George's Feed
Dec 21, 2010

RBS should pay no cash bonuses for 2010

– The author is a Reuters Breakingviews columnist. The opinions
– The author is a Reuters Breakingviews columnist. The opinions
expressed are his own –

By George Hay

LONDON, Dec 21 (Reuters Breakingviews) – Royal Bank of
Scotland (RBS.L: Quote, Profile, Research) should scrap cash bonuses for 2010. Last year,
the board of the all-but-nationalised lender nearly quit
following a clash with the UK government over how much to pay
its investment bankers. Something big is needed to avoid a
similar drama this time around.

Nov 24, 2010
via Breakingviews

Irish bank restructuring has tidy if slow solution

Ireland’s bloated banking sector needs fewer, smaller lenders. A sovereign bailout should provide breathing space to perform a radical restructuring. But a fire sale of Irish banking assets is not the only way to cut the banks down to size.

The combined liabilities of Ireland’s domestic lenders, both private and state owned, exceed 500 billion euros, or four times Irish GDP. The country’s likely 90 billion euro bailout will deliver resources to recapitalize the banks and guarantee wholesale funding for several years. In that time, the sector could be redrawn.

Nov 17, 2010
via Breakingviews

Irish bank rescue could cost over 100 bln euros

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

An Irish bank rescue could cost over 100 billion euros. That’s the rough amount needed to fund Allied Irish Banks, Bank of Ireland and Anglo Irish Bank for three years, while recapitalising them to a point where they might regain the confidence of the markets. But the euro zone may not actually have to shell out anything like that much.

Nov 4, 2010
via Breakingviews

Buffett may struggle to repeat his Swiss Re exit

Warren Buffett may struggle to repeat his Swiss Re exit. The legendary investor bailed out three big beasts during the financial crisis: the Swiss insurer, GE and Goldman Sachs. The Sage of Omaha has allowed Swiss Re to buy back its expensive convertible stock early. He may have less scope to be as generous with the other two.

Of the three deals, Buffett’s $3.1 billion investment in Swiss Re convertible shares had the most strings attached. Negotiated at the depths of the market slump, the stock paid a 12 percent annual coupon until March 2012, when it would convert into ordinary shares at a price of 25 Swiss francs.

Oct 14, 2010

Barclays eyes new bond to meet capital demands

LONDON, Oct 14 (Reuters) – Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) is working on a
new capital instrument that would allow it to meet regulators’
capital demands without issuing equity, a person familiar with
the situation has told Reuters Breakingviews.

The UK bank is examining a debt instrument that has been
dubbed a “step down, step up” bond. If the bank’s core Tier 1
ratio fell below 7 percent, holders would suffer a haircut of as
much as 30 percent.

Oct 12, 2010

Tribune widens deal to help it exit bankruptcy

WILMINGTON, Delaware (Reuters) – Tribune Co said on Tuesday it reached agreement with more parties to its bankruptcy as it tries to bring its publishing and broadcasting business out of Chapter 11.

JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) and unsecured creditors joined a settlement the company previously reached with two hedge funds that hold a large part of it senior loans.

Oct 9, 2010

Gulf Coast attorneys to lead U.S. oil spill lawsuits

WILMINGTON, Delaware (Reuters) – Four attorneys from Texas, Louisiana and Florida were appointed on Friday to a committee to lead the hundreds of oil spill-related lawsuits against BP Plc and its partners, according to court documents.

The committee will coordinate the activities of the 15-member plaintiffs’ steering committee that was also appointed on Friday by Judge Carl Barbier.

Oct 7, 2010

Restructuring loans hard to get without fee deals

NEW YORK (Reuters) – Companies that are restructuring are struggling to get revolving loans from lenders, and they often have to strike deals that allow banks to earn other fees, restructuring advisers said on Thursday.

“Getting banks to commit to revolvers without lots and lots of other fee opportunities tied to it? Very hard,” William Derrough, a managing director at Moelis & Co, told the Reuters Restructuring Summit in New York.

Oct 6, 2010

Ailing U.S. cities unlikely to go bankrupt

NEW YORK (Reuters) – Cities and local governments that are struggling with gaping budget holes and piles of debt will likely raise taxes and cut services rather than resort to bankruptcy, restructuring experts said on Wednesday.

The city of Vallejo in California and a toll road operator in South Carolina are among the few to file for bankruptcy under Chapter 9, the part of the bankruptcy code for government entities.

Oct 4, 2010

Air Products opens court fight in Airgas deal bid

, Oct 4 (Reuters) – Air Products &
Chemicals Inc (APD.N: Quote, Profile, Research, Stock Buzz) took its $5.5 billion hostile bid for
smaller rival Airgas Inc (ARG.N: Quote, Profile, Research, Stock Buzz) to court on Monday, arguing
that the takeover target was ignoring the will of its
shareholders by refusing to negotiate.

The companies have filed lawsuits against each other, and a
third lawsuit brought by Airgas shareholders against the
company’s board also is being heard in a week-long trial.

    • About George

      "George Hay coordinates European financial coverage and writes about macroeconomics, the euro zone and UK/European financial policy. He covered European banks for Breakingviews during the financial crisis, and has also worked as a correspondent for AFX News and at United Business Media. He attended Edinburgh University and his work has been recognised at the UK’s Business Journalist of the Year Awards. Follow George on Twitter @gfhay"
    • Follow George