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- Citigroup launches $3 billion equity offering
To capitalize on investor appetite and bolster its balance sheet, Citigroup has launched a $3 billion equity offering. The move, which sent Citi shares down in after-hours trading, follows its issuance of $6 billion in preferred shares last week. Citigroup has raised almost $40 billion in the past few months, after suffering hard blows in the credit crunch. Analysts doubt raising another $3 billion will do much for the beleaguered financial giant.  ClipSyndicate/Bloomberg
(4/29), Financial Times (free content)
(4/30), Reuters
(4/29)     
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Report: Citigroup financing LBO debt sales: Citigroup Inc. is offering below-market terms to trim its $26 billion in leveraged buyout loans, sources told Bloomberg. Citigroup sold $8 billion of the debt to private-equity firms this month only after giving buyers $6 billion of financing at cheaper rates than it can borrow itself, the sources said. Citigroup was stuck with $69 billion of LBO debt when credit investors began fleeing in 2007 to safer bonds and refused to buy the debt, rated below Baa3 by Moody's Investors Service and BBB- by Standard & Poor's. Bloomberg
(4/29)
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- Fed faces risks with any potential move on interest rates
The Federal Reserve will probably cut the federal funds rate to 2% today, Fed watchers agree, although there is no obvious course of action for the policymakers. "There are still enough problems out there for them to be concerned about the risks to growth," said Peter Hooper of Deutsche Bank Securities. "The odds aren't overwhelming, but they favor cutting further." After six consecutive rate cuts, however, the Fed may decide to hold off, while signaling its readiness to cut rates in the future if the economy worsens. The Washington Post
(4/30)
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- Analyst: Investors should look for REIT bargains
Greg Sukenik, Zacks senior real estate investment trust analyst, thinks investors may be able to find some bargains in the sector. "REITs are generally well capitalized and have low debt levels compared to private owners, so we do not expect any large property REITs to get into liquidity problems in the current economic downturn," he said. Sukenik is expecting first quarter earnings growth between 3% and 5% for the REITs Zacks covers. Zacks
(4/30)
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- Partnership gets approval for $1.8 billion Canadian project
League Assets Corp. and Turner Lane Development Corp. received a rezoning approval that brings them one step closer on the development of Colwood City Centre, a $1.8 billion mixed-used development Colwood, Victoria, Canada. The proposal includes 11 towers ranging from 12 to 29 stories, several low-rise commercial and retail podiums, and 3.2 million square feet of space. Commercial Property Executive
(4/29)
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| Policy Watch | | |
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- Treasury supports new regulatory powers for Fed
The Treasury said the Federal Reserve could, through proposed regulatory powers, curb excesses in the credit and asset markets so they don't threaten overall economic stability. A Treasury official said the Fed could use the enhanced authority to force financial institutions, including banks and hedge funds, to rein in practices that threaten financial stability. The proposals are part of the Treasury's blueprint for an overhaul of market regulation, which was published last month. Financial Times (free content)
(4/29)
- Bernanke may need to look to Volcker's precedent
Avoiding a big recession may require enduring a small recession. Federal Reserve Chairman Ben Bernanke is being urged to follow the lead of former chair Paul Volcker, who helped the economy bail itself out in 1980 by pushing the overnight lending rate to 20%. But some say the two time periods have stark differences. Bloomberg
(4/28)
- Column: Government mortgage bailout won't help all
FDIC chief Sheila Bair, writing in a Financial Times commentary, says it's questionable whether government programs "can, or should, help borrowers who view home ownership as a leveraged investment." The current slump in U.S. housing prices is a much-needed adjustment. "Congress and the White House are moving forward with ... proposals (that) are laudable and will help some borrowers, but they have generally acknowledged limitations," Bair said. Financial Times (free content)
(4/29)
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