BOSTON SCIENTIFIC €30m UNIT TO SECURE FUTURE OF 600 JOBS - Boston Scientific is to seek planning permission for a €30m development in Cork designed to secure the future of 600 jobs in the city, says the Irish Examiner. The 100,000 sq ft unit will be developed by Boston on its Model Farm Road campus but will be operated by Stryker - which earlier this year purchased Boston’s neurovascular unit for €1.45 billion. The 600 Boston Scientific workers employed in the Cork unit will transfer to Stryker and relocate production to the new clean room production facility when it is completed. Boston Scientific will begin consultations with the local community next week on the €30m development which is expected to result in close to 200 jobs on and off-site in the construction phase. Boston Scientific has lined-up two separate businesses, in start-up mode, from within their portfolio to fill the space that will become vacant when production is transferred on completion of the new facility. These incubation units, may in time, result in extra job creation.
ANGLO BAILOUT RESTRUCTURE SAVINGS FACE NEW LIMIT - The maximum benefits to the State from restructuring Anglo Irish Bank's bail-out is €12 billion - even though the interest bill is €17 billion. This is because €5.2 billion goes back to the State under the existing arrangements, the Irish Independent has learned. The news comes as executives from Anglo continue to crunch the numbers on options to restructure the bail-out without adversely impacting the bank's capital position. Finance Minister Michael Noonan is pushing Europe to allow a restructuring of the €30 billion "IOU" or promissory note that was created by the State to bail out Anglo and Irish Nationwide. The terms of the IOU mean the State must pay the banks about €3 billion until 2023, and lower amounts until 2031. The total bill comes to €47.4 billion because the State must pay interest at a rate of 5.8% on the IOUs outstanding. The Irish Independent has learned, however, that while the interest bill under the current arrangement would come to a problematic €17.4 billion, more than €5.2 billion of this would actually go back to the State. This is because Anglo takes its IOUs to the Central Bank of Ireland and exchanges them for liquidity, or cash. The Central Bank of Ireland charges a rate of 3.5% for this, including a 1.5% fee for the ECB and a 2% fee for the Central Bank of Ireland.
BANK OF IRELAND TO RAISE RATES ON LOANS TO BUSINESS - Almost one in five business customers of Bank of Ireland face higher repayments on their borrowings after the bank, in a major departure, unilaterally changed how it prices interest on the loans. The bank will increase interest rates on business loans based on a new calculation linked to its own costs of raising money through customer deposits, the money markets and other funding sources. The move is a dramatic change from the regular pricing of business loans off the inter-bank rate, the traditional cost of funds on which banks set loan charges, says the Irish Times. “The bank very much regrets the need to pass on this increase. However, it is no longer sustainable to continue to absorb these increased costs,” said the lender. The bank said that it would, at its discretion, extend the term of the loans for customers left in financial difficulty as a result of the change to maintain their loan repayments at existing levels. “The bank has experienced a significant increase in its funding costs since 2008 driven by market conditions,” said a spokeswoman. “The new pricing structure will reflect the actual cost of funding to the bank, “ she added.
INVESTORS FLOCK TO BUY 30-YEAR US DEBT - Investors flocked to buy 30-year Treasury debt sold on Thursday, in a sign that some in the bond market expect the Federal Reserve’s Operation Twist will pull yields lower and boost prices in the coming months. The Financial Times says that Wall Street dealers share of the 30-year sale was their lowest since August of 2010, with near record demand from investors, in stark contrast to the poor reception for a 10-year sale on Wednesday. “This reversal of auction fortunes is a sign that yield levels matter, as 30-years offer the most pickup, as does the ability to sell later to the Fed,” said George Gonclaves, strategist at Nomura Securities. “This is the first [bond] auction after Fed twist announcement and a likely candidate for delivery later,” he added. Since the Fed announced Operation Twist last month, the yield on the 30-year bond has risen sharply from an initial drop to 2.69%, reaching a high of 3.25% this week. That rise may have been an attractive entry point for buyers said traders.