Opening Bell: 12.08.08

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Merrill Hesitant At Thain's Request For $10MM Bonus (Reuters)
Merrill's board is pushing back because of the climate and the fact that Thain sold the company to a retail bank (though the latter isn't explicitly or even implicitly listed). I'll give it to Thain though: it takes a sack to push for the money given all of the variables. My 2 cents: the $10MM should go to therapy for the poor Merrill souls who now have to hear the words "Spirit" and "Points."
Goldman Considers Options, Branding (FT)
"Even Mr Hintz, who predicts a change in Goldman's model, understands that the brand remains sacrosanct and so he doubts the firm will acquire a conventional bank. "If you acquire a bank, you've got Community Reinvestment Act requirements," he says, referring to US banking rules that require banks to lend in all segments of their communities. "It's hard for me to believe that Goldman executives are going to be out calling on Korean bodegas.""
Deutsche Borse, NYSE: No Deal (WSJ)
Deutsche Borse and NYSE Euronext have been kicking around the idea of a merger for a couple of months now, but there hasn't been much movement on it. The European exchange is valued at $12.67B, while the Euronext is valued at $5.67B - I see a high degree of cooperation going forward, but not a merger.
PE Firm May Have To Shore Up EMI (WSJ)
Terra Firma purchased the music giant last year just before the credit crunch for around GBP 2.4B in 2007, while the company owes Citi $4B in loans - GBP $10MM is required to keep the company from going into default.
"In a sign that the market increasingly thinks EMI could default on its loans, the price of insuring against a default by EMI is rising. It currently costs GBP 931,000 to insure GBP 10 million of EMI debt, up from GBP 868,000 a month ago, according to data provider Markit.
That said, EMI's internal forecasts are that it will generate enough cash. EMI expects to generate GBP 280 million in earnings before interest, tax, depreciation and amortization in the fiscal year ending March 30, a person familiar with the matter said. If it meets this target, Terra Firma will likely avoid having to inject more cash into the business, the person said."
Moody's Default Estimates (DJNewsPlus)
"... the default rate on junk-rated companies rising to 3.1% in November from a revised 2.9% in October. Last month's figure is more than triple the prior year's 0.9%. Measured by dollar volume, the default rate rose to 2.5% in November from 2.4% in October and 0.6% a year earlier.
... U.S. and European junk-rated issuers, hitting 4.6% in the U.S. by year-end -- below last month's forecast of 4.9% -- and reaching 11% a year from now. European rates are expected to rise to 2.6% this month and soar to 13% a year from now...
Moody's speculative-grade corporate distress index ... grew to 51.8% in November from 48.5% in October and 8% a year earlier. November's level was again the highest since Moody's launched the index in 1996."

--William Richards

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