Unstructured Finance

Bad economy equals tough time for teeth

We all know that people have cut back on shopping, dining out, vacations and other pursuits in the difficult economy. Turns out many are also neglecting their smiles.

dentistMore than 90 percent of dentists surveyed by the Chicago Dental Society said clients are putting off cosmetic procedures, up from 60 percent a year earlier.

The stress of unemployment and other concerns also are taking their toll.  Sixty-five percent of dentists saw an increase in jaw clenching and teeth grinding among their patients.

The dental group released findings from its fall 2009 survey this week as it holds its 145th annual Midwinter Meeting in Chicago.  The three-day event, which wraps up on Saturday, gives dental professionals the chance to check out new toothbrushes, chairs, goggles and other tools.  And it looks like companies are in tune with the tough times.  Reuters Shop Talk took a stroll through the main floor of the show and saw several companies offering dentists discounts of 40 percent or more on power toothbrushes and other dental goods if they bought them on the spot.

More than 75 percent of the dentists surveyed said patients are putting off needed dental work and a majority said visits for preventative dental care were down.

Check Out Line: CEO words of wisdom during earnings season

tjmaxxCheck out some interesting quotes from top executives during this week’s earnings extravaganza.

Chief executives and their sidekicks, chief financial officers, had the opportunity to spin poor results, self-flagellate, prognosticate, tout new products and to tell Wall Street why it just doesn’t get it.

Here’s TJX CEO Carol Meyrowitz, who again was asked by the press and Wall Street whether the off price retailer might have troubling sourcing product as department stores cut back on their orders:
“I can answer this a hundred times, a thousand times, a million times. We are not concerned about it.”

How to rate the budget?

INDIA-BUDGET/When the finance minister presents the budget, the stock market moves one way or the other.

And like every year this will dominate the news.

Over there and everywhere.

Is that fair? Or convincing?

Some of the analysis will follow a pattern.

If the stock market goes up, the budget may be described as successful because it didn’t “rock the boat”.

If  it moves sideways, it may be said the market had already absorbed the good news — the growth figures for instance.

Keeping score: Food and drink M&A, sovereign debt

Highlights from the Thomson Reuters Investment Banking Scorecard:

“Food and beverage accounts for 10% of M&A

Coca Cola’s $12.1 billion offer to purchase Coca Cola Enterprises, an Atlanta-based producer and wholesaler of bottled beverages, brings the total of M&A activity in the food and beverage sector to $32.4 billion, an increase of 257% compared to the same period in 2009.

Deals in the food and beverage industry account for nearly 10% of all global activity this year and are second only to activity in the oil and gas sector.  Credit Suisse, an advisor to Coca Cola Enterprises, ranks as the top advisor in the food and beverage industry with $26.7 billion from 11 deals for year-to-date 2010.

European issuers power agency and sovereign debt market

This week’s $6.2 billion sovereign debt offering from the United Kingdom bolsters Europe’s stronghold in this market.  For year-to-date 2010, European countries have issued nearly 78% of all sovereign and supranational debt with 285 issues and proceeds of $206.5 billion.  The Americas region follows in second place with $23.3 billion from 52 issues. This week’s offering is the largest debt issue in the United Kingdom this year and the seventh largest agency and sovereign offering in Europe.

DealZone Daily

Friday’s highlights:

* Giant private equity firm Blackstone Group LP (BX.N) posts better-than-expected earnings on Thursday and says that lending for deals has returned, although exiting investments by IPO has been bumpy.

* Huatai Securities’ (601688.SS) modest gains on debut fell short of expectations after it raised $2.3 billion in China’s largest IPO this year, and could set a trend of lower pricing in upcoming share listings.

* Rob Cox of Reuters Breakingviews says Coca-Cola Chief Executive Muhtar Kent’s strategic about-face with a takeover of Coca-Cola Enterprises’ North American bottling operations “doesn’t mean the decision isn’t financially and strategically sound” — but “Kent looks like a charlatan for so recently dismissing the idea after Pepsi beat him to it”.

Bottlers: the choice of a new generation?

Over the last few months, as Pepsi worked out its deal to buy its main bottlers, Coca-Cola said it wasn’t interested in such a deal. Well you can’t keep a good idea down and today Coke, which once liked to be known as “the real thing,” unveiled plans to buy the bottler’s North American business.

The deal includes about $3.2 billion in Coke’s equity in CCE and the assumption of nearly $9 billion in debt. PepsiCo is due to close the $7.8 billion purchase of its largest bottlers, Pepsi Bottling Group and PepsiAmericas, perhaps within the next 24 hours. Coke expects the transactions to add to earnings by 2012. It also expects cost savings of $350 million over four years, with 70 percent of the savings realized by the end of 2012. It expects to take a related one-time charge of $425 million over three years, but will not need to use any additional borrowings.

“Coke couldn’t sit back while Pepsi delivered $600 million (or more) in synergies for reinvestment and then transformed its U.S. business model,” said ConsumerEdge Research analyst Bill Pecoriello, who suggested Coke may not be interested in holding onto the asset for the long haul.

Capital goods index gains over 1 pct

The BSE Capital Goods Index gained over 1 percent on Thursday in a broader market that ended flat a day before the annual budget.

Index counters like Kirloskar Bros, Thermax and Crompton Greaves gained over 3 percent each.

L&T shares gained 2.5 percent to close at 1536 rupees after a senior company official said the firm was expecting a contract worth around 80 billion rupees.

A400M – Running on empty but not running away

By Jason Neely

A 20 billion euro project is great, but not if it costs 31 billion to deliver. Most companies don’t walk away from deals that bad. They run.

But Europe’s biggest and now most fraught defence collaboration, the A400M military transport plane, is no ordinary deal.

European countries haggled for years before agreeing on it, despite their desire for a home grown alternative to U.S. planes such as the C-130 Hercules.

Check Out Line: Coke’s actions speak louder than its words

coke1Check out Coke’s about face on its relationships with one of its bottlers.

Coke plans to buy the North American operations of its largest bottler, Coca Cola Enterprises, in a substantially cashless deal that would let it cut costs and be more flexible in its distribution.

The announcement of the deal comes just as Coke rival PepsiCo is about to close its own $7.8 billion purchase of its largest bottlers, Pepsi Bottling Group and PepsiAmericas. It also reverses Coke’s previous stance, spelled out in repeated comments over the past several months, that its current relationship with its bottlers was just fine and it didn’t need to copy Pepsi.

Coke CEO Muhtar Kent said last April when the Pepsi deal was first announced that its franchise model was the best way to go and repeated that stance again in July, September and December.