The News Review:
- Fed to auction $50 bln at short-term auctions in April
- Auction Failures at 71% as Dallas Airport Refinances (Update1)
- Legg tries to sort out auction rate securities mess
- Auction-Rate Problems Hit Corporate America Harder
- UBS Cuts 5% From Clients’ Auction-Rate Bond Valuation (Update3)
- Greece to auction 340 mln eur of T-Bills on April 1
- Bank of Italy 7-year T-cert auction 104.8 pct oversubscribed, yield…
Fed to auction $50 bln at short-term auctions in April
MarketWatch – Mar 28, 2008
The loans are being offered as part of a special term auction facility to help alleviate liquidity problems in global financial markets stemming from losses due to risky mortgage-backed securities. As in the previous auctions, banks will bid on the 28-day credits, with all winning bidders paying the same interest rate. The auctions will take place on April 7 and 21. The Fed said it would conduct such auctions for as long as necessary.
Related: Belchertown golf course set for auction April 24
Auction Failures at 71% as Dallas Airport Refinances (Update1)
Bloomberg – Mar 28, 2008
Cooke and Darrell Preston March 28 (Bloomberg) — Auction-rate bond failures rose toabout 71 percent this week, leading borrowers from Dallas andFort Worth's airport to Ascension Health in Missouri torefinance the debt and avoid paying penalty interest rates. The number of auctions that failed to draw enough buyers toa market that also includes debt of student lenders and closed-end mutual funds increased from 69 percent last week, accordingto data compiled by Bloomberg. Rates are set through a biddingprocess managed by banks typically every seven, 28 or 35 days. States and municipalities are fleeing the auction-ratemarket after it began collapsing about seven weeks ago asinvestors balked at buying the securities on concern about thecreditworthiness of bond insurers guaranteeing the debt. Dealersstopped purchasing the unwanted debt, and the average rate forweekly municipal auction bonds rose to 6.
Legg tries to sort out auction rate securities mess
MarketWatch – Mar 28, 2008
EDT March 28, 2008
NEW YORK (MarketWatch) — Asset manager Legg Mason said Friday it is urgently trying to generate liquidity for shareholders of seven closed-end funds it manages that collectively own more than half a billion dollars of unsellable auction-rate preferred securities
“Legg Mason is fully aware of the urgency to resolve this situation, and of the uncertainty, frustration and difficulties these failed auctions have caused for shareholders of these securities, and is committed to explore any and all possible solutions that are equitable to both the preferred and common shareholders of these funds,” the company said in a press release. Together, Legg said the funds own about $672 million of the securities. Closed-end funds are different from their cousins, mutual funds, because they do not continuously offer shares for sale.
Auction-Rate Problems Hit Corporate America Harder
MarketWatch – Mar 28, 2008
Their case will be that, in a market which has operated since 1985. the financial firms presented the paper as cash-equivalents. Getting in and out of the instruments was easy, and took, at the most, a few days. The banks walked on the market when its was clear that their balance sheets had been torn to pieces.
UBS Cuts 5% From Clients’ Auction-Rate Bond Valuation (Update3)
Bloomberg – Mar 28, 2008
Cataldo and Martin Z. Braun March 28 (Bloomberg) — UBS AG has cut the value of theauction-rate securities its customers have in their accounts byabout 5 percent following more than a month of market upheaval. “This is the right thing to do,'' said.
Greece to auction 340 mln eur of T-Bills on April 1
Forbes – Mar 28, 2008
The PDMA said it will auction 70 mln eur in 52 week T-Bills, 120 mln eur in 26 week T-Bill, and another 150 mln eur in 13 week T-Bills. Settlement date is Friday, April 4, and under the auctioning rules the PDMA may accept a further 68 mln eur amount non competitive bids by Thursday, April 3. The auction will also be open to retail investors that can subscribe for T-Bill amounts up to 15,000 eur.
Related: Belchertown golf course set for auction April 24
Bank of Italy 7-year T-cert auction 104.8 pct oversubscribed, yield…
Forbes – Mar 28, 2008
8 pct oversubscribed while the yield rose from the previous auction. The price established was 100. 25 for a gross yield of 4. 42 pct compared with 4.