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Arts, Briefly: London Underground Vetoes Poster Of Nude
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Google Shares Surge
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Convertible News

Traditional Feng Shui

Lehman Tries to Quash Talk by Raising $3 Billion

The bank raised the money by selling new convertible preferred shares, an effort to quiet talk on Wall Street that it might be the next investment bank to run into trouble.
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Lehman to Raise $3 Billion in Stock Sale

Beset by speculation that it did not having enough funding, Lehman Brothers said it was issuing $3 billion of convertible preferred shares.
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Island outcast on the brink as its people clamour for a better life

On the last day of 1958, Cubans, exhausted by the repression of the Fulgencio Batista regime, welcomed in a new hope, a new beginning, in the form of Fidel Castro, his brother Raúl and Che Guevara. They hoped that the trio would generate wealth, stability and freedom. They did not get it. Fifty years on, the grandchildren of the Cuban Revolution are awaiting another beginning. Last weekend, Raúl Castro, the newly appointed President of Cuba, hinted at the unthinkable. In his first speech to the National Assembly, he hinted that he may draw an end to rationing and introduce reform into the farming sector – reform that he introduced in the 1990s to stop Cubans from starving, a move that was rescinded by his elder brother. He also reiterated his admiration of the Chinese model of economic reform – a model that has allowed foreign companies to take minority stakes in state-owned businesses. His comments sparked speculation that Raúl may emerge as the leader that the nonsocialist world has been waiting for. His speech triggered a debate over whether he may be minded to open Cuba to wider foreign investment. Mauricio Font, of the City University of New York, said: “The Cuban economy has no choice. Raúl has acknowledged this. Cuba has exhausted its savings, and investments have to come from somewhere. They are no longer able to generate sufficient savings on their own. They have to look to outside.” It is not only Raúl’s words that have given Cubans cause for hope. He has already taken steps to decentralise the production and distribution of milk within an economy that is 97 per cent controlled by the military and perceived as the most centralised socialist state in the world. Although Cuban experts broadly agree that economic reform will not happen overnight, many of them believe that Raúl will head for a short-list that includes the end of rationing, agricultural reform, incentives for remittance payments (expatriates sending money home) and, most critically, opening the door to foreign investment. Cuba already has a few foreign partners - Venezuela, China, Canada, Spain and Brazil – which invest in oil and tourism across the island, but for the country to expand, Raúl will have to coax more funding from its existing commercial allies and broaden the pool of investors. One of the world’s leading experts on Cuba, Jorge Castañeda, the former Foreign Minister of Mexico, said: “Since what they have now doesn’t work, they have to do something. But what the Chinese do isn’t recessarily an option for Cuba. China is very big and has conducted its reforms over a long period. “Raúl has to widen the pool of countries allowed to invest in Cuba. He must extract funding from Europe and beyond, not just from Mexico, Brazil and Spain. Part of the problem is that Raúl would like to implement the economic reforms of China without the political reforms.” Raúl needs no reminding of the perils of depending on too few trading and investment partners. Until the collapse of the Soviet Union, the Kremlin was Cuba’s biggest customer, buying 85 per cent of the island’s exports, principally sugar, in return for cheap oil. In the 1990s, as glasnost foreshadowed the disintegration of the Soviet empire, Cuba’s foreign market disappeared and Cubans starved. Although Venezuela and China took the place of the Soviet Union – Cuba pays for Venezuelan oil with doctors – and Canada and Spain were allowed to build hotel resorts along the Cuban coastlines, the foreign investment was too limited to offset Havana’s sliding economy, principally oil, tourism and farming. After 2002 the Castro regime stopped using United Nations measures to calculate GDP, so economists stopped using Cuban numbers. Critically, Raúl has already said that he will try to remove restrictions that stifle growth and noted that it was time to revalue the Cuban peso. Havana operates a debilitating dual-currency system whereby Government salaries are paid in the almost worthless peso while the administration restricts the distribution of the convertible peso, which can be exchanged for foreign currency. The system led to government workers being far worse off than those who earn the convertible currency, barely able to subsist even with their monthly ration books. After Raúl’s speech last weekend, the University of Miami convened a talk to mull over his succession. Most of the speakers gave warning that although change was inevitable, it would not happen overnight, as Raúl struggled to appease hardliners, the leader of whom is his brother. At the conference, Jaime Suchlicki, the director of the Institute for Cuban and Cuban-American Studies at the University of Miami said: “What I expect is that he [Raúl] will open up the rural areas for more privatisation in the agricultural [sector], he may open up to some foreign investment, particularly in offshore petroleum [drilling] and, in limited ways, in the tourist industry. But we don’t see at this point any move towards a market economy and certainly no move towards major political changes.” So is Cuba on the brink of significant economic change? “Cuba is unpredictable,” Professor Castañeda said. “Normally, you would expect incremental change, along with a honeymoon period. But it could start tomorrow morning. Cuba is so closed, we have no way of knowing what the Cuban people are really thinking. So who knows?” Life and times Revolution, 1959-89 Fidel Castro becomes President in 1959, with his brother Raúl as deputy. In 1960, all business is nationalised with no compensation. In 1972, Cuba becomes a full member of Soviet-based Council for Mutual Economic Assistance Collapse, 1989-93 Cuba’s economy collapses as the Soviet Union – accounting for 85 per cent of Cuba’s exports - disintegrates. Moscow stops buying sugar. Cubans starve “The special period”, 1993-96 Raúl Castro starts programme of modest privatisation in farming. Lets farmers profit from selling produce, after paying tax to Havana. Raúl allows Spanish and Canadian tourist companies to develop hotels and resorts. Cubans start modest enterprises, such as selling fast food on streets. By 1996, GDP estimated to have grown by 8 per cent Retrenchment and Decline, 1996 to present Raúl’s reforms stagnate. In 2003, Fidel reverses them. Fidel recentralises decision-making, abolishes dollar as legal tender and cuts small private sector. Regime becomes more repressive. Economy slows, but Venezuelan oil and Chinese money help prop it up
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Legg Mason Makes Deal With Equity Firm

The asset management firm Legg Mason said on Monday that it had sold $1.25 billion in convertible senior notes to an affiliate of the private equity firm Kohlberg Kravis Roberts & Company.
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UBS admits that it still cannot quantify its exposure to sub-prime crisis

The cloud of uncertainty hanging over the credit markets was thrown into sharp relief yesterday as UBS told investors that it still could not be sure about the full financial impact of the credit crunch. UBS is preparing for writedowns of $13.4 billion ($£6.8 billion) against its exposure to the downturn in American sub-prime mortgages. The Swiss bank wrote to investors yesterday telling them that it could not rule out having to record further losses. “We cannot, at this time, accurately predict the future development of US residential mortgage markets and therefore the ultimate impact on our positions in sub-prime mortgage related securities,” the bank told investors in a letter signed by Marcel Ospel, the chairman, and Marcel Rohner, the chief executive. Analysts said that UBS’s uncertainty about its financial position underscored the wider nervousness about the credit markets, amid predictions of a fresh round of losses when banks begin to report full-year results in coming weeks. Alex Potter, at Collins Stewart, said: “I think in general terms that it is still clear that it will get worse before it gets better. In short: expect more writedowns.” UBS was writing to shareholders to try to secure support for a SwFr13 billion (£6 billion) capital injection from a Singapore sovereign wealth fund and a mystery Middle East investor. Late last year the bank said that the Government of Singapore Investment Corporation would inject SwFr11 billion for a stake of about 9 per cent. An unnamed investor from the Middle East, thought to be the Saudi Arabian Monetary Agency, would contribute a further SwFr2 billion for an additional small shareholding, it said. Some shareholders objected to the terms of the financing, which involves the issuance of securities convertible into UBS shares. They threatened to vote down the deal at a special meeting next month unless they were given more details. Stating its case for the investment, UBS admitted in its letter that it had considered a rights issue to stabilise the balance sheet when it realised it was heading for heavy losses. It rejected this on the grounds of “cost, complication and time”. The bank said that it also feared international credit agencies might down-grade its ratings as a result of the losses. This would weaken its funding position and drive up its cost of borrowing on wholesale money markets. UBS acknowledged that it had concerns about the possibility of “unease” among clients and stakeholders because of the extent of its suffering at the hands of the market turbulence. “In view of these adverse market developments, it became increasingly evident that substantial additional writedowns would be required,” the bank wrote, in reference to the sustained money market liquidity crisis in October, November and December. “We then knew that we faced the risk that the sheer size of these numbers, the resulting reduction in our capital ratios and any remaining uncertainty about the ultimate value of our positions could lead to an increased unease for clients and other stakeholders.” UBS has been among the investment banks hardest hit by the credit crunch and has maintained that it needs the capital injection to shore up its financial strength. “During 2008, the environment for financial markets, especially in the US, is uncertain, and we need to manage through this period from a position of financial strength,” it said. A spokesman for the bank said it was not concerned about the possibility of a shareholder rebellion. He said that UBS was updating investors about the terms of the financing and the letter was in line with its desire to be transparent. Investors accounting for two thirds of the share capital need to approve a capital issue in order for the funding to go ahead.
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External News for: convertible

CSG Systems Repurchases $120 Million of Convertible Contingent Debt Securities - MarketWatch (press release)

CSG Systems Repurchases $120 Million of Convertible Contingent Debt SecuritiesMarketWatch (press release)The CODES repurchase transaction and the Convertible Notes transaction are expected to have an aggregate negative impact on CSG's GAAP earnings per share ...Market Report -- In Play (CSGS)MSN Moneyall 10 news articles »

CSG Systems Repurchases $120 Million of Convertible Contingent Debt Securities - MarketWatch (press release)

OSI Pharmaceuticals Announces Details of Redemption of 3.25% Convertible ... - MarketWatch (press release)

OSI Pharmaceuticals Announces Details of Redemption of 3.25% Convertible ...MarketWatch (press release)... 2010 all of its remaining outstanding 3.25% Convertible Senior Subordinated Notes due 2023 (the "Notes") pursuant to the terms of the indenture under ...OSI Pharma Balks at Astellas' AdvancesSeeking Alpha (blog)all 14 news articles »

CSG Systems Repurchases $120 Million of Convertible Contingent Debt Securities - MarketWatch (press release)

OSI Pharmaceuticals Announces Details of Redemption of 3.25% Convertible ... - MarketWatch (press release)

LTC Declares Quarterly Cash Dividends on Its Series E Cumulative Convertible ... - MarketWatch (press release)

LTC Declares Quarterly Cash Dividends on Its Series E Cumulative Convertible ...MarketWatch (press release)... announced today that it had declared the quarterly cash dividend of $0.53125 per share on its 8.5% Series E Cumulative Convertible Preferred Stock. ...and more »

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