Deutsche Bank, the underdog in the race to run the IPO of a large AIG unit, has come out on top.

The German bank has been chosen as one of two global coordinators to run the IPO of American International Assurance (AIA), beating out Goldman Sachs and Citigroup, which ran the aborted auction of the Asian life insurer earlier this year.

Morgan Stanley, the other global coordinator, is no surprise. The bank has been advising the Fed since the September implosion of AIG, and on top of its own expertise, regulators wanted it in.

At a time when few deals are gettting done, the AIA flotation will be a big one. In fact, it will be the biggest Hong Kong IPO since April 2007 and a fee bonanza for the banks. Coordinators and bookrunners typically earn around 3 percent in fees — so a $5 billion IPO could produce at least $150 million in fees split between the banks. More than 30 banks applied for the job.

Deutsche, of course, is no babe in Asian IPO woods. As our colleague Michael Flaherty in Hong Kong points out, Deutsche was the joint global coordinator of China Life’s $3.48 billion IPO in December 2003, and was among the banks that handled the $19.1 billion IPO of Industrial and Commercial Bank of China in October 2006. 

The banks that did not make the cut still have hope, though. There are spots left to be filled for bookrunners and co-managers of the IPO, which is not expected to actually happen until the first half of 2010.

British department stores group Debenhams Chief Executive Rob Templeman told Reuters the company will price its 323 million pound rights issue at a modest discount, while Chinese state-owned metals firm Chinalco may revise its planned $19.5 billion investment in miner Rio Tinto before a June 14 deadline, according to two sources close to the deal we talked to.

In the U.S., American International Group (AIG) is in talks with three bidding groups for International Lease Finance Corp., but a sale is complex as the parties have to deal with the aircraft leasing unit’s mountain of debt and funding needs, Reuters heard late on Wednesday.

And in the newspapers:

* State-run Rosneft, Russia’s largest oil firm, will take over private bank Trust in exchange for writing off debts, Kommersant business daily reported.

* Indian wind turbine maker Suzlon Energy is close to raising $127 million in the form of debt from private equity firms to finance the purchase of Portuguese energy firm Martifer’s stake in Germany’s REpower Systems, the Economic Times reported.

 * China’s Ping An Insurance, which was hit by a $3.3 billion impairment loss last year on its investment in Dutch-Belgian group Fortis, said it will maintain a cautious stance on foreign investments, mainly sticking to Hong Kong stocks, the China Securities Journal cited Chairman Peter Ma as saying. 

* Channel 4 is working hard to thrash out a deal with BBC Worldwide to secure its future, although the government has set the two sides a deadline of 14 days to come to an agreement about a joint venture, the Independent reported. Channel 4 is facing a funding gap of 150 million pounds by 2012. If the talks fail, it is likely that Channel 4 will be acquired by its rival Five.

* Some of the UK’s largest hedge funds have begun making backup preparations to move to either Switzerland or New York unless a draft European directive on alternative investment fund managers is rewritten, the Financial Times reported.

* Fashion chain New Look has not ruled out a public listing in 2010, after dropping an IPO plan in 2007 as investors balked at the 1.8 billion pound price tag, the Financial Times reported. Any decision on an IPO is to be taken by owners Apax and Permira.

China’s Sichuan Tengzhon Heavy Industrial Machinery Co became the surprise buyer for General Motor’s Hummer brand while insurer AIG — another U.S. giant in trouble — cut the asking price for its Taiwan insurance unit. For the day’s top headlines, click here.

And here is what we found of interest in the newspapers.

Global miner Rio Tinto may cut the size of its planned $7.2 billion issue of convertible bonds to China’s Chinalco and raise more equity via a rights issue, the Australian Financial Review reported.

Banks in Qatar, the world’s top exporter of liquefied natural gas, will get cash and bonds in exchange for selling their real estate investments to the government under a $4 billion programme unveiled last week, the daily Gulf Times cited sources as saying.

General Motors Corp’s Saab Automobile unit has narrowed talks with potential buyers for the loss-making Swedish brand to two, the Dagens Industri quoted Chief Executive Jan-Ake
Jonsson as saying.

About 4,000 jobs are at risk as British van maker LDV has fallen into administration after would-be buyer Weststar failed to raise the necessary funds, the Independent and the Financial Times reported.

The Foundry, a London-based visual effects group whose software has been used in films such as “Wolverine”, has been bought back by its management for an amount in the “double-digit millions of pounds”, with the backing of Advent Venture Partners, the Financial Times reported.

AIG plans to float its Asian crown jewel, Volkswagen halts talks with Porsche, Nomura hires for a massive push in U.S. equities, and more. Here are the latest deal-related stories:

AIG to launch IPO for Asia crown jewel

Volkswagen halts tie-up talks with Porsche

Nomura hires for massive U.S. equity push

Cubs’ offer won’t be voted on next week: sources

Babcock & Brown infrastructure fund gets acquired

China pension fund plans foreign PE deals: sources

China government OKs Minmetals’ OZ Minerals deal

Daiwa SMBC to buy unit of Britain’s Close Brothers

Whitehaven says to drop merger deal with Gloucester

Metro to present Karstadt deal outline: sources

And in Europe’s morning papers:

* Hedge fund manager Noam Gottesman, co-chief executive of GLG Partners Inc (GLG.N), plans to move to New York from London to build up the fund’s U.S. assets, the Daily Telegraph said.

* Alan Miller, former fund manager at New Star, plans to launch two new funds in a joint venture with Alexander Spencer Churchill, the Daily Telegraph said.

* Britain’s Financial Services Authority is investigating potential insider dealing in shares of pub companies Punch Taverns (PUB.L) and Enterprise Inns (ETI.L), the Daily Telegraph reported. Reuters story here.

* Societe Generale (SOGN.PA) CEO Frederic Oudea has said that further writedowns are possible at the bank, depending on market conditions, Le Parisien newspaper reported. Reuters story here.

Now that the stress test results are in and green shoots of economic promise abound, a great gush of lending is going to come spilling out of banks’ lending spigots, right? Wrong.

As Kristina Cooke reports, “While banks may be less hesitant to lend to each other if they feel their rivals’ books have been credibly vetted, that does not translate into confidence to make new loans to small businesses and consumers.”

Worse, although money is cheap at the Fed - well, cheap in terms of interest, if not terms - banks may be the only businesses that enjoy any thaw in credit conditions. Michael Feroli, economist at JPMorgan, says the still sickly state of the economy means many borrowers’ creditworthiness has dropped, while demand for new loans has waned.

At best, the stress tests may represent the nadir in this sorry chapter of U.S. economics. And with troubled banks still facing a gap of more than $70 billion in capital, perhaps the bottom is still to be reached. Then again, $70 billion will hardly break the U.S. bank. Heck, AIG cam close to losing nearly that much in a single quarter.

Speaking of which, for those of you who played along with the consumerist.com’s “Worst Company in America” competition, the results are in:

“The company deemed ‘too big to fail’ joins former champions Halliburton (2006), RIAA (2007) and Countrywide (2008) as ‘The Worst Company in America.’ With the win, AIG will receive the Consumerist’s not-so-coveted ‘Golden Poo’ trophy.

“The competition began with 32 companies separated into four brackets. Companies competed in head-to-head match-ups and the winner of each match-up was determined by the vote of Consumerist readers. The 32 companies included: AIG, Target, Peanut Corp of America, American Express, Walmart, HP, T-Mobile, Best Buy, Ticketmaster, TWC, Apple, United HealthCare, Verizon, Sprint, Home Depot, Citibank, Comcast, DirecTV, US Airways, Capital One, General Motors, United Airlines, Sears, Chase, eBay/Paypal, GE, Dell, Chrysler, AT&T, Circuit City, Starbucks, and Bank of America.

“‘As it turns out, taxpayer bailouts and ridiculously high-priced executive compensation packages aren’t a very popular mix,’ said Meghann Marco, Consumerist.com.”

Deals of the Day:

* Britain’s Carphone Warehouse Group PLC said it is in talks to acquire Tiscali’s UK operations for 236 million pounds.

* Healthcare-focused software maker Advanced Computer Software Plc said it has agreed with Business Systems Group to buy the technology services firm for about 15.5 million pounds ($23.4 million).

* Diageo’s talks to buy a stake in India’s United Spirits have not progressed as the two sides have been unable to agree on details, a senior Diageo executive said.

* The Australian government will allow Chinese steel maker Anshan Iron and Steel Group to triple its stake in Australian iron ore miner Gindalbie Metals, the latest Chinese footprint in Australia’s mining sector.

(PHOTO: A Bank of America branch is pictured in New York May 7, 2009. REUTERS/Shannon Stapleton)

Faced with a $34 billion hole uncovered in the stress test, Bank of America might have little choice but to dump its investment in China Construction Bank, China’s second-largest bank. That would give it about a quarter of the $34 billion of additional capital we are told it needs to fill a yawning gap in its foundation. A lock-up on a portion of the stake ends tomorrow, and the opportunity may be too good for embattled CEO Ken Lewis to pass up, though the bank has plenty of incentive to hold onto the stake.

Citigroup’s Keith Horowitz raised his price target on the bank, citing the end of uncertainty. He also says the total need at the 19 stress-tested banks will be $75 billion, with Bank of America accounting for the lion’s share.

At this point, with hundreds of billions of public dollars having been heaved at the likes of AIG, Citi, Bank of America, automakers, auto suppliers, life insurers, etc. that number is hardly shocking. And with the S&P having recovered 25 percent of its recession-fueled losses, is it time to expect investors to become more aggressively exposed to the end of uncertainty?

Other deals of the Day:

* British insurer Aviva is exploring options to sell its Australian business, which has an estimated value of up to A$1 billion ($740 million), sources with direct knowledge of the matter told Reuters.

* GlaxoSmithKline has agreed to sell the U.S. rights to the antidepressant Wellbutrin XL to its Canadian partner Biovail Corp for $510 million, the world’s second-biggest drugmaker said.

* The clans that control the Porsche automotive empire are set to meet in the hopes of finding a solution to its high-risk takeover plans for Volkswagen that have backfired.

(PHOTO: Ken Lewis, Chairman, Chief Executive Officer and President of Bank of America in New York, June 11, 2008.  REUTERS/Chip East)

With the end of the economic meltdown so tantalizingly close, and stock markets pricing in the spring thaw, The Consumerist’s annual Worst Company in America competition is just the tonic DealZone readers need to keep their prized sense of perspective appropriately tickled.

“It’s the bailouts versus the monopolies!” the Website’s news release rings out:

The annual 32-company battle royale has whittled itself down to the “final four”: Bank of America, Comcast, Ticketmaster and AIG. One of these disastrous companies will go on to join Halliburton (2006), RIAA (2007) and Countrywide (2008) as “The Worst Company in America.”

AIG and Ticketmaster face-off May 4th, Bank of America and Comcast face-off May 5th, the victors of those contests meet May 6th, and then the “winner” is announced May 7th.

The competition began with 32 companies separated into four brackets. Companies competed in head-to-head match ups and the winner of each match up was determined by the vote of Consumerist readers. The 32 companies included: AIG, Target, Peanut Corp of America, American Express, Walmart, HP, T-Mobile, Best Buy, Ticketmaster, TWC, Apple, United HealthCare, Verizon, Sprint, Home Depot, Citibank, Comcast, DirecTV, US Airways, Capital One, General Motors, United Airlines, Sears, Chase, eBay/Paypal, GE, Dell, Chrysler, AT&T, Circuit City, Starbucks, and Bank of America.

“AIG and Bank of America paved their way to the final four with exorbitant executive compensation packages, reckless management, and tax payer bailouts. Ticketmaster and Comcast drew the ire of voters because they were viewed as monopolies that consumers were forced to deal with,” said Meghann Marco, Consumerist.com.

Deals of the Day:

* French retail giant Carrefour has signed a preliminary memorandum of intent to buy 75 percent in Russia’s Seventh Continent and will make a final offer on May 15, a newspaper reported. Sources told Reuters last month that Carrefour had provisionally valued its takeover target at $1.25 billion.

* Commodity trader Noble Group raised its offer for Australian miner Gloucester Coal to A$490 million ($361 million), in a bid to scupper Gloucester’s planned deal with rival Whitehaven Coal.

* Sanofi-Aventis announced a 200 million euro ($265 million) plan to convert a factory to biotechnology, highlighting efforts by the world’s fourth largest drugmaker to penetrate the growing sector.

* Finland’s Metsaliitto said it will sell its 49.9-percent stake in state-controlled renewable energy firm Vapo to a consortium for 165 million euros ($218.4 million) to bolster its balance sheet.

* Azrieli Group said it submitted the winning bid to buy a 4.83 percent stake in Bank Leumi from Cerberus Capital Management and Gabriel Capital Corp.

* Zotye Auto, a Chinese maker of sport utility vehicles (SUV), is raising about 720 million yuan ($106 million) by selling a 20 to 30 percent stake to a private equity fund-led consortium, aiming for a Shanghai initial public offering later, sources said.

* Saab Automobile, the Swedish unit of struggling U.S. carmaker General Motors, said it was not in talks with Italian peer Fiat SpA about a takeover.

(PHOTO: Manchester United’s John O’Shea (R) celebrates his goal against Derby County during their English League Cup soccer match at Old Trafford in Manchester, northern England January 20, 2009. Photograph taken on January 20, 2009. REUTERS/Darren Staples)

AIG’s shares rose 15 percent when investors learned that the insurer would post a loss in the first quarter but it would not be as large as the hit it took in the last three months of 2008.

Adding to the “good” news: the loss would not trigger yet another tweak to the rescue package that has propped up AIG as it sorts through its affairs.

Of course, AIG’s mountain of red ink reached new heights in the fourth quarter, as it posted $61.7 billion in losses, the largest in U.S. corporate history.  The government owns a nearly 80 percent stake in AIG. And AIG owes taxpayers some $85 billion in TARP funds and loans.

Maybe AIG’s fourth quarter loss set a new standard, sort of a reverse watermark on how low things can sink. And maybe now the bottom will have to fall out yet again for people to get shocked.

Still, one must wonder what investors are thinking. It will be bad but not that bad, so buy AIG? 

(Photo: A security guard outside AIG’s headquarters in New York on Sept 15. REUTERS/Brendan McDermid)

The modern shopping mall is the cathedral of consumer prosperity, so news that U.S. shopping mall owner General Growth Properties sought bankruptcy protection, capping a months-long effort to cope with a $27 billion debt load, is something of a seminal event in the global economic crisis.

The story of the second-largest U.S. mall owner reflects the larger trend in today’s credit-stifled economy: companies that loaded up on debt in better times and have been struggling to refinance so they can cover their payments. Many have succumbed to Chapter 11 after frequent negotiations with lenders, and many more are expected to.

It’s even worse for shopping malls. Commercial-property values have sunk, and the U.S. retail market is hurting. Many analysts say General Growth could survive a lengthy bankruptcy without resorting to a liquidation, but would have to sell off some properties. That could consolidate power in the mall industry if major players like Simon Property Group, Westfield Group and Taubman Centers could cherry-pick some of the assets.

Deals of the Day:

* EBay Inc offered to buy South Korean online retailer Gmarket Inc for up to $1.2 billion through a cash tender offer and already secured 67 percent of Gmarket, as Yahoo Inc and Interpark had agreed to the tender offer.

* Japanese chipmakers NEC Electronics and Renesas Technology are in the final stage of merger talks, four sources said, the latest shakeout in an industry wracked by a huge chip glut and a slump in prices.

* American International Group Inc is close to a deal to sell its U.S. auto insurance business to Swiss insurer Zurich Financial Services for roughly $1.5 billion, a source familiar with the matter said.

* Software maker Macrovision Solutions Corp agreed to buy Muze Inc for $16.5 million in cash to boost its entertainment-information products portfolio, and it raised its 2009 revenue outlook to reflect the deal.

* British renewable energy company Novera Energy Plc said it sold its East London Sustainable Energy Facility (ELSEF) to Biossence Ltd for 1.25 million pounds ($1.87 million) to focus on onshore wind energy projects.

* Aderans Holdings first traded 10.6 percent higher after the Nikkei business daily reported Japanese private equity fund Unison Capital is set to bid for a stake of at least one-third of the wig maker.

* PICC Property & Casualty, China’s top non-life insurer, said on Thursday American International Group has no intention of selling its stake in the Chinese insurer.

* India’s Company Law Board (CLB) approved the takeover of fraud-hit Satyam Computer Services Ltd by mid-sized outsourcer Tech Mahindra Ltd, as had been expected.

* The chairman of Spain’s Telecinco has said the company was holding informal merger talks with rivals Cuatro and La Sexta, local media reported.

* Japanese chipmakers NEC Electronics and Renesas Technology are in the final stage of merger talks, four sources said, the latest shakeout in an industry wracked by a huge chip glut and a slump in prices.

* Loss-making General Motors unit Saab Automobile said on it had signed confidentiality agreements with 27 potential suitors in its efforts to find a new owner to help it survive the downturn.

* British stockbroker Blue Oar Plc said it was considering making a cash offer for financial services group Dowgate Capital Plc.

* China-focused Prosperity Minerals Holdings Ltd said its Chief Executive David Wong had signed a memorandum of understanding to transfer his 53 percent stake in the company to Prosperity International Holdings Ltd in a stock deal.

(Corrected - Bank of America did not purchase Countrywide early this decade)

Now that the nation’s top public servant is wielding The Donald-like powers over chief executives of bailed-out companies, expectations are high that more heads will roll, and Bank of America CEO Kenneth Lewis is looking like the next contestant on a new economic prime-time drama: The Executive.

Rick Wagoner, ousted as General Motors CEO, had spent more than three decades in the company and had been in the driver’s seat for most of the last one. He also presided over the era of the energy-unfriendly Sport Utility Vehicle and is criticized for sticking with trucks far longer than he should have.

Lewis has been Bank of America CEO for about eight years. He bought CountryWide, the biggest lender after the market went crazy for real estate and was ultimately forced to buy Merrill Lynch as the salad days of Wall Street wilted.

By contrast, Citigroup’s Vikram Pandit has been running things for just about long enough to endure the worst of the crisis, and AIG’s Edward Liddy was installed by the government. Perhaps it’s the longevity of characters like Wagoner and Lewis that make them seem so deserving of a presidential pink slip.

Should investors brace for a wave of executive firings? Certainly any chief with enough stripes to remember the good times and who had his hand out for government aid is looking vulnerable.

It is interesting to recall the argument behind AIG’s odious retention bonuses: these are the guys who got their companies into those messes; they should be the best positioned to get them out. If Lewis does get a presidential veto, that argument will be pretty much lost.

Deals of the Day:

* Raven Russia, a property company focused on warehouses in Russia, agreed to acquire property developer Raven Mount Group for 54.9 pence per share, or 60 million pounds, the companies said.

* Spains’ Santander said it had agreed to sell its 32.5 percent stake in Spanish oil company Cepsa to Abu Dhabi fund IPIC at 33 euros per share.

* Hungary’s government said it is injecting fresh funds into FHB, raising its stake in the mortgage bank beyond 40 percent and helping it compete better with foreign rivals in its home market.

* Australian miner OZ Minerals said it received an alternative rescue bid from Minmetals, after Australia last week blocked the Chinese state-owned firm’s $1.8 billion bid on national security grounds

* A Canadian pension fund has offered $930 million to buy Australian investment firm Macquarie Communications Infrastructure Group, sending MCG’s shares up over 58 percent.

(PHOTO: Donald Trump speaks during a news conference at an Aberdeenshire Council inquiry into the plans for his golf course resort in Aberdeen, northeast Scotland June 10, 2008. REUTERS/David Moir)