AIB LAYS BLAME ON MARKET AS IT STALLS BOND SALE - AIB put a planned bond deal on hold yesterday, blaming a deterioration in the markets after the plan to issue the new 10-year mortgage-backed debt was announced less than 24 hours earlier.
Investors and traders had been waiting for the deal - expected to be up to €1 billion in size - to price yesterday. The decision to stall the process left some market watchers scratching their heads, writes the Irish Independent. "I'm not aware of a decline in market conditions, but there could be a technical issue or a pricing hitch," said Gary Jenkins, a bond market analysts at LNG Capital in London. The cost of borrowing for the Government fell to an all-time low yesterday, and is usually a guide to general market conditions. The European Central Bank had also been expected to snap up a big chunk of the new AIB covered bonds as part of its latest asset-buying programme, which should have helped AIB's deal. The ECB started buying up European mortgage-backed securities last month as part of its stated aim to boost its balance sheet in an effort to revive Europe's flatlining economy. The ECB will still be expected to come in as a buyer when the AIB bond is relaunched, which could be as soon as tomorrow. Markets are generally quiet on the US Thanksgiving holiday, which falls today.
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LONE STAR APPOINTS HML TO MANAGE PORTFOLIO OF 4,000 IRISH RESIDENTIAL LOANS - US private equity fund Lone Star has appointed loan servicing specialist HML to manage a portfolio of residential loans that it acquired last month from UK lender Lloyds, says the Irish Times. The portfolio comprises about 4,000 Irish non-performing residential home loans that had a face value of €1.1 billion. It was previously managed by Certus, the Dublin-based outsourcing group that grew out of the former Bank of Scotland (Ireland) retail banking operation. Lloyds previously operated in Ireland under the Bank of Scotland and Halifax brands and is understood to have sold the “Project Paris” loan book to Lone Star at a significant discount. HML has operated in Ireland since 2005. Before securing this contract it was servicing more than 10,000 residential mortgages in Ireland to the value of about €2.8 billion. The company employs about 350 staff at offices in Dublin and Derry and was recently assigned an “above average” rating by Standard & Poor’s as a primary residential loan servicer in Ireland.
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EXCEPTIONAL GAIN PUTS TV3 IN PROFIT - An exceptional gain from the buyback of its former Anglo Irish Bank debt, resulted in TV3 recording a net profit of just over €7.4m last year. New accounts for the Ballymount-based broadcaster’s holding company, Tullamore Alpha, show a net profit of €7.44m was recorded for 2013, compared to a loss of just over €1.06m for the prior year, says the Irish Examiner. The difference was an exceptional gain of €8.9m from the buyback of TV3’s debt through the IBRC liquidation process. TV3, reportedly, had borrowings from IBRC of over €100m and the channel’s ultimate owner, private equity group, Doughty Hanson bought the loan from the bank’s special liquidators, KPMG at auction. “The refinancing of TV3’s debt has strengthened the balance sheet, while the brand has grown to be the strongest in the television market for adults under 45. We have accelerated earnings growth in 2014, while developing the new majority-originated schedule for 2015,” said TV3 chief executive, David McRedmond. The new figures show a 19% drop in annual operating profits to €1.11m and a 3% dip in turnover to €55.9m, but a fourth consecutive year of earnings growth, as EBITDA hit €6.6m.
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OIL PRICE FALL STARTS TO WEIGH ON BANKS - Banks including Barclays and Wells Fargo are facing potentially heavy losses on an $850m loan made to two oil and gas companies, in a sign of how the dramatic slide in the price of oil is beginning to reverberate through the wider economy. Details of the loan emerged as delegates of Opec, the oil producers’ cartel, gathered in Vienna to address the growing glut in the supply of oil, says the Financial Times. Several Opec members have been calling for a production cut to shore up prices, but Saudi Arabia, Opec’s leader and largest producer, signalled that while there was a consensus among the cartel’s Gulf members they would not clarify if that meant a push for a big change in the group’s output targets. Repercussions from the decline in the price of crude, which has dropped 30% since June, are spreading beyond the energy sector, hitting currencies, national budgets and energy company shares. The price slide is having a serious impact on oil producers that rely on revenues from crude exports to balance their budgets. The Russian rouble has lost 27% of its value since mid-June, when crude began to fall, while the Norwegian krone is down 12% and on Wednesday the Nigerian naira touched a record low.
