BNP Paribas Reports Record $5.79 Billion Quarterly Loss (WSJ)
The French lender said on Thursday that a provision of €5.75 billion ($7.70 billion) set aside to help cover a nearly $9 billion U.S. fine—the largest-ever paid by a bank in a sanctions case—had pushed the group deep into the red in the second-quarter. BNP Paribas, France’s largest listed bank by assets, reported a €4.32 billion net loss in the three months through June, compared with a €1.77 billion net profit a year ago. “The group has learned lessons from these past events and is implementing a major reinforcement of its internal control,” said Chief Executive Jean-Laurent Bonnafé in a statement. Despite the substantial size of the penalties, which also include a one-year ban on certain dollar-clearing transactions, BNP Paribas said it had enough cash set aside with central banks and capital to absorb any potential future losses.
Argentina’s Default Clock Runs Out as Debt Talks Collapse (Bloomberg)
The nation missed a deadline yesterday to pay $539 million in interest after two full days of negotiations in New York failed to produce an accord with creditors from its last default in 2001. A U.S. judge ruled that the payment couldn’t be made unless those investors, a group of hedge funds led by Elliott Management Corp., got the $1.5 billion they claimed. As Economy Minister Axel Kicillof returns to Buenos Aires with no set plans for further discussions with the hedge funds he described as “vultures,” other creditors must decide whether to invoke a clause that entitles them to demand their money back. While an 11th-hour attempt last night by a group of Argentine banks to avert a crisis by purchasing the securities from Elliott fell through, bondholders probably will give the parties more time to reach a settlement, according to Bank of America Corp.
First round of Buffalo Bills bids tops $1 billion (NYP)
A Pennsylvania fracking mogul bid more than $1 billion for the Buffalo Bills on Tuesday — making it likely the team will attract a record sales price for an NFL team, The Post has learned. Terrence Pegula, who owns the NHL Buffalo Sabres, is one of only two known bidders for the storied football franchise, which was put on the block last spring following the March 25 death of owner Ralph Wilson Jr. Donald Trump also made a first-round bid for the Bills — bids were due by 5 p.m. Tuesday. It could not be learned whether other bids were received by Morgan Stanley, which is running the auction. A bidding group fronted by rocker Jon Bon Jovi that includes Larry Tanenbaum, chairman of Maple Leaf Sports & Entertainment, owner of the NBA Toronto Raptors and the NHL Maple Leafs, and the Canadian telecom titan Rogers family, which controls Rogers Communications, was expected to bid. The Bon Jovi group is expected to try to move the team to Toronto. That has made Bon Jovi Public Enemy No. 1 in the western New York city, which loves its NFL team. “Man, f–k Bon Jovi,” legendary Bills receiver Andre Reed, who will be inducted into the Hall of Fame this weekend, told New York Magazine. “You might as well just take this city, throw it in the river, and let it go down Niagara Falls.”
Barclays Under U.S. Pressure (WSJ)
On Wednesday, the British bank presented better than expected second quarter earnings, with its shares rallying over 4% on the news that its investment bank performed well. But the numbers were partly overshadowed by a number of litigation and conduct issues which rather than fading, seem to be getting worse. Barclays said it had to put aside another £900 million ($1.5 billion) to cover potential claims from customers who were wrongfully sold insurance products. It also disclosed that U.S. authorities extended for one more year an agreement that essentially puts the bank on probation while the government looks into allegations that the bank rigged foreign-exchange markets.
Buyout Shops Look to Rivals for Deals (WSJ)
Private-equity firms have all but stopped buying public companies, retreating from a cornerstone of their business as rising stock prices push acquisition targets out of reach. Public companies taken private accounted for 3.5% of the $89 billion of U.S. leveraged buyouts in the first half of this year, the lowest share on record, according to data tracker S&P Capital IQ LCD. In the first half of 2008, at the apex of a buyout boom, these types of deals represented about 68% of all buyouts by dollar volume. Instead, private-equity firms are buying companies from one another, a shift driven in part by the relative simplicity of completing an acquisition of a private company compared with a publicly traded one. Transactions between private-equity firms have made up 60% of U.S. leveraged buyout volume through June, according to S&P. That is a higher percentage than the ratio for any full year tracked by the firm, whose data date to 2002.
Greenspan Says Stocks to See ‘Significant Correction’ (Bloomberg)
“The stock market has recovered so sharply for so long, you have to assume somewhere along the line we will get a significant correction,” Greenspan, 88, said Wednesday in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “Where that is, I do not know.”
Flight Attendant Warns Travelers To Flush Their Drugs Before Landing (AP)
An Australian airline apologized on Wednesday for a warning a flight attendant gave passengers who might have been flying high that there were drug-sniffer dogs awaiting them at Sydney airport. Many of the 210 passengers aboard the Jetstar flight from Gold Coast city on Sunday night had attended the Splendour in the Grass weekend music festival at Byron Bay and were returning home. “We have been told there are sniffer dogs and quarantine officers waiting in the domestic terminal,” Sydney’s The Daily Telegraph newspaper on Wednesday quoted the attendant as telling passengers via the Airbus A320′s public address system. “If you need to dispose of anything you shouldn’t have, we suggest you flush it now,” he added. The newspaper said the warning prompted passengers to rush for the toilets. Jetstar spokesman Stephen Moynihan confirmed the newspaper report was accurate. He said the public response to the announcement had been “mixed.” The airline said it routinely makes quarantine announcements on such flights that cross state borders. “The crew member’s words were poorly chosen and are plainly at odds with the professional standards we’d expect from our team,” Jetstar said in a statement. “We apologize to customers offended by the comments.” Read more »