Democratic-controlled House of Representative three times since 2007 and the Obama administration has included a carried-interest tax increase in each of its annual federal budgets and even more recently in the American Jobs Act introduced last September, where the current law on carried interests was described as “an unfair and inefficient tax preference.”
So how does Mitt Romney fit in to all of this?
There is no question he has benefited and perhaps continues to benefit from the favorable tax treatment of the carried-interest provisions. As he retained a share of the “profits interest” after he left Bain Capital, Romney would have gotten favorable tax treatment on certain income received even though his service labor did not contribute to the profits of new investments by the firm. To what magnitude this lessens his tax burdens is not known, as Romney has not released his tax returns
Romney is a wealthy man. Of that there is no doubt. He made it the hard way — he earned it. To some, being too wealthy is somehow wrong. I do not begrudge his success. However, it is a legitimate question to ask how he stands on this particular issue. Would he support changes in the carried-interest provisions for tax policy, economic or social reasons?
It is hard to have crocodile tears for the hedge-fund and equity-fund managers and the like. They have made and continue to make enormous money, partially fueled by favorable tax treatment. “Enormous” may be even too small a word. Even the word “undeserving” comes to mind. I can say the same thing about entertainers, professional athletes, football coaches and lobbyists who do not share in the same tax breaks. However, that is part of the used-to-be-freer market system we have.
There are industries other than the financial sector where the carried-interest concept is ingrained and useful. Changes in tax policy and treatment is worth examining and a good place to start is asking Romney what he thinks.
http://tourism9.com/ http://vkins.com/
Private equity, carried interest and Mitt Romney
WASHINGTON (MarketWatch) — The term “private equity” is being demonized in political circles these days. The White House and some Republicans have equated private equity with some sort of evil, a disease, and a scourge. I want to believe these politicians do not really understand the concept and if they do, then I fear the country is in a whole lot more trouble than we think.
Private equity consists of investors and funds that provide private companies with direct investments or conduct buyouts of public companies. These investments can be used to fund new start-up companies, expand working capital, make acquisitions, or improve a balance sheet. Private equity is one of the foundations of the capitalist system.
The majority of private equity consists of institutional and accredited investors who commit large sums of money for long periods of time. Private-equity investments often demand long holding periods to allow a turnaround of a distressed company or a liquidity event such as an initial public offering or sale to a public company. Indirectly, almost every American has a stake in the concept and results of private equity.
Mitt Romney owned and managed a private-equity firm called Bain Capital until retiring and being bought out in 1999. Listen to the political rhetoric; you would have thought he presided over the proceedings of the Spanish Inquisition.
This is not the place to debate or critique the dealings or role of private equity funds or Bain Capital. For that, the New York Times gives a good look. Instead, I want to discuss the tax treatment of such enterprises and to ask how such treatment may have affected Romney.
Most private-equity funds are organized as limited partnerships with the investors (pension funds, endowments, foundations and wealthy individuals) contributing capital and becoming limited partners with a general partner — such as Bain Capital — that provides the entrepreneurial management of the partnership. The general partner is paid a management fee.
The general partner may also contribute its own capital and, as an incentive, receives an additional interest in the overall eventual profits. This additional interest is known as the “promote,” “profits interest,” or “carried interest.” The carried interest is typically 20% of the profits and is generated from appreciation in the value of the partnership’s property realized when the enterprise is sold or taken public.
The tax treatment of carried interest under current law allows managers of hedge funds, private-equity funds, venture-capital funds and others to pay a lower 15% maximum income tax rate applied to investment income as capital gains, rather than higher income tax rates for ordinary income which exceed 35%. This is a huge difference.
How do they do that? It is complicated but starts with the taxation of partnerships. If you have an interest in a partnership, you are allocated a share of that partnership’s income. The income to the partner takes on the same character, such as capital gains, that it does in the partnership’s hands, and the partner is taxed on it accordingly. The partnership itself does not pay taxes.
Some investment partnerships, particularly in the private-equity industry, earn mostly capital gains by buying and selling shares in other companies. The managers of these companies thus receive their carried interest in the form of capital gains and pay capital-gains tax rather than ordinary income tax. Nifty trick!
Carried interest is a business and financial arrangement that has formed an essential structural element to almost every sector of the U.S. economy, including real-estate development, private equity, hedge funds, health care, mining, and oil and gas. Changes in the tax rules would have a profound impact on how these businesses operate and their structure.
Many policy makers believe the carried interest paid to partnership managers is really compensation for their management services, which should be taxed at the higher ordinary income rate. On the other side, supporters of the current tax treatment say the carried interest is only a potential share of partnership profits and should not be considered compensation for services.
Changes in the taxation of carried interest have passed a Democratic-controlled House of Representative three times since 2007 and the Obama administration has included a carried-interest tax increase in each of its annual federal budgets and even more recently in the American Jobs Act introduced last September, where the current law on carried interests was described as “an unfair and inefficient tax preference.”
So how does Mitt Romney fit in to all of this?
There is no question he has benefited and perhaps continues to benefit from the favorable tax treatment of the carried-interest provisions. As he retained a share of the “profits interest” after he left Bain Capital, Romney would have gotten favorable tax treatment on certain income received even though his service labor did not contribute to the profits of new investments by the firm. To what magnitude this lessens his tax burdens is not known, as Romney has not released his tax returns
Romney is a wealthy man. Of that there is no doubt. He made it the hard way — he earned it. To some, being too wealthy is somehow wrong. I do not begrudge his success. However, it is a legitimate question to ask how he stands on this particular issue. Would he support changes in the carried-interest provisions for tax policy, economic or social reasons?
It is hard to have crocodile tears for the hedge-fund and equity-fund managers and the like. They have made and continue to make enormous money, partially fueled by favorable tax treatment. “Enormous” may be even too small a word. Even the word “undeserving” comes to mind. I can say the same thing about entertainers, professional athletes, football coaches and lobbyists who do not share in the same tax breaks. However, that is part of the used-to-be-freer market system we have.
There are industries other than the financial sector where the carried-interest concept is ingrained and useful. Changes in tax policy and treatment is worth examining and a good place to start is asking Romney what he thinks.
Jack O. Nutter is a partner in the Washington, D.C., firm of Nutter & Harris. He is former tax counsel to the U.S. Senate Finance Committee. His further comments on tax, economic and political issues can be found at jacknutter.com.
More From MarketWatch
http://tourism9.com/ http://vkins.com/
Private equity consists of investors and funds that provide private companies with direct investments or conduct buyouts of public companies. These investments can be used to fund new start-up companies, expand working capital, make acquisitions, or improve a balance sheet. Private equity is one of the foundations of the capitalist system.
The majority of private equity consists of institutional and accredited investors who commit large sums of money for long periods of time. Private-equity investments often demand long holding periods to allow a turnaround of a distressed company or a liquidity event such as an initial public offering or sale to a public company. Indirectly, almost every American has a stake in the concept and results of private equity.
Mitt Romney owned and managed a private-equity firm called Bain Capital until retiring and being bought out in 1999. Listen to the political rhetoric; you would have thought he presided over the proceedings of the Spanish Inquisition.
This is not the place to debate or critique the dealings or role of private equity funds or Bain Capital. For that, the New York Times gives a good look. Instead, I want to discuss the tax treatment of such enterprises and to ask how such treatment may have affected Romney.
Most private-equity funds are organized as limited partnerships with the investors (pension funds, endowments, foundations and wealthy individuals) contributing capital and becoming limited partners with a general partner — such as Bain Capital — that provides the entrepreneurial management of the partnership. The general partner is paid a management fee.
The general partner may also contribute its own capital and, as an incentive, receives an additional interest in the overall eventual profits. This additional interest is known as the “promote,” “profits interest,” or “carried interest.” The carried interest is typically 20% of the profits and is generated from appreciation in the value of the partnership’s property realized when the enterprise is sold or taken public.
The tax treatment of carried interest under current law allows managers of hedge funds, private-equity funds, venture-capital funds and others to pay a lower 15% maximum income tax rate applied to investment income as capital gains, rather than higher income tax rates for ordinary income which exceed 35%. This is a huge difference.
How do they do that? It is complicated but starts with the taxation of partnerships. If you have an interest in a partnership, you are allocated a share of that partnership’s income. The income to the partner takes on the same character, such as capital gains, that it does in the partnership’s hands, and the partner is taxed on it accordingly. The partnership itself does not pay taxes.
Some investment partnerships, particularly in the private-equity industry, earn mostly capital gains by buying and selling shares in other companies. The managers of these companies thus receive their carried interest in the form of capital gains and pay capital-gains tax rather than ordinary income tax. Nifty trick!
Carried interest is a business and financial arrangement that has formed an essential structural element to almost every sector of the U.S. economy, including real-estate development, private equity, hedge funds, health care, mining, and oil and gas. Changes in the tax rules would have a profound impact on how these businesses operate and their structure.
Many policy makers believe the carried interest paid to partnership managers is really compensation for their management services, which should be taxed at the higher ordinary income rate. On the other side, supporters of the current tax treatment say the carried interest is only a potential share of partnership profits and should not be considered compensation for services.
Changes in the taxation of carried interest have passed a Democratic-controlled House of Representative three times since 2007 and the Obama administration has included a carried-interest tax increase in each of its annual federal budgets and even more recently in the American Jobs Act introduced last September, where the current law on carried interests was described as “an unfair and inefficient tax preference.”
So how does Mitt Romney fit in to all of this?
There is no question he has benefited and perhaps continues to benefit from the favorable tax treatment of the carried-interest provisions. As he retained a share of the “profits interest” after he left Bain Capital, Romney would have gotten favorable tax treatment on certain income received even though his service labor did not contribute to the profits of new investments by the firm. To what magnitude this lessens his tax burdens is not known, as Romney has not released his tax returns
Romney is a wealthy man. Of that there is no doubt. He made it the hard way — he earned it. To some, being too wealthy is somehow wrong. I do not begrudge his success. However, it is a legitimate question to ask how he stands on this particular issue. Would he support changes in the carried-interest provisions for tax policy, economic or social reasons?
It is hard to have crocodile tears for the hedge-fund and equity-fund managers and the like. They have made and continue to make enormous money, partially fueled by favorable tax treatment. “Enormous” may be even too small a word. Even the word “undeserving” comes to mind. I can say the same thing about entertainers, professional athletes, football coaches and lobbyists who do not share in the same tax breaks. However, that is part of the used-to-be-freer market system we have.
There are industries other than the financial sector where the carried-interest concept is ingrained and useful. Changes in tax policy and treatment is worth examining and a good place to start is asking Romney what he thinks.
Jack O. Nutter is a partner in the Washington, D.C., firm of Nutter & Harris. He is former tax counsel to the U.S. Senate Finance Committee. His further comments on tax, economic and political issues can be found at jacknutter.com.
More From MarketWatch
http://tourism9.com/ http://vkins.com/
2012年1月12日星期四
The Love Affair Between Politicians And Private Equity
Image via WikipediaAs Mitt Romney knows well, private equity and politics don’t always mix well during election season. The front runner for the Republican presidential nomination has been under attack from his Republican rivals because of his private equity roots. Newt Gingrich’s super PAC is releasing a short movie that attacks Romney for controversial private equity deals. “I am totally for capitalism,” Newt Gingrich recently said, “I do draw a distinction between [it] and looting a company.” Rick Perry has called Romney’s past private equity life a form of “vulture capitalism.”
But the fact is that politicians, both Republicans and Democrats, love the private equity industry. When Romney ran Bain Capital he was constantly searching for what private equity guys like to call an exit, which means selling a company for a big return. For a long time in Washington, the richest exit has been landing at a private equity firm, or in some cases, a hedge fund that makes private equity-like investments. Romney is only unique because he moved from the buyout business into politics and not the other way around.
The recent attacks on Romney have led to the inevitable debate about whether private equity is good for America. But there can be no debate about whether private equity is good for politicians once they leave the political arena. The New York Times recently highlighted the fact that Newt Gingrich himself was on the advisory board of Forstmann Little, a pioneering private equity firm. The truth is it is tough to find a former prominent politician who has not joined the private equity club.
In addition to Clinton, there is former Vice President Dan Quayle, who is chairman for global investments at Cerberus Capital Management, where former U.S. Treasury Secretary John Snow is chairman. Evan Bayh, the former Democratic Indiana senator and governor, is a senior advisor at Apollo Global Management. Rudy Giuliani was chairman of the advisory board of a Leeds Weld private equity fund, which was partly headed by former Massachusetts Governor William Weld. That private equity firm is now known as Leeds Equity Partners and the chair of its advisory board is Colin Powell. Two former U.S. education secretaries are also there.
David Stockman, a former congressman from Michigan and Ronald Reagan’s budget director, joined a private equity shop and eventually founded his own big-time private equity firm. Things did not work out for Stockman at Heartland Industrial Partners. He was indicted in connection with his role at a failed auto parts company, even though the federal government later dropped the charges.
Blackstone, the world’s biggest private equity firm, was co-founded by Pete Peterson, who was Secretary of Commerce during the Nixon Administration. Then there is the Carlyle Group, another massive private equity firm that has long been part of Washington mythology. Former President George H. W. Bush, former Secretary of State James Baker, former Defense Secretary Frank Carlucci, former Securities & Exchange Commission Chairman Arthur Levitt, and Bill Clinton’s White House chief of staff Mack McLarty, have all worked for Carlyle.
The private equity industry is one of the most lucrative places to work in America today. Buyout barons make huge political contributions. It is really hard to see this close relationship ending anytime soon.
http://tourism9.com/
2012年1月3日星期二
Liverpool and Tottenham’s new stadium plans hinge on raising funds from American investors
Tottenham and Liverpool are understood to be less likely to issue corporate bonds that could be publicly traded, preferring to target private investors for the specific purpose of financing new grounds.
Arsenal successfully employed this model to finance the Emirates.
The fund-raising plans at both clubs are running alongside the search for naming-rights sponsors, a market that promises to be crowded in 2012, with Chelsea and the Olympic Park also seeking stadium partners.
Both Spurs and Liverpool would hope to raise at least £150 million over 10 years from a sponsor, with Tottenham targeting closer to £200 million. Spurs are expected to attract interest from Chinese sponsors and have been linked with Qatar Airways.
The clubs could borrow against a naming rights deal to allow them to kick-start construction work, with the balance of the total cost coming from investors.
Tottenham have estimated that their new stadium development at Northumberland Park, adjacent to White Hart Lane, will require around £300 million in funding, which UK banks are highly unlikely to consider in the current climate.
There would be competition among banks to handle a private placement in the US, however, particularly given the involvement of the club’s ultimate backer, the billionaire financier Joe Lewis.
Lewis is a key player in Tottenham’s expansion plans but so far he has maintained his policy of allowing the club to stand on its own resources, rather than dipping into his own fortune to boost spending on players and facilities.
His wealth could be a significant factor in a successful fund-raising however, particularly if he agreed to underwrite or act as a guarantor in the process.
The search for private investment is understood to have been a factor in Tottenham’s decision to delist the club from the London stock exchange, a move agreed by the club’s shareholders last month. The move means the club is now privately owned, with the vast majority of shares held by Joe Lewis’s ENIC.
Liverpool’s planned new stadium in Stanley Park is expected to cost a similar amount to Tottenham’s new ground, with the club’s American owners, Fenway Sports Group, naturally examining fund-raising options at home as well as in the UK.
Officially the club are still considering the option of redeveloping Anfield, but their interest in financing options suggests that a new ground is the more likely option.
http://tourism9.com/
Arsenal successfully employed this model to finance the Emirates.
The fund-raising plans at both clubs are running alongside the search for naming-rights sponsors, a market that promises to be crowded in 2012, with Chelsea and the Olympic Park also seeking stadium partners.
Both Spurs and Liverpool would hope to raise at least £150 million over 10 years from a sponsor, with Tottenham targeting closer to £200 million. Spurs are expected to attract interest from Chinese sponsors and have been linked with Qatar Airways.
The clubs could borrow against a naming rights deal to allow them to kick-start construction work, with the balance of the total cost coming from investors.
Tottenham have estimated that their new stadium development at Northumberland Park, adjacent to White Hart Lane, will require around £300 million in funding, which UK banks are highly unlikely to consider in the current climate.
There would be competition among banks to handle a private placement in the US, however, particularly given the involvement of the club’s ultimate backer, the billionaire financier Joe Lewis.
Lewis is a key player in Tottenham’s expansion plans but so far he has maintained his policy of allowing the club to stand on its own resources, rather than dipping into his own fortune to boost spending on players and facilities.
His wealth could be a significant factor in a successful fund-raising however, particularly if he agreed to underwrite or act as a guarantor in the process.
The search for private investment is understood to have been a factor in Tottenham’s decision to delist the club from the London stock exchange, a move agreed by the club’s shareholders last month. The move means the club is now privately owned, with the vast majority of shares held by Joe Lewis’s ENIC.
Liverpool’s planned new stadium in Stanley Park is expected to cost a similar amount to Tottenham’s new ground, with the club’s American owners, Fenway Sports Group, naturally examining fund-raising options at home as well as in the UK.
Officially the club are still considering the option of redeveloping Anfield, but their interest in financing options suggests that a new ground is the more likely option.
http://tourism9.com/
Financing College Costs in 2012: Smart Tips
Most likely, your 529 plan and equity in your home are still down, but tuition keeps rising. Still, there’s money out there for students who need help with college financing. Here are 12 tips to help you attend school for less in 2012.
Go to college despite the job market
The year 2011 provided several arguments to skip college — high unemployment rates, tuition hikes and a harsh job market for grads. Go anyway.
“The jobs that are growing, the industries that are growing and the markets that are going to be available to students are those that require higher education,” says Brittania Morey, spokeswoman for the Iowa College Access Network. “Students who are choosing to go to college are preparing themselves for the work world of tomorrow.”
According to a 2010 report by Georgetown University, 63% of jobs offered by 2018 will require postsecondary education. Morey says students can cut college costs by searching for scholarships early and investigating awards in their community.
Don’t eliminate yourself
The biggest mistake students make is believing they’re not eligible for college aid. A 2009 study by Finaid.org showed that 2.3 million students who would have been eligible for the federal Pell Grant missed free college cash because they didn’t apply.
While students attending pricey institutions frequently apply for aid, the likelihood is lower at cheaper schools and community colleges, says Diana Fuentes-Michel, executive director of the California Student Aid Commission.
“That’s where folks tend to believe that they wouldn’t qualify for financial aid because of the low cost,” she says.
The U.S. Department of Education reports that all students, regardless of income or financial assets, are eligible for up to $27,000 in federal Stafford Loans over four years.
File for FAFSA fast
The Free Application for Federal Student Aid, or FAFSA, qualifies students for federal grants, loans and work-study jobs as well as some private and state-sponsored awards. Filing it as close to Jan. 1 as possible maximizes your college aid eligibility, says Lynda Forster, CEO of the financial aid consulting group Collegiate Capital Corp. in Mineola, N.Y.
“Most (families) think that financial aid forms must be completed after the tax returns are done, and that is not accurate,” she says. “You cannot wait until April. All of the money is already awarded.”
Since federal grants are distributed on a first-come, first-served basis, Forster recommends that families file the form using estimates of their income and assets. If they need to change something, families can file corrections at FAFSA.ed.gov.
Choose your major carefully
From private loan-forgiveness programs to state and federal grants, there’s money available to students majoring in high-demand fields. While the federal government offers up to $4,000 per year to future educators through the Teacher Education Assistance for College and Higher Education, or TEACH, Grant Program, individual states offer similar college financing initiatives for up-and-coming teachers, nurses, fire and emergency medical technicians, public defenders, child care employees, health care workers and those pursuing jobs in other fields.
Students who know their major can check with their school’s financial aid office to see if there are awards available in their fields. Professional organizations and nonprofits, such as the National Restaurant Association and the National Environmental Health Association, also offer awards to students in specific fields of study.
Find a ‘safety’ school
Guidance counselors recommend that students apply to an academically safe school. Martha Savery, director of community outreach for the Massachusetts Educational Financing Authority, recommends that students apply to a financially safe school, too.
“We always tell families (not to) self-select based on the cost that you see in the admissions material because many colleges and universities are able to provide a substantive financial aid package,” Savery says.
As of Oct. 29, all institutions that receive federal funding are required to post a net price calculator on their website that can help families estimate college costs with aid factored in, according to the National Center for Education Statistics. Students also can compare net prices of different schools by income level on the NCES website.
Meet the deadlines
With more students vying for aid, there’s stiff competition for dollars. Don’t eliminate yourself by missing a deadline, Savery says.
“If your child was applying for admission to XYZ university, you would not contact that admissions office and say ‘You know, I’d like just three or four more days just to tweak my essay,’” she says. “(Families) need to look at the deadlines from a financial aid perspective in exactly the same way.”
Ask the boss
A 2010 study by Business and Legal Resources, a compliance consulting firm in Old Saybrook, Conn., showed that nearly 85% of U.S. companies offer tuition reimbursement to employees. That’s up from 52% in 2007.
There are some pretty big catches. More than 75% of employers require that course work be job-related to qualify for reimbursement. Companies also may restrict how much reimbursement employees can get, require a certain grade point average or limit reimbursement to employees at a certain job level. More than 60% of companies offering reimbursement require employees to stay with the organization after completing study.
Go federal first
Federal loans are still the cheapest student loans. Through June 30, subsidized Stafford Loans will carry a 3.4% fixed interest rate. All Stafford Loans — subsidized, unsubsidized and grad loans included — disbursed after June 30 have a 6.8% fixed interest rate, according to the Department of Education. Stafford Loans are capped at $27,000 over four years for dependent students, but Morey says that federal loans to parents can help.
Through the Parent PLUS Loan, families can borrow up to the cost of attendance minus financial aid the student has received, and they’ll only pay 7.9% in interest — a rate that’s far below those of many private loans, according to DOE.
Cap those loans
Federal student loans also can be capped at 15% of a student’s “discretionary income.” That’s defined as earnings above 150% of the poverty line. For 2011, discretionary income would include earnings above $16,335 for a family of one, according to the Department of Health and Human Services. Earn less than $16,335, and the federal government won’t charge you anything for your student loan as long as your income stays below that threshold.
A double bonus is that students who make consecutive loan payments for 25 years will have their debt forgiven, according to the Oakland, Calif.-based Project on Student Debt. The time frame is reduced to 10 years for students who work in public-service professions such as teaching or social work after graduation.
Despite the tremendous potential savings, research shows that few students take advantage of the program. A White House fact sheet from October says that only about 1.3% of students with federal loans opt for income-based repayment.
Fight the hikes
Thanks to state budget cuts, tuition and fees at the average two- and four-year public institutions rose by about 7% this year, according to the College Board in New York. But in states such as Florida and California, prices at undergraduate state universities rose by 15% or more.
“The immediate kind of response to (tuition hikes) is to put it on a credit card or to look to their parents to try to get them to take a loan out,” says Fuentes-Michel.
The problem is that parents frequently can’t take on additional debt, and credit card interest rates are substantially higher than those of federal student loans. Instead of falling in the plastic trap, Fuentes-Michel recommends that students look to federal loans, private scholarships and part-time employment for college financing.
Save the right way
One of the strangest loopholes of financial aid is that how you save can impact your aid just as much as how much you save.
“Money put into a student’s name is not the place where you want to park it,” says Forster. “A student’s assets and income (are) counted much higher than a parent’s.”
While assets saved in a parent’s name can subtract up to 6 cents for every dollar from your federal need-based scholarships and grants package, every dollar of student assets takes away 20 cents, according to the White House’s National Economic Council. Money saved in a grandparent’s or relative’s name won’t count at all. However, 529 plans are one exception. Funds stored in a 529 plan in the student’s name count as parental assets, according to FinAid.org, the college financing resources website.
Reconsider 529 college savings plans
Many 529 plans lost value when the market dipped in 2008, but they’re coming back — this time with more conservative investment options. In the past two years, states including Nebraska and Indiana have added financial options insured by the Federal Deposit Insurance Corp. that allow parents to access 529 tax incentives without taking any market risks.
On top of providing federal tax-free growth, certain states also provide state tax incentives and matching grants to encourage account holders to save.
Copyright 2012, Bankrate Inc.
http://tourism9.com/
Go to college despite the job market
The year 2011 provided several arguments to skip college — high unemployment rates, tuition hikes and a harsh job market for grads. Go anyway.
“The jobs that are growing, the industries that are growing and the markets that are going to be available to students are those that require higher education,” says Brittania Morey, spokeswoman for the Iowa College Access Network. “Students who are choosing to go to college are preparing themselves for the work world of tomorrow.”
According to a 2010 report by Georgetown University, 63% of jobs offered by 2018 will require postsecondary education. Morey says students can cut college costs by searching for scholarships early and investigating awards in their community.
Don’t eliminate yourself
The biggest mistake students make is believing they’re not eligible for college aid. A 2009 study by Finaid.org showed that 2.3 million students who would have been eligible for the federal Pell Grant missed free college cash because they didn’t apply.
While students attending pricey institutions frequently apply for aid, the likelihood is lower at cheaper schools and community colleges, says Diana Fuentes-Michel, executive director of the California Student Aid Commission.
“That’s where folks tend to believe that they wouldn’t qualify for financial aid because of the low cost,” she says.
The U.S. Department of Education reports that all students, regardless of income or financial assets, are eligible for up to $27,000 in federal Stafford Loans over four years.
File for FAFSA fast
The Free Application for Federal Student Aid, or FAFSA, qualifies students for federal grants, loans and work-study jobs as well as some private and state-sponsored awards. Filing it as close to Jan. 1 as possible maximizes your college aid eligibility, says Lynda Forster, CEO of the financial aid consulting group Collegiate Capital Corp. in Mineola, N.Y.
“Most (families) think that financial aid forms must be completed after the tax returns are done, and that is not accurate,” she says. “You cannot wait until April. All of the money is already awarded.”
Since federal grants are distributed on a first-come, first-served basis, Forster recommends that families file the form using estimates of their income and assets. If they need to change something, families can file corrections at FAFSA.ed.gov.
Choose your major carefully
From private loan-forgiveness programs to state and federal grants, there’s money available to students majoring in high-demand fields. While the federal government offers up to $4,000 per year to future educators through the Teacher Education Assistance for College and Higher Education, or TEACH, Grant Program, individual states offer similar college financing initiatives for up-and-coming teachers, nurses, fire and emergency medical technicians, public defenders, child care employees, health care workers and those pursuing jobs in other fields.
Students who know their major can check with their school’s financial aid office to see if there are awards available in their fields. Professional organizations and nonprofits, such as the National Restaurant Association and the National Environmental Health Association, also offer awards to students in specific fields of study.
Find a ‘safety’ school
Guidance counselors recommend that students apply to an academically safe school. Martha Savery, director of community outreach for the Massachusetts Educational Financing Authority, recommends that students apply to a financially safe school, too.
“We always tell families (not to) self-select based on the cost that you see in the admissions material because many colleges and universities are able to provide a substantive financial aid package,” Savery says.
As of Oct. 29, all institutions that receive federal funding are required to post a net price calculator on their website that can help families estimate college costs with aid factored in, according to the National Center for Education Statistics. Students also can compare net prices of different schools by income level on the NCES website.
Meet the deadlines
With more students vying for aid, there’s stiff competition for dollars. Don’t eliminate yourself by missing a deadline, Savery says.
“If your child was applying for admission to XYZ university, you would not contact that admissions office and say ‘You know, I’d like just three or four more days just to tweak my essay,’” she says. “(Families) need to look at the deadlines from a financial aid perspective in exactly the same way.”
Ask the boss
A 2010 study by Business and Legal Resources, a compliance consulting firm in Old Saybrook, Conn., showed that nearly 85% of U.S. companies offer tuition reimbursement to employees. That’s up from 52% in 2007.
There are some pretty big catches. More than 75% of employers require that course work be job-related to qualify for reimbursement. Companies also may restrict how much reimbursement employees can get, require a certain grade point average or limit reimbursement to employees at a certain job level. More than 60% of companies offering reimbursement require employees to stay with the organization after completing study.
Go federal first
Federal loans are still the cheapest student loans. Through June 30, subsidized Stafford Loans will carry a 3.4% fixed interest rate. All Stafford Loans — subsidized, unsubsidized and grad loans included — disbursed after June 30 have a 6.8% fixed interest rate, according to the Department of Education. Stafford Loans are capped at $27,000 over four years for dependent students, but Morey says that federal loans to parents can help.
Through the Parent PLUS Loan, families can borrow up to the cost of attendance minus financial aid the student has received, and they’ll only pay 7.9% in interest — a rate that’s far below those of many private loans, according to DOE.
Cap those loans
Federal student loans also can be capped at 15% of a student’s “discretionary income.” That’s defined as earnings above 150% of the poverty line. For 2011, discretionary income would include earnings above $16,335 for a family of one, according to the Department of Health and Human Services. Earn less than $16,335, and the federal government won’t charge you anything for your student loan as long as your income stays below that threshold.
A double bonus is that students who make consecutive loan payments for 25 years will have their debt forgiven, according to the Oakland, Calif.-based Project on Student Debt. The time frame is reduced to 10 years for students who work in public-service professions such as teaching or social work after graduation.
Despite the tremendous potential savings, research shows that few students take advantage of the program. A White House fact sheet from October says that only about 1.3% of students with federal loans opt for income-based repayment.
Fight the hikes
Thanks to state budget cuts, tuition and fees at the average two- and four-year public institutions rose by about 7% this year, according to the College Board in New York. But in states such as Florida and California, prices at undergraduate state universities rose by 15% or more.
“The immediate kind of response to (tuition hikes) is to put it on a credit card or to look to their parents to try to get them to take a loan out,” says Fuentes-Michel.
The problem is that parents frequently can’t take on additional debt, and credit card interest rates are substantially higher than those of federal student loans. Instead of falling in the plastic trap, Fuentes-Michel recommends that students look to federal loans, private scholarships and part-time employment for college financing.
Save the right way
One of the strangest loopholes of financial aid is that how you save can impact your aid just as much as how much you save.
“Money put into a student’s name is not the place where you want to park it,” says Forster. “A student’s assets and income (are) counted much higher than a parent’s.”
While assets saved in a parent’s name can subtract up to 6 cents for every dollar from your federal need-based scholarships and grants package, every dollar of student assets takes away 20 cents, according to the White House’s National Economic Council. Money saved in a grandparent’s or relative’s name won’t count at all. However, 529 plans are one exception. Funds stored in a 529 plan in the student’s name count as parental assets, according to FinAid.org, the college financing resources website.
Reconsider 529 college savings plans
Many 529 plans lost value when the market dipped in 2008, but they’re coming back — this time with more conservative investment options. In the past two years, states including Nebraska and Indiana have added financial options insured by the Federal Deposit Insurance Corp. that allow parents to access 529 tax incentives without taking any market risks.
On top of providing federal tax-free growth, certain states also provide state tax incentives and matching grants to encourage account holders to save.
Copyright 2012, Bankrate Inc.
http://tourism9.com/
2012年1月2日星期一
Veresen Announces $920 Million Investment in the Montney with Strategic Acquisition of Canadian Midstream Assets and …
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
Veresen Provides 2012 Guidance and Hosts Conference Call and Webcast
Hythe Gas Processing Plant (CNW Group/Veresen Inc.)CALGARY, Dec. 7, 2011 /CNW/ – Veresen Inc. (“Veresen”) (TSX: VSN.TO – News) is pleased to announce today that, through a wholly-owned subsidiary, it has entered into agreements with Encana Corporation (“Encana”) (TSX, NYSE: ECA) to acquire the Hythe/Steeprock midstream gas gathering and processing complex for $920 million. These assets are located in the Cutbank Ridge region of Alberta and British Columbia. Natural gas and natural gas liquids in the region are produced from the prolific Montney, Cadomin and other geological formations.
The Hythe/Steeprock complex includes two natural gas processing plants with combined functional capacity of 516 MMcf/d as well as approximately 40,000 hp of compression and 370 km of gas gathering lines. The Hythe plant processes both sour and sweet natural gas, while the Steeprock plant is a sour gas processing facility.
In connection with the transaction, Veresen and Encana have entered into a long-term Midstream Services Agreement under which Encana will provide a competitive, long-term, take-or-pay throughput commitment averaging 370 MMcf/d, representing 72 percent of the functional capacity of the Hythe/Steeprock complex.
Veresen will become the operator of the two interconnected gas processing plants following a transition period between Veresen and Encana. Veresen expects to retain all operational employees at the processing plants. Encana will be the contract operator of the compression and gas gathering system acquired by Veresen. This will allow Encana to coordinate its drilling program and natural gas production in the area with requisite development of the Hythe/Steeprock gathering system.
“This transaction establishes a high-quality, independent natural gas midstream business for Veresen which we expect will generate attractive returns and make a significant contribution to our cash flow,” said Stephen White, President and Chief Executive Officer. “The Hythe/Steeprock complex is strategically located in the heart of a high-growth region focused on Montney drilling, and is underpinned by a competitive, long-term gathering and processing fee agreement with an outstanding producer partner in Encana.”
“In an active and highly-competitive midstream landscape, we remain focused on our strategy of growing our business through the selective development and acquisition of contracted, high-quality, long-life infrastructure assets that generate stable cash flows. This acquisition is aligned with our business model and offers strength, stability and growth over the long term.”
Mr. White added, “Concurrent with this transaction, we are pleased to announce we have entered into a $303 million bought deal financing which, together with our strong balance sheet and sources of credit, will successfully fund this acquisition.”
This transaction is expected to close in the first quarter of 2012 and is subject to normal closing conditions, including receipt of normal course approval under the Competition Act. A small portion of the assets are subject to National Energy Board (“NEB”) regulation, and closing for the transaction related to these assets will occur at a later point when NEB approval is obtained.
Acquisition Highlights
Key investment highlights of the Hythe/Steeprock complex acquisition are as follows:
High-Quality Assets
For 2012, and including the impact of the Hythe/Steeprock acquisition, Veresen is forecasting distributable cash in the range of $1.15 to $1.50 per common share. Based upon a forecast annual dividend payout of $1.00 per common share, the corresponding payout ratio for 2012 will be between 67 and 87 percent.
“The year-over-year increase in our distributable cash demonstrates that our strategy is working,” commented Stephen White. “Over the past two years, we have made significant capital investments in our midstream business, including the Palermo Gas Plant, the Prairie Rose Pipeline, and the Heartland off-gas facility, and in our Power business including the York Energy Centre, which are creating long-term shareholder value.”
For 2011, Veresen maintains its previously announced guidance for distributable cash of $1.16 to $1.30 per share, resulting in a payout ratio of 82 to 86 percent. Further details regarding 2011 and 2012 guidance can be found in the Investor Information section of Veresen’s website at www.vereseninc.com.
Acquisition Funding
Funding for the acquisition is expected to be provided from a combination of equity and debt, specifically: (i) the net proceeds from the subscription receipt offering; (ii) $250 million from new senior credit facilities; (iii) the balance of approximately $370 million under Veresen’s existing revolving credit facility; and (iv) ongoing funding derived from equity raised under Veresen’s Premium Dividend™ and Dividend Reinvestment Plan. Veresen intends to refinance the acquisition-related borrowings through various capital market instruments during 2012.
Subscription Receipt Offering
Veresen has agreed to sell, on a bought deal basis, an aggregate of 21,500,000 subscription receipts at a price of $14.10 per subscription receipt for gross proceeds of approximately $303 million. The subscription receipts will be offered through a syndicate of investment dealers led by TD Securities Inc., bookrunner, and co-led by CIBC World Markets Inc. and Scotia Capital Inc., under Veresen’s Short Form Base Shelf Prospectus dated August 22, 2011, and a prospectus supplement to the Short Form Base Shelf Prospectus to be dated on or about December 9, 2011. Veresen has also granted the underwriters an option to purchase, in whole or part, up to an additional 3,225,000 subscription receipts for a price of $14.10 per subscription agreement to cover over-allotments, if any, for a period of 30 days following the closing of the offering. If the acquisition closes prior to the exercise of the over-allotment option, the over-allotment option will be exercisable in respect of an equivalent number of common shares. If the over-allotment option is exercised in full, gross proceeds from the offering will be approximately $349 million.
Each subscription receipt will entitle the holder thereof to receive, concurrent with closing of the acquisition and upon satisfaction of certain escrow release conditions, one common share of Veresen plus an amount equal to the dividends Veresen declares on the common shares, if any, for record dates which occur during the period from the closing date of the offering to the date of issuance of the common shares issuable on the deemed exercise of the subscription receipts, net of any applicable withholding taxes.
The gross proceeds from the sale of the subscription receipts will be held by an escrow agent pending, among other things, receipt of all regulatory and government approvals required to finalize the Hythe/Steeprock acquisition and fulfillment or waiver of all other outstanding conditions precedent to closing the acquisition. In the event such approvals and conditions are not satisfied prior to 5:00 p.m. (Calgary time) on April 30, 2012, or if the asset purchase agreement is terminated prior to such time, the holders of the subscription receipts will be entitled to receive an amount equal to the full subscription price thereof plus their pro rata share of the interest earned on such amount.
The offering is subject to the receipt of all necessary regulatory and stock exchange approvals. Closing of the offering is expected to occur on or about December 16, 2011.
New Non-Revolving Term Credit Facilities
In connection with the acquisition of the Hythe/Steeprock complex, Veresen has obtained a commitment from a Canadian chartered bank to provide two non-revolving term credit facilities in the aggregate amount of $500 million. These new credit facilities will rank equally with Veresen’s senior unsecured obligations and will have a one year term subject to mandatory reductions from the net proceeds of certain debt and equity issuances (including from the net proceeds from the sale of the subscription receipts) and asset dispositions. Subject to the satisfaction of certain conditions precedent customary for a financing of this type, funds will be available by way of a single draw on the closing of the acquisition. The new credit facilities will contain terms that are customary for bank credit facilities of this nature.
Premium Dividend™ and Dividend Reinvestment Plan
Commencing with the cash dividend payable to shareholders of record on December 30, 2011, Veresen intends to permit eligible shareholders who are enrolled in its Premium Dividend™ and Dividend Reinvestment Plan to participate in the Premium Dividend™ component. This will entitle participating shareholders to receive a premium cash payment equal to 102 percent of the cash dividend that such shareholders would otherwise be entitled to receive on the applicable dividend payment date. Further details about how to participate in the Plan will be provided when Veresen announces its December 2011 dividend.
Conference Call Advisory
Veresen will host a conference call and webcast to discuss the Hythe/Steeprock acquisition today at 2:00 p.m. MT (4:00 p.m. ET). A presentation will be available prior to the conference call at www.vereseninc.com.
Dial-in: 1 (888) 231-8191 or 1 (647) 427-7450 conference ID 34701373
Webcast: http://event.on24.com/r.htm?e=387346&s=1&k=9CDE3C7953F2CB1CD49FD0374D26B590
™ denotes trademark of Canaccord Genuity Corp.
A replay of the call will be available from 4:00 p.m. MT (6:00 pm ET) on December 7, 2011 by dialing 1-855-859-2056 and 1-416-849-0833. The passcode is 34701373, followed by the pound sign. The replay will expire at midnight (ET) on December 14, 2011. The webcast will be archived for one year.
This news release does not constitute an offer to sell or the solicitation of an offer to buy the subscription receipts in the United States, in any province or territory of Canada or in any other jurisdiction. The subscription receipts to be offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws and may not be offered or sold in the United States absent registration or absent an applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. There shall be no sale of the subscription receipts in any jurisdiction in which an offer to sell, a solicitation of an offer to buy or a sale would be unlawful.
About Veresen Inc.
Veresen is a publicly-traded dividend paying corporation based in Calgary, Alberta, that owns and operates energy infrastructure assets across North America. Veresen is engaged in three principal businesses: a pipeline transportation business comprised of interests in two pipeline systems, the Alliance Pipeline and the Alberta Ethane Gathering System; a midstream business which includes ownership interests in a world-class natural gas liquids extraction facility near Chicago and other natural gas and NGL processing energy infrastructure; and a power business with renewable and gas-fired facilities and development projects in Canada and the United States, and district energy systems in Ontario and Prince Edward Island. Veresen and each of its pipeline, midstream and power businesses are also actively developing a number of greenfield projects. In the normal course of its business, Veresen and each of its businesses regularly evaluate and pursue acquisition and development opportunities.
Veresen’s common shares and 5.75% convertible unsecured subordinated debentures, Series C due July 31, 2017 are listed on the Toronto Stock Exchange under the symbols “VSN” and VSN.DB.C”, respectively. For further information, please visit www.vereseninc.com.
Resource Disclosure
Resource estimates in this News Release have an effective date of December 31, 2011 and have been prepared by GLJ, independent qualified reserves evaluators, in accordance with the Canadian Oil and Gas Evaluation Handbook (the “COGE Handbook”).
“Resources” are quantities of recoverable natural gas that have not met the reserves requirements at the time of the estimate. “Contingent Resources” are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. Contingent resources are further classified in accordance with the level of certainty associated with the estimates and may be sub-classified based on economic status. There are three categories in evaluating Contingent Resources: Low Estimate, Best Estimate and High Estimate. The resource estimates presented in this News Release all refer to the Best Estimate category. Best Estimate is a classification of resources described in the COGE Handbook as being considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the Best Estimate. If probabilistic methods are used, there should be a 50% probability (P50) that the quantities actually recovered will equal or exceed the Best Estimate. There is no certainty that it will be commercially viable to produce any portion of the contingent resources disclosed in this News Release.
Forward-Looking Information
Certain information contained herein relating to, but not limited to, Veresen and its businesses, the acquisition, the offering of the subscription receipts and the entering into of the new credit facilities, constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that Veresen expects or anticipates may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as “may”, “estimate”, “anticipate”, “believe”, “expect”, “plan”, “intend”, “target”, “project”, “forecast” or similar words suggesting future outcomes or outlook. Forward-looking statements in this news release include, but are not limited to, statements with respect to the timing of closing of the acquisition of the Hythe/Steeprock complex, the sources of financing of the acquisition, the timing of the completion of the subscription receipt offering and new credit facilities, the anticipated retention of operational employees, the use of the proceeds of the subscription receipt offering, the average take-or-pay volumes under the Midstream Services Agreement, average annual fees from the Hythe/Steeprock complex over the next five years, expected returns and contributions to cash flow from the acquisition, contingent resources in the Cutbank Ridge region, potential future increases in production in the Cutbank Ridge region, the impact of Hythe/Steeprock complex acquisition on Veresen’s tax horizon, opportunities for future midstream infrastructure investment,Veresen’s plan to provide for the premium cash payment under its Premium Dividend™ and Dividend Reinvestment Plan and Veresen’s forecast of 2012 and 2011 distributable cash, annual dividend payment and dividend payout ratio. The forward-looking information included herein involves significant risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to, risks relating to closing of the acquisition, the potential for undisclosed liabilities associated with the acquisition, realizing the expected benefits from the acquisition, increased indebtedness as a result of completing the acquisition and the availability of the new senior credit facilities. Additional information on risks, uncertainties and factors that could affect the foregoing forward-looking information and/or Veresen’s operations or financial results is included in its filings with the securities commissions or similar authorities in each of the provinces of Canada, as may be updated from time to time and will be included in the prospectus supplement relating to the offering. Readers are also cautioned that such additional information is not exhaustive. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are independent and management’s future course of action would depend on its assessment of all information at that time. Although Veresen believes that the expectations conveyed by the forward-looking information are reasonable based on information available on the date of preparation, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the information contained herein, as actual results achieved will vary from the information provided herein and the variations may be material. Veresen makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof, and Veresen does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable laws. Any forward-looking information contained herein is expressly qualified by this cautionary statement.
Steeprock Gas Processing Plant (CNW Group/Veresen Inc.)Image with caption: “Hythe Gas Processing Plant (CNW Group/Veresen Inc.)”. Image available at: http://photos.newswire.ca/images/download/20111207_C4877_PHOTO_EN_7932.jpg
Image with caption: “Steeprock Gas Processing Plant (CNW Group/Veresen Inc.)”. Image available at: http://photos.newswire.ca/images/download/20111207_C4877_PHOTO_EN_7933.jpg
Stephen H. WhiteVeresen Provides 2012 Guidance and Hosts Conference Call and Webcast
Hythe Gas Processing Plant (CNW Group/Veresen Inc.)The Hythe/Steeprock complex includes two natural gas processing plants with combined functional capacity of 516 MMcf/d as well as approximately 40,000 hp of compression and 370 km of gas gathering lines. The Hythe plant processes both sour and sweet natural gas, while the Steeprock plant is a sour gas processing facility.
In connection with the transaction, Veresen and Encana have entered into a long-term Midstream Services Agreement under which Encana will provide a competitive, long-term, take-or-pay throughput commitment averaging 370 MMcf/d, representing 72 percent of the functional capacity of the Hythe/Steeprock complex.
Veresen will become the operator of the two interconnected gas processing plants following a transition period between Veresen and Encana. Veresen expects to retain all operational employees at the processing plants. Encana will be the contract operator of the compression and gas gathering system acquired by Veresen. This will allow Encana to coordinate its drilling program and natural gas production in the area with requisite development of the Hythe/Steeprock gathering system.
“This transaction establishes a high-quality, independent natural gas midstream business for Veresen which we expect will generate attractive returns and make a significant contribution to our cash flow,” said Stephen White, President and Chief Executive Officer. “The Hythe/Steeprock complex is strategically located in the heart of a high-growth region focused on Montney drilling, and is underpinned by a competitive, long-term gathering and processing fee agreement with an outstanding producer partner in Encana.”
“In an active and highly-competitive midstream landscape, we remain focused on our strategy of growing our business through the selective development and acquisition of contracted, high-quality, long-life infrastructure assets that generate stable cash flows. This acquisition is aligned with our business model and offers strength, stability and growth over the long term.”
Mr. White added, “Concurrent with this transaction, we are pleased to announce we have entered into a $303 million bought deal financing which, together with our strong balance sheet and sources of credit, will successfully fund this acquisition.”
This transaction is expected to close in the first quarter of 2012 and is subject to normal closing conditions, including receipt of normal course approval under the Competition Act. A small portion of the assets are subject to National Energy Board (“NEB”) regulation, and closing for the transaction related to these assets will occur at a later point when NEB approval is obtained.
Acquisition Highlights
Key investment highlights of the Hythe/Steeprock complex acquisition are as follows:
High-Quality Assets
- Establishes an independent midstream business for Veresen in an area focused on the high-growth Montney zone, one of North America’s most prolific, low-cost natural gas and NGL plays.
- High-quality, of-scale facilities including the Steeprock gas plant (198 MMcf/d sour), the Hythe gas plant (340 MMcf/d sweet, 176, MMcf/d sour), approximately 40,000 hp of sweet and sour compression, and 370 km of gathering lines.
- Connections to the Alliance and TransCanada pipeline systems.
- Long-life energy infrastructure assets with contracted, stable, fee-for-service cash flow.
- Investment grade counterparty.
- No exposure to commodity price fluctuations.
- Minimum average annual committed gathering and processing fees over the first five years of over $72 million, net of operating and maintenance costs; potential for additional fees from non-committed or third party volumes.
- The transaction is immediately accretive to distributable cash per share, with accretion increasing over time.
- With this transaction, Veresen estimates its Canadian tax horizon will be extended to approximately 2019.
- Cutbank Ridge is one of Encana’s key resource plays with more than 1 million acres of land and in excess of 500 MMcf/d of production.
- Total recoverable natural gas in proximity to the Hythe/Steeprock complex, including Encana and third party gas, has been estimated by GLJ Petroleum Consultants (“GLJ”), independent qualified reserves evaluators, to be 26 tcf of best estimate contingent resources.
- Based on GLJ’s assessment of best estimate of contingent resources, regional gas production could increase by approximately 2 billion cubic feet per day over the next 20 years, providing significant midstream infrastructure expansion opportunities for Veresen.
For 2012, and including the impact of the Hythe/Steeprock acquisition, Veresen is forecasting distributable cash in the range of $1.15 to $1.50 per common share. Based upon a forecast annual dividend payout of $1.00 per common share, the corresponding payout ratio for 2012 will be between 67 and 87 percent.
“The year-over-year increase in our distributable cash demonstrates that our strategy is working,” commented Stephen White. “Over the past two years, we have made significant capital investments in our midstream business, including the Palermo Gas Plant, the Prairie Rose Pipeline, and the Heartland off-gas facility, and in our Power business including the York Energy Centre, which are creating long-term shareholder value.”
For 2011, Veresen maintains its previously announced guidance for distributable cash of $1.16 to $1.30 per share, resulting in a payout ratio of 82 to 86 percent. Further details regarding 2011 and 2012 guidance can be found in the Investor Information section of Veresen’s website at www.vereseninc.com.
Acquisition Funding
Funding for the acquisition is expected to be provided from a combination of equity and debt, specifically: (i) the net proceeds from the subscription receipt offering; (ii) $250 million from new senior credit facilities; (iii) the balance of approximately $370 million under Veresen’s existing revolving credit facility; and (iv) ongoing funding derived from equity raised under Veresen’s Premium Dividend™ and Dividend Reinvestment Plan. Veresen intends to refinance the acquisition-related borrowings through various capital market instruments during 2012.
Subscription Receipt Offering
Veresen has agreed to sell, on a bought deal basis, an aggregate of 21,500,000 subscription receipts at a price of $14.10 per subscription receipt for gross proceeds of approximately $303 million. The subscription receipts will be offered through a syndicate of investment dealers led by TD Securities Inc., bookrunner, and co-led by CIBC World Markets Inc. and Scotia Capital Inc., under Veresen’s Short Form Base Shelf Prospectus dated August 22, 2011, and a prospectus supplement to the Short Form Base Shelf Prospectus to be dated on or about December 9, 2011. Veresen has also granted the underwriters an option to purchase, in whole or part, up to an additional 3,225,000 subscription receipts for a price of $14.10 per subscription agreement to cover over-allotments, if any, for a period of 30 days following the closing of the offering. If the acquisition closes prior to the exercise of the over-allotment option, the over-allotment option will be exercisable in respect of an equivalent number of common shares. If the over-allotment option is exercised in full, gross proceeds from the offering will be approximately $349 million.
Each subscription receipt will entitle the holder thereof to receive, concurrent with closing of the acquisition and upon satisfaction of certain escrow release conditions, one common share of Veresen plus an amount equal to the dividends Veresen declares on the common shares, if any, for record dates which occur during the period from the closing date of the offering to the date of issuance of the common shares issuable on the deemed exercise of the subscription receipts, net of any applicable withholding taxes.
The gross proceeds from the sale of the subscription receipts will be held by an escrow agent pending, among other things, receipt of all regulatory and government approvals required to finalize the Hythe/Steeprock acquisition and fulfillment or waiver of all other outstanding conditions precedent to closing the acquisition. In the event such approvals and conditions are not satisfied prior to 5:00 p.m. (Calgary time) on April 30, 2012, or if the asset purchase agreement is terminated prior to such time, the holders of the subscription receipts will be entitled to receive an amount equal to the full subscription price thereof plus their pro rata share of the interest earned on such amount.
The offering is subject to the receipt of all necessary regulatory and stock exchange approvals. Closing of the offering is expected to occur on or about December 16, 2011.
New Non-Revolving Term Credit Facilities
In connection with the acquisition of the Hythe/Steeprock complex, Veresen has obtained a commitment from a Canadian chartered bank to provide two non-revolving term credit facilities in the aggregate amount of $500 million. These new credit facilities will rank equally with Veresen’s senior unsecured obligations and will have a one year term subject to mandatory reductions from the net proceeds of certain debt and equity issuances (including from the net proceeds from the sale of the subscription receipts) and asset dispositions. Subject to the satisfaction of certain conditions precedent customary for a financing of this type, funds will be available by way of a single draw on the closing of the acquisition. The new credit facilities will contain terms that are customary for bank credit facilities of this nature.
Premium Dividend™ and Dividend Reinvestment Plan
Commencing with the cash dividend payable to shareholders of record on December 30, 2011, Veresen intends to permit eligible shareholders who are enrolled in its Premium Dividend™ and Dividend Reinvestment Plan to participate in the Premium Dividend™ component. This will entitle participating shareholders to receive a premium cash payment equal to 102 percent of the cash dividend that such shareholders would otherwise be entitled to receive on the applicable dividend payment date. Further details about how to participate in the Plan will be provided when Veresen announces its December 2011 dividend.
Conference Call Advisory
Veresen will host a conference call and webcast to discuss the Hythe/Steeprock acquisition today at 2:00 p.m. MT (4:00 p.m. ET). A presentation will be available prior to the conference call at www.vereseninc.com.
Dial-in: 1 (888) 231-8191 or 1 (647) 427-7450 conference ID 34701373
Webcast: http://event.on24.com/r.htm?e=387346&s=1&k=9CDE3C7953F2CB1CD49FD0374D26B590
™ denotes trademark of Canaccord Genuity Corp.
A replay of the call will be available from 4:00 p.m. MT (6:00 pm ET) on December 7, 2011 by dialing 1-855-859-2056 and 1-416-849-0833. The passcode is 34701373, followed by the pound sign. The replay will expire at midnight (ET) on December 14, 2011. The webcast will be archived for one year.
This news release does not constitute an offer to sell or the solicitation of an offer to buy the subscription receipts in the United States, in any province or territory of Canada or in any other jurisdiction. The subscription receipts to be offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws and may not be offered or sold in the United States absent registration or absent an applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. There shall be no sale of the subscription receipts in any jurisdiction in which an offer to sell, a solicitation of an offer to buy or a sale would be unlawful.
About Veresen Inc.
Veresen is a publicly-traded dividend paying corporation based in Calgary, Alberta, that owns and operates energy infrastructure assets across North America. Veresen is engaged in three principal businesses: a pipeline transportation business comprised of interests in two pipeline systems, the Alliance Pipeline and the Alberta Ethane Gathering System; a midstream business which includes ownership interests in a world-class natural gas liquids extraction facility near Chicago and other natural gas and NGL processing energy infrastructure; and a power business with renewable and gas-fired facilities and development projects in Canada and the United States, and district energy systems in Ontario and Prince Edward Island. Veresen and each of its pipeline, midstream and power businesses are also actively developing a number of greenfield projects. In the normal course of its business, Veresen and each of its businesses regularly evaluate and pursue acquisition and development opportunities.
Veresen’s common shares and 5.75% convertible unsecured subordinated debentures, Series C due July 31, 2017 are listed on the Toronto Stock Exchange under the symbols “VSN” and VSN.DB.C”, respectively. For further information, please visit www.vereseninc.com.
Resource Disclosure
Resource estimates in this News Release have an effective date of December 31, 2011 and have been prepared by GLJ, independent qualified reserves evaluators, in accordance with the Canadian Oil and Gas Evaluation Handbook (the “COGE Handbook”).
“Resources” are quantities of recoverable natural gas that have not met the reserves requirements at the time of the estimate. “Contingent Resources” are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. Contingent resources are further classified in accordance with the level of certainty associated with the estimates and may be sub-classified based on economic status. There are three categories in evaluating Contingent Resources: Low Estimate, Best Estimate and High Estimate. The resource estimates presented in this News Release all refer to the Best Estimate category. Best Estimate is a classification of resources described in the COGE Handbook as being considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the Best Estimate. If probabilistic methods are used, there should be a 50% probability (P50) that the quantities actually recovered will equal or exceed the Best Estimate. There is no certainty that it will be commercially viable to produce any portion of the contingent resources disclosed in this News Release.
Forward-Looking Information
Certain information contained herein relating to, but not limited to, Veresen and its businesses, the acquisition, the offering of the subscription receipts and the entering into of the new credit facilities, constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that Veresen expects or anticipates may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as “may”, “estimate”, “anticipate”, “believe”, “expect”, “plan”, “intend”, “target”, “project”, “forecast” or similar words suggesting future outcomes or outlook. Forward-looking statements in this news release include, but are not limited to, statements with respect to the timing of closing of the acquisition of the Hythe/Steeprock complex, the sources of financing of the acquisition, the timing of the completion of the subscription receipt offering and new credit facilities, the anticipated retention of operational employees, the use of the proceeds of the subscription receipt offering, the average take-or-pay volumes under the Midstream Services Agreement, average annual fees from the Hythe/Steeprock complex over the next five years, expected returns and contributions to cash flow from the acquisition, contingent resources in the Cutbank Ridge region, potential future increases in production in the Cutbank Ridge region, the impact of Hythe/Steeprock complex acquisition on Veresen’s tax horizon, opportunities for future midstream infrastructure investment,Veresen’s plan to provide for the premium cash payment under its Premium Dividend™ and Dividend Reinvestment Plan and Veresen’s forecast of 2012 and 2011 distributable cash, annual dividend payment and dividend payout ratio. The forward-looking information included herein involves significant risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to, risks relating to closing of the acquisition, the potential for undisclosed liabilities associated with the acquisition, realizing the expected benefits from the acquisition, increased indebtedness as a result of completing the acquisition and the availability of the new senior credit facilities. Additional information on risks, uncertainties and factors that could affect the foregoing forward-looking information and/or Veresen’s operations or financial results is included in its filings with the securities commissions or similar authorities in each of the provinces of Canada, as may be updated from time to time and will be included in the prospectus supplement relating to the offering. Readers are also cautioned that such additional information is not exhaustive. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are independent and management’s future course of action would depend on its assessment of all information at that time. Although Veresen believes that the expectations conveyed by the forward-looking information are reasonable based on information available on the date of preparation, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the information contained herein, as actual results achieved will vary from the information provided herein and the variations may be material. Veresen makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof, and Veresen does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable laws. Any forward-looking information contained herein is expressly qualified by this cautionary statement.
Steeprock Gas Processing Plant (CNW Group/Veresen Inc.)Image with caption: “Steeprock Gas Processing Plant (CNW Group/Veresen Inc.)”. Image available at: http://photos.newswire.ca/images/download/20111207_C4877_PHOTO_EN_7933.jpg
President and CEO
Richard G. Weech
Senior Vice President
Finance and CFO
David I. Holm
Executive Vice President
Corporate and Business Development
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