October 222006

 

Mortgage
Lending

name='1'>Anti-Predatory Lending

Legislation to Be Considered at House Committee
Hearing

House Financial Services
Committee Chairman

Barney Frank (D-Mass.) is expected to unveil his bill before a committee
hearing on

Wednesday to examine anti-predatory lending legislation in response to
the meltdown in the

subprime mortgage market,

size='3'>CongressDaily reported today. A
markup hearing on

Frank’s measure will likely be held the following week. Witnesses
have not been

announced.

name='2'>Mortgage Security

Bondholders Facing a Cutoff of Interest Payments

Collateralized debt
obligations are starting

to shut off cash payments to investors in lower-rated bonds as
credit-rating agencies

downgrade the securities they own, the New

York Times reported today. 
size='3'>Cutting off

the cash flow, which is governed by rules and mathematical formulas that
vary by security,

is expected to accelerate in the months ahead. With such a
re-evaluation, owners of

collateralized debt obligations — investment banks, hedge funds,
insurance companies

and public pension funds — may be forced to write down mortgage
investments beyond the

billions they have already written off. 

href='http://www.nytimes.com/2007/10/22/business/22market.html?ref=business'>Read

more.

name='3'>Banks Pull

Objections to AHM Unit
w:st='on'>

w:st='on'>Sale

American Home Mortgage
Investment Corp. said

Friday that it has struck deals with several investment banks that had
earlier objected to

the sale of its loan-servicing arm to billionaire Wilbur Ross' private
equity firm,

Bankruptcy Law360 reported on Friday. The bankrupt mortgage
lender's attorneys said

in

size='3'>Delaware
size='3'>bankruptcy court on Friday

that JP Morgan Chase & Co., Citibank, Bank of New York Mellon Corp.,
Bear Stearns Cos.

Inc., Countrywide Financial Corp. and Goldman Sachs Group Inc. are
withdrawing the

objections they filed earlier this month. In late September, Ross' firm,
W.L. Ross &

Co., was named lead bidder for the court-approved auction of the
servicing unit with a $435

million purchase offer. 

href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=38036'>Read

more. (Registration required.)

name='4'>Banks Guard Against

Losses Beyond Mortgage Loans

Poor quarterly results
from banks across the

United States over the past two weeks suggest that credit problems once
confined to

high-risk mortgage borrowers are spreading across the consumer
landscape, posing new risks

to the economy and weighing heavily on the markets, the
face='Times New






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size='3'>Financial

Times reported yesterday. Banks have raised
reserves for loan

losses by at least $6 billion over the second quarter and by even larger
amounts from last

year, indicating that  financial executives believe consumers will
be increasingly

unable to make payments on a variety of loans. Banks are adding to
reserves not just for

defaults on mortgages, but also on home equity loans, car loans and
credit cards. 

href='http://www.ft.com/cms/s/0/7c453090-7ff7-11dc-b075-0000779fd2ac.html?nclick_check=1'>Re

ad more.

w:st='on'>

face='Times New Roman' size='3'>
name='5'>Calpine

size='3'>,

size='3'>U.S.
face='Times New Roman'

size='3'> Trustee Resolve Conflict-of-Interest
Dispute

U.S. Trustee
Diana G. Adams dropped her
objections to Calpine

Corp.'s retention of an adviser whose officer allegedly also served as a
Calpine officer for

roughly a month,
size='3'>Bankruptcy

Law360 reported on Friday.
w:st='on'>

face='Times New Roman' size='3'>Adams
size='3'>previously had

expressed concern with Calpine's hiring of a PA Consultants’
officer as its interim

executive vice president, commercial operations. On Aug. 24, according
to

w:st='on'>Adams,
Calpine officer Todd

Filsinger accepted that role. Filsinger resigned on Sept. 20, the same
day

w:st='on'>

size='3'>Adams filed her motion,
according to the filing.

Adams dropped her objections after PA Consultants agreed to waive the
roughly $90,000 in

fees Filsinger earned in his capacity as the head of PA's global energy
group, as well as

one half of the additional $485,000 PA earned for its services to
Calpine, during the time

Filsinger was nominally employed by Calpine, according to Adams. 

href='http://bankruptcy.law360.com/Secure/ViewArticle.aspx?id=38024'>Read

more. (Registration required.)

Autos

name='6'>Dana Requests

Additional $40 Million Backstop Agreement

Auto parts maker Dana
Corp. asked a court to

allow the company to obtain a backstop commitment for the purchase of an
additional $40

million in Series B preferred stock,

size='3'>Bankruptcy Law360 reported on Friday.
Dana requested

approval of a plan that would allow the company to ask primary investor
Centerbridge Capital

Partners LP for a backstop commitment for the purchase of $40 million in
stock. The company

also asked the court for permission to obtain a backstop commitment for
the purchase of $250

million in Series B stock that is not backstopped by Centerbridge. In
exchange for the

backstop agreement, Dana will pay Centerbridge an $11.6 million
commitment fee and release

the firm from a previous commitment to purchase a certain percentage of
the Series B

shares. 
href='http://bankruptcy.law360.com/secure/ViewArticle.aspx?Id=38004'>Read

more. (Registration required.)

face='Times New Roman'

size='3'>
name='7'>Delphi

size='3'> Bankruptcy Exit May Be Delayed to Early
2008

Auto parts maker Delphi
Corp. said Friday

that its anticipated exit from bankruptcy by the end of 2007 might be
extended to the first

quarter of 2008, Reuters reported on Friday. Delphi, the largest

w:st='on'>

size='3'>U.S.
size='3'>auto-parts maker, had

not been able to secure the $7.1 billion in debt financing it needs to
pay creditors,

including its former parent company, General Motors Corp. In a bid to
give more time

to

size='3'>Delphi to negotiate its
reorganization plan with

key stakeholders, the bankruptcy court delayed a hearing on the plan
originally scheduled

for Thursday to Nov. 8. 

href='http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20071019%5cACQRTT200710192212RT

TRADERUSEQUITY_1073.htm&'>Read more.

w:st='on'>

face='Times New Roman' size='3'>

name='8'>Pittsburgh
face='Times New Roman'

size='3'> Penguins to Pay $21 Million Bankruptcy Settlement with

Lemieux

Mario Lemieux, who was
owed $32 million by

the Pittsburgh Penguins in deferred compensation on the contract in
effect when he retired

as a player in 1997, will receive $21 million in the wake of a periodic
refinancing of the

team's debt, the
size='3'>Pittsburgh Post-

Gazette reported on Friday. Lemieux will not
get any additional

money on that contract in the future and is believed to be the only
unsecured creditor from

the bankruptcy to receive less than 100 percent of money owed.
California businessman Ron

Burkle, who shares control of the franchise with Lemieux, and the other
investors who

purchased a piece of it when it came out of bankruptcy in 1999 will be
given varying

percentages of their original outlay in conjunction with the
refinancing. 

href='http://www.post-gazette.com/pg/07292/826708-61.stm#'>Read
more.

Bear
Stearns and Citic

Form Joint Venture

Citic Securities, a top
state-controlled

investment bank in
face='Times New Roman'

size='3'>China, is planning
to invest $1 billion

in Bear Stearns and form a joint venture with the firm in

face='Times New Roman' size='3'>Asia,
the

face='Times New Roman' size='3'>New York Times
size='3'>reported today. The

deal, which also calls for Bear Stearns to invest $1 billion in Citic,
which is owned by an

arm of the Chinese government, would pool together both firms’
businesses in Asia,

with the exception of
w:st='on'>

face='Times New Roman'
size='3'>China

size='3'>. The venture would include some collaboration in

w:st='on'>

size='3'>China,
giving Bear Stearns

access to some of Citic’s clients.

size='3'>Citic plans to invest in Bear Stearns through 40-year
convertible trust preferred

securities that will convert to about 6 percent of Bear Stearns’
outstanding shares.

Citic could potentially increase the stake to 9.9 percent. 

href='http://www.nytimes.com/2007/10/22/business/worldbusiness/22cnd-bear.html?ref=business&

amp;pagewanted=print'>Read more.

International

name='10'>French Government

Continues to Discuss Pension Reforms

French Labor minister Xavier
Bertrand said that he

will meet with unions and state-owned corporations this week to discuss
the proposed reforms

to certain public-sector pension schemes that sparked strike action last
week, AFXNews.com

reported today. The government wants to end by 2012 an arrangement that
allows workers in

certain state sectors to draw a full pension after 37.5 years of
contributions, bringing

them into line with the 40 years required elsewhere in the public
sector. The government

said that while it is willing to negotiate the details of the reforms,
it will not give way

over the extension of contributions to 40 years. 

href='http://www.forbes.com/markets/feeds/afx/2007/10/21/afx4243009.html'>Read

more.

href='http://www.forbes.com/markets/feeds/afx/2007/10/21/afx4243009.html'>