According to The Wall Street Journal, Greenwich Leisure Ltd. is offering some of its half a million or so members a quirky way to get a month’s free gym membership every year for the next five years: buy its bonds.
The London-based sports center-to-libraries operator is among a small but growing band of U.K. social enterprises and charities tapping the bond market to raise cash from investors who are seeking more ethical ways to generate returns.
It comes at a time when the U.K. government is cutting funding to local authorities, placing more of a burden on charities and other community organizations to step in and provide services that were previously offered by local councils. For social enterprises such as Greenwich Leisure, bonds are an attractive way to raise large sums of cash quickly when other financing options, such as bank loans, are limited.
“The market is slowly but definitely growing,” said Bryn Jones, a fund manager at Rathbone Brothers PLC, whose ethical bond fund manages about £132 million ($213.4 million).
Mr. Jones said his fund has been buying social housing bonds since 2002, but more recently, there has been a rise in deals from smaller charities too. Disability charity Scope came first in 2012, and this year has seen deals from Mencap, a charity for people with learning disabilities, and Midlands Together, which provides training and mentoring for ex-offenders. Two more deals, including Greenwich Leisure’s, are currently in the market. Mr. Jones says his fund is looking to buy some of the latter’s bonds.
Posted in Bond, Bond Market, European economy, Finance, UK
Tagged are low, Avante Partnership, bank loan, Because Greenwich Leisure, bond market, bonds, Bristol, Charity, corporate finance, Dan Hird, Federal Open Market Committee, Federal Reserve System, Golden Lane Housing, Greenwich Leisure, interest-rate, London, Mencap, Philanthropy, Southeast England, Triodos Bank, UK
Which U.S. cities are lagging behind according to selected 2012 measures of fiscal health. (The Wall Street Journal)
According to The Wall Street Journal, American cities’ fiscal health is lagging behind other sectors of the economy as the recovery slowly takes hold.
Buffeted by steep drops in state aid, rising pension and health-care costs and sluggish property-tax revenue, many urban centers are struggling even several years after the financial crisis.
“We think we saw the bottom, knock on wood,” said Robert Chisel, director of finance and administration for Reno, Nev. But, he said, “We’re not going back to the old days. We all know that.”
Local officials hasten to distinguish their cities from Detroit, which this summer became the largest-ever U.S. municipal bankruptcy case. Most won’t get to that point: just 63 cities, towns and villages, including Detroit, have filed for municipal bankruptcy protection since 1954, said Chicago lawyer James Spiotto, who tracks the sector.
But an analysis by The Wall Street Journal of financial data from the nation’s largest cities shows that many of them are wrestling with the same types of issues that sank Detroit. The data were provided by Merritt Research Services LLC, an Iowa research firm that mines cities’ financial filings. Merritt examined 2012 filings from the 250 largest U.S. cities by population. A handful, including Baltimore, Milwaukee and Dayton, Ohio, weren’t available by August 2013, when Merritt collected the information.
Posted in Finance, Financial Crisis, Investment Banking, U.S.
Tagged Allentown, American city, Baltimore, bankruptcy, cash-flow problem, Congressional Budget Office, Dayton, Detroit, Financial Crisis, fiscal health, Illinois Municipal League, James Spiotto, Joe McCoy, long-term fundamental credit, Magan Marie Drane, McDonnell Investment Management, Merritt Research Service, Milwaukee, Moody's, Moody’s Investor Service, National Association of State Budget Officers, Nelson A. Rockefeller Institute of Government, Ohio, Pew Charitable Trusts, property-tax revenue, Real Estate, Reno, Richard Ciccarone, Robert Chisel, Scott Pattison, William Voorhees
According to The Wall Street Journal, J.P. Morgan Chase & Co. on Friday agreed to pay $5.1 billion in settlements with the regulator of mortgage-finance companies Fannie Mae FNMA +13.40% and Freddie Mac.FMCC +11.89%
The pact with the Federal Housing Finance Agency includes $4 billion to settle a lawsuit alleging the bank misled Fannie and Freddie about the quality of securities J.P. Morgan and two other banks it later acquired had sold to the housing-finance giants during the housing boom. The deal also includes $1.1 billion to settle separate demands from Fannie and Freddie that J.P. Morgan buy back loans that the housing-finance companies said had run afoul of their underwriting standards.
“This is a significant step as the government and J.P. Morgan Chase move to address outstanding mortgage-related issues,” said FHFA Acting Director Edward DeMarco. Resolving the outstanding lawsuit “provides greater certainty in the marketplace and is in line with our responsibility for preserving and conserving Fannie Mae’s and Freddie Mac’s assets on behalf of taxpayers.”
The suit is the fourth of 18 filed by the FHFA in 2011 to be settled.
The settlement comes as J.P. Morgan tries to put as many legal woes behind it as possible. In the third quarter, it set aside $9 billion in additional legal reserves, giving it a total of $23 billion to absorb future settlements and lawsuits. In the last month, J.P. Morgan also agreed to pay more than $1 billion to end an array of investigations into a 2012 trading debacle that cost the bank more than $6 billion and which raised questions about governance and oversight.
Posted in Breaking news, Finance, Financial Crisis, Investment Banking, JPMorgan
Tagged Attorney General, Edward DeMarco, Eric Holder, Fannie Mae, FDIC, Federal Deposit Insurance Corporate, Federal Housing Finance Agency, FHFA, Freddie Mac, housing finance, J. P. Morgan, James Dimon, JPMorgan Chase, Justice Department, Lawsuit, mortgage backed security, mortgage finance company, Stephen Cutler, Tony West, Washington Mutual
According to Bloomberg, Goldman Sachs Group Inc. (GS) said J. Michael Evans, a vice chairman who ran emerging markets and was seen as a potential successor to Chief Executive Officer Lloyd C. Blankfein, is retiring after more than 20 years at the bank.
Evans, 56, will step down at the end of the year and become a senior director, the New York-based company said today in a statement.
Evans ran businesses including the securities division, equity trading and equity-capital markets in a career that featured positions in New York, London and Hong Kong. In 2011, he was named to lead the emerging-markets units as part of Blankfein’s push to be “Goldman Sachs in more places.”
“Michael’s deep commitment to the firm, his unrelenting focus on our clients and his broad global market knowledge have left an extraordinary mark at Goldman Sachs,” Blankfein, 59, said in the statement.
Posted in Finance, Goldman Sachs, ICBC, Investment Banking
Tagged Chief Executive Officer, E. Gerald Corrigan, emerging markets, equity capital market, Gary Cohn, Goldman Sachs, Hong Kong, ICBC, Inndustrial Commercial Bank of China, J. Michael Evans, Lloyd C. Blankfein, London, New York, Oxford University, Princeton University, Salomon Brothers, Securities and Exchange Commission
According to Reuters, JPMorgan Chase & Co’s preliminary $13 billion mortgage settlement with the U.S. government could end up costing the bank closer to $9 billion after taxes, because the majority of the deal is expected to be tax deductible, two sources familiar with the matter said.
The deduction also means the government is getting less than it appears in this deal. Banks can often deduct legal settlements from their taxes, but cannot get tax benefits from penalties for violating laws.
JPMorgan and the U.S. government have been negotiating the tax treatment of the settlement. The outcome could have a dramatic impact on exactly what the deal ends up costing the bank, how it is perceived by the public and whether it becomes a model for resolving government investigations of mortgage deals at other banks.
JPMorgan is negotiating the settlement with a group of government agencies led by the Justice Department, and the deal is expected to include a $2 billion penalty, one source said.
But another $4 billion of the deal, which will go toward aid for struggling mortgage borrowers, is tax deductible, another person familiar with the negotiations said.
Posted in Breaking news, Finance, Financial Crisis, Investment Banking
Tagged Bear Stearns, bond, Fannie Mae, Financial Crisis, Freddie Mac, Goldman Sachs, JPMorgan Chase, Justice Department, Obama, Robert Willens, Securities and Exchange Commission, Tax deduction, U.S. government, Wall Street, Washington Mutual