Tag Archives: Newspaper

Anglo Irish Downgraded – No Surprise

The rating action was another blow for the beleaguered bank. But its spreads were little moved as the market had already priced in the downgrade. In fact, Anglo Irish senior CDS trades with an implied rating of B, according to Markit Implied Ratings.

“A report in a Sunday newspaper suggested that some of Anglo Irish’s debt will be tendered at a discount to par or swapped for equity in the ARB.”

Gavan Nolan


Spreads were lacking direction in a relatively uneventful day, Monday. “Perhaps the most notable occurrence of the day was Moody’s downgrade of Anglo Irish Bank,” vice president Gavan Nolan at Markit Credit Research writes in his daily market alert.

The agency cuts its rating on Anglo Irish’s senior debt by three notches to Baa3, citing the likelihood of further asset quality deterioration and the lack of an explicit government guarantee.

Moody’s warned that if the latter issue isn’t rectified then additional downgrades into sub-investment grade are possible.

But it was the agency’s action on the subordinated debt that was more significant, Nolan points out.

Moody’s cut its rating on the bonds by six notches to Caa1 from Ba1, citing the increasing risk that subordinated bondholders will be forced to share some of the burden of the bailout.

Specifically, the agency highlighted three factors that have led to the risk rising:

(i) the need for further capital injections as the non-NAMA loan book deteriorates;

(ii) the thin capitalization of the Asset Recovery Bank (ARB), which is likely to be wound down; and

(iii) the longer maturities of the subordinated debt in comparison to the senior debt.

The rating action was another blow for the beleaguered bank. But its spreads were little moved as the market had already priced in the downgrade.

In fact, Anglo Irish senior CDS trades with an implied rating of B, according to Markit Implied Ratings.

“It should be noted that it is not the most liquid of credits, having a Markit Liquidity Score of between 2 and 3 in the past few months. The government is expected to provide clarification this week on its plans for Anglo Irish and the overall cost of the bailout. A report in a Sunday newspaper suggested that some of Anglo Irish’s debt will be tendered at a discount to par or swapped for equity in the ARB,” Gavan Nolan points out.

  • Markit iTraxx Europe 113.25bp (+0.5), Markit iTraxx Crossover 516bp (-0.5)
  • Markit iTraxx SovX Western Europe 157.5bp (+2.5)
  • Markit iTraxx Senior Financials 144bp (+1.5)
  • Sovereigns – Greece 785bp (-10), Spain 226bp (+3), Portugal 405bp (+12), Italy 195bp (+5), Ireland 470bp (+8), Belgium 137bp (-3)
  • BP 187bp (-2)
  • AIB  – Snr 625bp (+5), Sub 1000bp (+28), Bank of Ireland – Snr 520bp (+11), Sub 815bp (+19), Anglo Irish Bank – Snr 985bp (+25), Sub 47 points upfront

Something wrong with this picture?

CDS curve for Southwest Airline.

* Southwest Airlines (LUV) will buy Airtran in a $1.4 billion cash and stock deal in a consolidation of low cost air carriers.

* CDS curve today is seeing a roughly 5 bps parallel shift in response to the transaction in early trading.

* Stocks on both LUV and Airtran were higher. Stocks on other air carriers (JetBlue, US Airways and Delta) were higher as well on merger speculation.

Markit Research & News

Related by The Swapper:

Irish Sovereign CDS Spread Exceeds 500 Basis Points

Ireland And Portugal Close To Collapse

Irish CDS Spreads Back To Record High After Bond Sale

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Le Monde File Lawsuit Against President Sarkozy For Spying

Le Monde has filed a lawsuit against President Nicolas Sarkozy‘s office for using the country’s counter-intelligence services to track the French newspaper’s sources. Sarkozy’s office is being accused of having hunted down the source who talked to the paper about alleged illegal party funding by the country’s richest woman, L’Oreal heiress Liliane Bettencourt.

“The presidency emphasizes the fact that it has never given the slightest order to any service whatsoever.”

The Elysee

Je ne sais rien ...

In a front-page editorial published on Monday, the newspaper say they are suing the president’s administration for violation of the secrecy of sources, accusing Sarkozy of having ordered the national intelligence service to track down the source who talked to Le Monde about alleged illegal party funding by the country’s richest woman, L’Oreal heiress  Liliane Bettencourt.


Police sources are telling Le Monde that counter-espionage officers have looked at the telephone records of a justice ministry official to find out if he have spoken to reporters.

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The official has now been removed from his duties, accused of having released restricted information and sent on a minor legal mission in the French Guyana.

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France’s national police chief, Frederic Pechenard, reject the claims saying that the probe was legal and that the evidence was collected through a “legitimate investigation of the origin of leaks.”

Mr. Pechenard confirms that domestic intelligence services have been involved, as their mission is to “protect the security of institutions.”

However, Le Monde claims the spying is illegal because it violates a law protecting journalists’ sources – a law proposed by Mr. Sarkozy and enacted in January this year.

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Meanwhile, Mr. Sarkozy’s cabinet firmly rejected any connection to the case.

“The presidency emphasizes the fact that it has never given the slightest order to any service whatsoever,” the Elysee says in a statement.

Le Monde quotes intelligence sources who says Mr. Sarkozy was furious at the leak published mid-July and ordered an investigation by the Direction Centrale du Renseignement Interieur (DCRI).

DCRI is a umbrella division of the internal security organization, created two years ago in an attempt to de-politicize  the country’s security services.

Liliane Bettencourt

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The leak exposed labor minister Eric Woerth lobbying Ms. Bettencourt’s wealth manager for a job for his wife.

Five months later, the wealth manager was awarded the Legion d’honneur, a top French honor.

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This investigation is still ongoing and now looking into Mr.  Woerth’s alleged conflicts of interest, among other accusations is tax evasion and illegal party funding.

The scandal has dented Mr Woerth’s credibility as he prepared to present a key pension reform to parliament.

A fresh set of nationwide union strikes are due on 23 September against the reforms, while Mr Sarkozy’s popularity – close to a record low – has only slightly improved following his clampdown on Roman camps.

Leaked documents published last week by Le Monde describes in detail how the Romans should be targeted “with priority.”

Le Monde has been on a collision course with the center-right government of Mr. Sarkozy ever since the traditional newspaper was taken over this summer by a trio of left-leaning millionaires, the EUobserver writes.

"This is to balance the newspapers, Mr. Minister .. or for your personal use?"

Related by the Econotwist:

Media Freedom Threatened In Most European Countries

EU Hunts For Journalist’s Sources

European criminals and politicians taking “libel tourism” trips to UK

Estonia Put Pressure On Journalists

Estonian Newspapers Protesting With Blank Front Page

Warns Against Euro Zone “Elite”

EU Lobbyists Complains Over Unfair Treatment

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Filed under International Econnomic Politics, National Economic Politics

Banks Protesters Storm Irish Parliament

Protesters stormed Ireland‘s parliament last night during a march against government plans to inject billions of euros into the country‘s banks, the Belfast Telegraph reports.

Dozens of people broke away from the march and ran at the gates of the parliament’s main building, Leinster House, the newspaper writes.

They wrestled with police, who tried to force them back and secure the gate.

At least one man suffered a head injury during the scuffles with organizers appealing for calm.

Officers stopped the protesters from breaching the gate.

Gardai said no arrests were made and the scuffle was brought under control within minutes.

One man was seen walking away with blood dripping from the back of his head, according to belfasttelegraph.co.uk

This video is just uploaded on YouTube, apparently made by one of the protesters:

It is not the first protest i Ireland over the economic problems – here’s a BBC report from February last year:

Related by the Econotwist:

Gerald Celente: “The Great Crash Has Occurred”

Athens: Banks On Fire – Thee Dead

“The Economics Of War Unfolding Now”

Greek Protesters Start Blowing Up Banks

Athens Burning: Police And Protesters In Violent Clash

“We Stand At The Brink Of The Next Great Crisis”

Wave Of Protests To Hit Troubled E.U. States

U.S Pilot Crash Plane Into IRS Building

Germany In Favour Of Creating European Army

Norway’s Prime Minister Fears Social Unrest

Update: 1920-similarities

2010 Analysis: Warns Against Social Unrest

2010 Analysis: The Road to Disaster

Top 10 Risks of 2010

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Filed under International Econnomic Politics, National Economic Politics