(Bloomberg) -- American International Group Inc., the insurer bailed out by the U.S. government, is accelerating the separation of American International Assurance Co. and will list it on an Asian exchange.
AIG has hired Blackstone Group LP to advise on the reorganization and initial public offering of its Asian life unit, which operates in 13 markets in the region with more than 20 million customers and over $60 billion of assets, it said in a statement issued through Business Wire today.
AIG, based in New York, is selling property and businesses after being bailed out four times by the U.S. government. The company has tapped about $45.5 billion from a U.S. credit line as of earlier this month.
“At this stage, we believe that a public listing for AIA would be in the best interests of all stakeholders, including U.S. taxpayers, policyholders, employees and distribution partners,” AIG Chairman and Chief Executive Officer Edward Liddy said in the statement.
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Sunday, May 17, 2009
Treasuries Advance as Stocks Fall, Fed Prepares to Buy Debt
(Bloomberg) -- Treasuries rose, adding to last week’s gain, as Asian stocks extended losses and the Federal Reserve prepared to buy 10-year notes today.
Benchmark 10-year yields will fall about 40 basis points by mid-year and the U.S. economic recovery may stall, according to a report from Goldman Sachs Group Inc., one of the 16 primary dealers that trade directly with the Fed. The central bank also plans to buy Treasuries on May 20 and May 21 as part of its plan to cap borrowing costs and combat the steepest U.S. recession in 50 years.
“The economy is still in trouble,” said Takashi Yamamoto, chief trader in Singapore at Mitsubishi UFJ Trust & Banking Corp., part of Japan’s biggest bank. “Yields will go down.”
The yield on the 10-year note fell three basis points to 3.11 percent as of 10:10 a.m. in Tokyo, according to data compiled by Bloomberg. The price of the 3.125 percent security maturing May 2019 gained 1/4, or $2.50 per $1,000 face amount, to 100 1/8. A basis point is 0.01 percentage point.
Ten-year yields declined 15 basis points last week, as prices posted the first seven-day gain since the period that ended March 20.
The MSCI Asia Pacific Index of regional shares dropped 1.6 percent today, after the Standard & Poor’s 500 Index slid 1.1 percent on May 15, helping fuel demand for the relative safety of government debt.
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Benchmark 10-year yields will fall about 40 basis points by mid-year and the U.S. economic recovery may stall, according to a report from Goldman Sachs Group Inc., one of the 16 primary dealers that trade directly with the Fed. The central bank also plans to buy Treasuries on May 20 and May 21 as part of its plan to cap borrowing costs and combat the steepest U.S. recession in 50 years.
“The economy is still in trouble,” said Takashi Yamamoto, chief trader in Singapore at Mitsubishi UFJ Trust & Banking Corp., part of Japan’s biggest bank. “Yields will go down.”
The yield on the 10-year note fell three basis points to 3.11 percent as of 10:10 a.m. in Tokyo, according to data compiled by Bloomberg. The price of the 3.125 percent security maturing May 2019 gained 1/4, or $2.50 per $1,000 face amount, to 100 1/8. A basis point is 0.01 percentage point.
Ten-year yields declined 15 basis points last week, as prices posted the first seven-day gain since the period that ended March 20.
The MSCI Asia Pacific Index of regional shares dropped 1.6 percent today, after the Standard & Poor’s 500 Index slid 1.1 percent on May 15, helping fuel demand for the relative safety of government debt.
Read more here
VW Calls Off Porsche Talks, Says Atmosphere ‘Not Constructive’
(Bloomberg) -- Volkswagen AG, Europe’s largest automaker, called off talks with Porsche SE about a combination less than two weeks after the sports-car manufacturer’s controlling families agreed to pursue a merger.
“There is currently no atmosphere for constructive talks,” Christine Ritz, a spokeswoman at Volkswagen, said yesterday in a telephone interview. In a statement, Porsche said that while a meeting scheduled for today had been canceled, negotiations will resume. It didn’t give details.
The Porsche and Piech families, which together control half of Porsche, agreed May 6 to create an “integrated” carmaker that would put Porsche alongside VW brands including Skoda and Audi. Within a week, VW Supervisory Board Chairman Ferdinand Piech said that Stuttgart, Germany-based Porsche must first trim its 9 billion euros ($12 billion) in net debt before a merger, and that Chief Executive Officer Wendelin Wiedeking and Chief Financial Officer Holger Haerter were partly responsible.
“War has erupted again between Volkswagen and Porsche,” said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen. Dudenhoeffer was head of marketing strategy and research at Porsche from 1987 to 1990. “Piech is behind that.”
Porsche owns about 51 percent of Wolfsburg, Germany-based Volkswagen, whose automotive division had 10.7 billion euros in net cash as of March 31. The maker of the 911 sports car had been accumulating Volkswagen shares since 2005 to protect ties to its largest supplier.
First Strike
Porsche Supervisory Board Chairman Wolfgang Porsche was struggling to raise financing to boost the stake to 75 percent and had been at loggerheads with Piech about how to unite the carmakers. The May 6 agreement between the families effectively put on hold Porsche’s plan to further bolster its stake in Volkswagen by acquiring VW shares.
The Porsche family is upset over Piech’s remarks and is concerned that they may hurt the value of the carmaker, Der Spiegel said on its Web site. When asked whether Volkswagen would pay 11 billion euros for Porsche AG, the operating unit of Porsche SE, Piech said that amount is “definitely a few billion too high,” according to the magazine.
Porsche workers will hold their first-ever strike today to protest the merger plan, Focus magazine reported. On May 7, a day after the initial pact, Porsche fell the most in at least 13 years on the Frankfurt exchange.
The stock has fallen 21 percent this year, cutting Porsche’s market value to 7.2 billion euros. Volkswagen has declined 12 percent, valuing the carmaker at 69.6 billion euros.
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“There is currently no atmosphere for constructive talks,” Christine Ritz, a spokeswoman at Volkswagen, said yesterday in a telephone interview. In a statement, Porsche said that while a meeting scheduled for today had been canceled, negotiations will resume. It didn’t give details.
The Porsche and Piech families, which together control half of Porsche, agreed May 6 to create an “integrated” carmaker that would put Porsche alongside VW brands including Skoda and Audi. Within a week, VW Supervisory Board Chairman Ferdinand Piech said that Stuttgart, Germany-based Porsche must first trim its 9 billion euros ($12 billion) in net debt before a merger, and that Chief Executive Officer Wendelin Wiedeking and Chief Financial Officer Holger Haerter were partly responsible.
“War has erupted again between Volkswagen and Porsche,” said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen. Dudenhoeffer was head of marketing strategy and research at Porsche from 1987 to 1990. “Piech is behind that.”
Porsche owns about 51 percent of Wolfsburg, Germany-based Volkswagen, whose automotive division had 10.7 billion euros in net cash as of March 31. The maker of the 911 sports car had been accumulating Volkswagen shares since 2005 to protect ties to its largest supplier.
First Strike
Porsche Supervisory Board Chairman Wolfgang Porsche was struggling to raise financing to boost the stake to 75 percent and had been at loggerheads with Piech about how to unite the carmakers. The May 6 agreement between the families effectively put on hold Porsche’s plan to further bolster its stake in Volkswagen by acquiring VW shares.
The Porsche family is upset over Piech’s remarks and is concerned that they may hurt the value of the carmaker, Der Spiegel said on its Web site. When asked whether Volkswagen would pay 11 billion euros for Porsche AG, the operating unit of Porsche SE, Piech said that amount is “definitely a few billion too high,” according to the magazine.
Porsche workers will hold their first-ever strike today to protest the merger plan, Focus magazine reported. On May 7, a day after the initial pact, Porsche fell the most in at least 13 years on the Frankfurt exchange.
The stock has fallen 21 percent this year, cutting Porsche’s market value to 7.2 billion euros. Volkswagen has declined 12 percent, valuing the carmaker at 69.6 billion euros.
Read more here
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