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Alpha Bank

Piraeus Bank announced the launch of a new bond issue that totals 500 million Euros. On the 9th of September, the bank published a press release which claims the great success of the new 3 year senior bond issue. The bond was issued under Piraeus Bank’s Euro Medium Term Note programme and it was accepted with great interest by the international markets.

In just a few hours the orderbook was oversubscribed by 1.5 times (730 million Euros). Almost 65% of the total amount was finally allocated to international investors from 20 different countries.

The new 3 year bond is a fixed rate note with a coupon of 4% and shall be listed on the Luxembourg Stock Exchange. The transaction was lead-managed by Barclays, Citigroup Natixis and UBS.

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GM had so far used up $19.4 billiion in US Treasury loans but billions more are needed to keep the giant running. So the suggested a deal to their existing bondholders… an exchange offer that got easily rejected.

The 100 year old automaker has been trying to convince its bondholders to exchange their debt for equity in a newly formed company but as bondholders spurn the debt offer the company is heading for dead end and the bankruptcy filing is now certain, said analysts and laywers.

The German government has not taken the news lighthearted and is trying to protect GM’s Opel unit by splitting the carmaker off from its US based parent company after 80 years. The Chancellor Angela Merkel is the hostess of a metting taking place in Berlin later today where the future of Opel will be discussed. Ultimate goal would be to place Opel in a trust to receive further bridge financing of over $2 billion, governmental spokesperson Thomas Steg said.

GM, the US parent is supporting this act by transferring its European assets such as sales force, technology and plants to Adam Opel. GM Europe spokeswoman Karin Kirchner believes that this move will help ring-fence the Europen Open/Vauxhall operations from the prospective bankruptcy.

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USDJPY is higher as Japanese Finance Minister Nakagawa said he would resign after budget bill had passed through parliament. Nakagawa’s decision comes after he was seen slurring his speech at G7 which he stated is due to ill-health.

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New scandals are being reported every day and UBS is making the headlines. The European bank with the biggest writedowns and losses from the credit crisis is currently under investigations for allegedly operating a tax haven scheme, helping 20,000 of its wealthiest clients to evade US tax laws. Earlier in the year, the Swiss banking group had received a bailout of $59.2 billion from the Swiss government that is now demanding they reduce bonuses. However, the bank will once again have it its way as it announced it cut its bonus pool for the whole company by 80%, excluding US brokers.

Is that enough and what does this exclusion include? The exclusion rule fits in perfectly with UBS’s hiring strategy! The largest Swiss bank is now said to have lured employees from Goldman Sachs and Morgan Stanley by offering signing up bonuses of as 260% of the revenue the brokers managed to bring in over the past year. UBS is also known as the world’s biggest manager of money for the rich.

Credit Suisse Group, Switzerland’s second-largest bank has announced plan to cut bonuses for investment bankers in half. The expected cut of around 55% is in line with the $13.6 billion of credit writedowns and losses reported by the group. Deutsche Bank, Germany’s largest lender is also expected to slash its bonus pool by almost 60% after reporting a record loss.

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“There’s an orderly way to do bankruptcies that provides for more of a soft landing,” Ms. Perino, a spokeswoman for President Bush, “I think that’s what we would be talking about. That would be one of the options.”

In February last year, General Motors reported a fourth quarter’s loss of $722 millions which signalled the threat of bankruptcy. Five months later, analysts warned investors that the crisis is going to be deep and will certainly hit the automakers. The worst scenario was being materialised and General Motors was slowly but steadily running out of cash.

Ford Motor Co, the second biggest auto manufacturer in the US, has declared that it has the capacity to continue operating without any financial aid for the time being.

The TARP (Troubled Asset Rerlief Program) funds was GM and Chrysler’s only hope. The real threat to the economy is the loss of million of jobs. The bailout has finally been approved, after it’s been rejected last week, and a total of $13.4 billion in government loans is set to keep the giant automakers alive for another three months. By the end of March, the companies will need to demonstrate financial viability or the loans will be called.

Don’t expect though a happy merry Xmas for everyone. GM and Chrysler could still end up in bankruptcy…. we’ll all know more after the scrutinisation of the automakers’ books and numbers.

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Sterling continues to suffer from expectations that the UK economy will have a deeper recession and that the Bank of England will have to cut rates more aggressively than its European counterparts. The pound declined against all 16 of the major currencies. It has lost 1.7 percent of its value against the USD and about 1 percent against the EURO. The British currency was hit by reports that showed UK services sector sank at a rate of knots, reporting record falls across activity, employment and new business, as consumer confidence continues to deteriorate.

The BOE are expected to slash rates again by a full one percent tomorrow bringing the base rate down to an unprecedented 2%. Former U.K. policy maker Willem Buiter said yesterday the central bank may reduce the benchmark rate to zero early next year. The Pound traded between 1.4934 and 1.4862 respectively.

The Nationwide consumer confidence index fell to 50 last month, its lowest level since records began as the impending recession puts fear over jobs in the spotlight. Another survey showed that British recruiters reported a record fall in job appointments and wages in November.

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Now, the day has come that other troubled companies also saw reason and ask to be baptised “bank holding company”. It’s like I can hear them screaming “Please save us- save us – not them- us-why them- and not us – Pleeeeease save us!”. GMAC LLC, General Motor’s car dealers’ largest lender has asked for permission to be treated as a bank holding company so it can get access to the Treasury’s big fat pot of $700 billion –I have to say this pot sounds empty already to me.

The lender is also trying to swap debt and raise cash as quickly as possible by disposing a business unit earlier this month. The lender is looking to avoid a possible cash squeeze by agreeing to sell another two insurance units in due course.

The Treasury’s $700 billion rescue fund announced in October and set to revive the financial industry, includes $125billion that were originally supposed to provide relief to smaller regional lenders. In the next few weeks, we will definitely see more insurers, lenders and other finance companies converting into banks to become eligible to join the scheme.

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These cuts come in addition to headcount reductions that have been disclosed earlier this year, Chief Financial Officer Colm CKelleher said at a Merrill Lynch & Co banking conference that took place in New York today.

The ex-investment bank’s plans can be found on the company’s website including information on the company’s future plans for survival amid the current economic environment. The areas to be reshaped include proprietary trading, principal investments, commercial real estate origination and prime brokerage, while the company is looking to maintain and even grow areas such as cash trading, equity derivatives, foreign exchange, rates, commodities, corporate credit, mergers and acquisitions and of course capital raising.

The latter is quite interesting as a concept taking into account the unprecedented illiquidity in financial markets and the absolute loss of investor’s trust and confidence in the global financial model/system.

Morgan Stanley stock is now trading at $13.19, and has lost 75.26% (or $39.97) of its value from the beginning of the year.

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Ford Motor Co

Ford has reported a Q3 loss of $1.31 ex items, worse than analyst expectations for a loss of $0.93 and has also stated it is seeking government loans in Europe.

For the Auto operations, pre tax loss of $2,906mn vs a pre tax loss of $362mn in Q3 07.

• North America pre tax loss of $2.6bn – looks a bit better than expected. Unfavourable volume and mix, unfavourable net pricing.
• South America pre tax profit of $480mn – looks a bit better than expected
• Europe: pre tax profit of $69mn – looks worse than expected. Mainly due to negative cost changes and FX, but net pricing was better.
• Asia Pac: pre tax profit of $4mn – looks a bit worse than expected
• PAG (Volvo): pre tax loss of $458mn due to unfavourable volume and mix – looks worse than expected
• Pre tax loss of $411mn

Automotive gross cash position of $18.9bn (down from $26.6bn at the end of Q2) and available credit lines of $10.7bn. The decline in cash reflects automotive pre tax operating losses, changes in working capital as well as upfront subvention payments to Ford Credit.

Ford states that it is working on actions to improve Automotive cash by $14mn to $17bn through 2010 through head count reduction, reducing bonuses, reducing capex, improving working capital, through a return of capital from Ford Credit to FMC (through a smaller balance sheet at Ford Credit and a focus on core Ford brands), divesting non core assets, and reducing other costs such as IT, engineering and advertising costs.

The troubled carmaker stated that its actions are based on the premise that the industry downturn will be deeper, broader and longer than previously assumed. States that it expects industry volumes to decline in 2009 versus 2008 levels. They will also try to strengthen the balance sheet and will accelerate new product development.

Porsche’s profit on the other hand climbed a record 51% despite the sever drop in car demand since the credit crunch crisis rise. They also expect sales to fall in the following quarters amid a “serious setback” in the auto industry. Net income increased in the 12 months ending on the 31st of July to $8.16 billion (6.39 billion euros), a fifty percent rise within a year.

The main contributor that drove earnings to new sky highs is the sports carmaker’s Volkswagen AG holding which value rose substantially over the past period due to gains of about seven billion after a successful hedging investment strategy.

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