Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (5869)	3/20/2002 8:52:05 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

GE Capital Hires Banks for Yen Bond; Japanese Government Bonds Climb WSJ March 18, 2002 DOW JONES NEWSWIRES LONDON -- The Eurobond market readied for more jumbo issues as General Electric Capital Corp. hired banks for a yen Eurobond and German pharmaceutical giant Bayer AG started roadshows for its next bond. GE Capital, the financing arm of General Electric Co., mandated UBS Warburg and Tokyo-Mitsubishi International to lead manage a benchmark-sized Eurobond denominated in yen, the banks said Monday. The transaction is to launch and price this week, hot on the heels of the company's $11 billion (€12.5 billion) three-part global bond issued Wednesday, the largest ever in dollars. For investors looking for euros, Bayer's new offering will have multiple maturities in a sale expected to total €3.5 billion-€five billion. A roadshow starts in Munich Monday, with launch to come next week via Deutsche Bank, J.P. Morgan and Bank of America. The proceeds will be used to refinance a €6 billion credit line used in Bayer's pending acquisition of Aventis CropScience. Late Friday, Standard & Poor's made an expected downgrade to Bayer, to single-A-plus from double-A-minus. The company is rated single-A-2 by Moody's Investors Service. U.K. bank Lloyds TSB Group PLC and Swedish truck maker Scania AB were Monday's big issuers. Lloyds TSB issued 500 million pounds ($712.3 million or €628.7 million) of perpetual subordinated bonds that carry a call option in 2032 and every five years thereafter. They priced at 1.02 percentage points over the 4.25% June 2032 gilt. Scania CV AB sold €500 million of five-year bonds at a spread of 0.97 percentage point over midmarket swaps. Late Monday, the June German government bond future traded at 105.11, up 0.13. The benchmark 10-year government bond was up 0.09 from late Friday at 98.40, yielding 5.21% from 5.22%. The euro-zone inflation data for February left markets unmoved, despite a slight downward revision in the HICP rate to 2.4% from a provisional 2.5%. The data were largely interpreted to confirm the European Central Bank's outlook that inflation in the euro zone will fall safely below 2% in the near future. Japanese Government Bonds Japanese government bonds rose on some buying of midterm cash bonds, which sparked buybacks in futures contracts. The lead June 10-year futures contract gained 0.24 to 137.69, near its intraday-high of 137.71. The 10-year government bond's yield fell 0.01 percentage point to 1.445%, while the five-year's yield dropped 0.02 percentage point to 0.545%. The market faces downside risks as dealers start hedging ahead of a 10-year government-bond auction scheduled for Wednesday, said a bond manager at a securities house. On Wednesday, the Ministry of Finance will offer 1.8 trillion yen ($13.93 billion) of 10-year government bonds. Of this amount, the ministry will auction about 62%, up from 60% previously. The rest of the offer will be placed via an underwriting syndicate and distributed according to established proportions. Meanwhile, while fears of a financial crisis have waned amid a recent stock-market gains, the political base for Japanese Prime Minister Junichiro Koizumi is the shakiest since he took office. Koichi Kato, a former secretary general of the ruling Liberal Democratic Party and an old ally of Mr. Koizumi, resigned from the LDP on Monday in reaction to the arrest of one of his former senior aides on suspicion of tax evasion. Mr. Kato's resignation follows the party resignation on Friday of senior LDP lawmaker Muneo Suzuki over a series of scandals concerning improper involvement in Foreign Ministry affairs. The scandals surrounding the ruling party didn't help Mr. Koizumi's approval ratings, which plunged after he fired Foreign Affairs Minister Makiko Tanaka. Tanaka topped Koizumi in a weekend Jiji Press opinion poll asking respondents who would make the most desirable premier, marking the first time Koizumi was displaced from top spot since becoming prime minister last April. Meanwhile, the Koizumi administration received more bad news on Monday, when ratings agency Standard & Poor's said Tokyo's antideflation steps are inadequate. Persistent deflation could pressure Japan's current double-A sovereign rating, S&P said. The next few months will be pivotal for Mr. Koizumi's policies, S&P said. S&P called for more aggressive easing by the Bank of Japan and government measures to deal with nonperforming loans. S&P suggested it might cut Japan's rating in midyear if tangible policy changes don't occur. The BOJ's policy board is scheduled to meet Tuesday and Wednesday, but is expected to maintain current policy as the money market is stable and stock prices have been rising. Updated March 18, 2002 4:36 p.m. EST

To: John Pitera who wrote (5869)	3/20/2002 10:41:44 PM
From: Perry Ganz	Read Replies (1) \| Respond to of 33421

Hi John Any chance Mr. Gross as a holder of bonds was not to happy about 11 billion coming to market? I see he stooped so low as to quote Gretchen Morgenson. Did you see the hatchet job she did on Calpine at the peak of the Enron feeding frenzy. Created quite an opportunity I just don't trust any of "them" anymore Perry Yep, I am biased have some of my sons college money in GE

To: John Pitera who wrote (5869)	3/22/2002 1:05:24 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 33421

I see you found that Bill Gross article about GE as fascinating as I did... I thought it was rather interesting as well to hear his point about the quality of GE's commercial paper and the ratio being 3 times normal. This guy obviously has just a bit of pull in the bond markets, if he's able to make GE jump through hoops to issue longer term debt to boost their commercial paper status. Hawk

To: John Pitera who wrote (5869)	3/25/2002 12:06:52 AM
From: Raymond Duray	Respond to of 33421

Hi John, Thanks for posting the Gross comments. I was about to do the same. :) I find that what you bolded was exactly spot on as far as emphasis is concerned. Re: GE's CEyoyo - Years ago, I lived in San Francisco and loved reading the Chronicle's Herb Caen in the mornings. He has a special part of his column devoted to Name Phreaks, like the three-fer of the B&B called the Lamb Inn on Sheep Lane owned by Dave De Wolf in rural Ireland. When I think of Caen, and I think of Immelt, I think oy vey! -Ray

To: John Pitera who wrote (5869)	5/29/2002 10:19:31 AM
From: John Pitera	Read Replies (1) \| Respond to of 33421

GE to offer 6 billion in bonds -- continuing to work down those huge unsecured Commercial Paper to Bank line Ratio. ------------------------------------------------ GE Capital Plans to Sell $6 Billion Of Bonds Amid Slow Debt Market By RICHARD A. BRAVO and NICOLE BULLOCK DOW JONES NEWSWIRES NEW YORK -- The General Electric Capital unit of General Electric Co. plans this week to sell $6 billion of debt securities, underwriters familiar with the deal said. Some people said the offering would garner interest even after the company irked investors in March by saying it planned to sell a large amount of bonds shortly after making one of the largest debt issues ever. Analysts said General Electric Capital's newest deal would draw buyers in part because there hasn't been much corporate-bond issuance recently. Some added that the company has taken steps to reassure bond investors recently. GE'S DEBT • Why Bond Guru Gross Decided to Attack GE's Finance Practices 03/22/02 • Fund Manager Gross Lashes Out At GE Over Disclosure, Debt Load 03/21/02 • GE Capital Sells Largest Issue Ever Denominated in U.S. Dollars 03/13/02 Among other things, they said, it has increased financial disclosure and vowed to keep its triple-A ratings. It also recently arranged an $18 billion syndicated credit facility aimed at improving its liquidity position. "We imagine that this deal will go well because of the positive technicals and some appeasement by GE of investors," said David Hendler, analyst at CreditSights, a bond-research firm. "Investors won't dwell on some of those past issues." Mr. Hendler said investor demand for bonds issued by financial companies also has strengthened recently. "There has been a sector switch into financials, which have tightened since earnings were released in April," he said. A tightening refers to the difference between yields of corporate bonds and Treasurys. A narrowing of that margin, the so-called spread, suggests that the market views the corporate bonds as slightly less risky. In March, GE Capital sold $11 billion in debt, in the largest domestic dollar-denominated debt offering ever. But the securities then weakened in trading after the company disclosed that it had made a $50 Billion shelf offering. GE drew fire from Bill Gross, a funds manager at Pacific Investment Management Co. whose views carry much clout in the bond market. Mr. Gross said *GE was overly reliant on issuance of short-term debt that wasn't fully backed by bank lines.* On Tuesday afternoon GE Capital's outstanding 10-year debt was quoted at a spread of around 0.95 percentage point over Treasurys, while its 30-year securities were at a spread of around 1.16 percentage points over Treasurys. Banc of America Securities, Credit Suisse First Boston Corp. and Morgan Stanley are co-leads on the upcoming deal, which was expected to include five- and 10-year securities. Meanwhile, in trading, investment-grade corporate bonds generally weakened slightly during a "pretty uneventful day," said Mark Humphrey, senior corporate-bond trader at Wachovia Securities. In high-yield bond trading, Adelphia Communications bonds lost ground after a Securities & Exchange Commission filing detailed company payouts to members of the founding Rigas family for private ventures. Still, the bonds held up fairly well despite a sharp decline in the company's stock, traders said. That is partly because the bond market is waiting for word on planned asset sales and a 10K filing, they said. Adelphia's 10 7/8% notes due 2010 were quoted down one to two points, bid at 75. Separately, Williams Cos. bonds rallied on news that the company plans to raise cash to cut debt and was committed to keeping its investment-grade ratings. Williams 8 1/8% notes due 2012 jumped to about 98 bid from the low to mid-90's late last week. online.wsj.com