>>> Deutsche Bank looking to sell $1 billion of shipping debt - source

XCLUSIVE-Deutsche Bank looking to sell $1 billion of shipping debt - sources - Reuters News

06-JUL-2016 14:29:30
By Jonathan Saul, Arno Schuetze and Andreas Kröner

LONDON/FRANKFURT, July 6 (Reuters) - Deutsche Bank DBKGn.DE is looking to sell at least $1 billion of shipping loans to lighten its exposure to the sector whose lenders face closer scrutiny from the European Central Bank, sources told Reuters.

While the oil tanker trade has picked up, the container and dry bulk shipping industries are struggling with their worst downturn due to a glut of ships, a faltering global economy and weaker consumer demand.

Banking and finance sources familiar with the matter said Germany's biggest lender was initially looking to offload at least $1 billion.

"They are looking to lighten their portfolio and this includes toxic debt. It makes commercial sense to try and sell off some of their book," one finance source said. "They are not looking to exit shipping."

Deutsche Bank, which has around $5 billion to $6 billion worth of total exposure to the shipping sector, declined to comment.

>>> Eurostoxx review csgn dbk OUT dg ibe IN ?



Via SocGen:

 

The next STOXX blue-chip annual review is Sep 2016, while June's quarterly process had no fast adds/deletes. Any annual changes should be announced and based on end of Aug prices and take effect at close 16 Sep. Based on end of Jun prices, there could be two annual replacements in both Euro STOXX 50 (SX5E) and STOXX Europe 50 (SX5P). In SX5E, adidas (ADS GY, 34th) and CRH (CRH ID, 41st) could replace UniCredit (UCG IM, 62nd) and Carrefour (CA FP, 61st). Continental (CON GY, 47th) is the next closest add candidate but 24% from annual entry level, while Assicurazioni Generali (G IM,55) is the next closest delete, -15% away. Ahold (AH NA, 53rd) could be added instead of CRH if it completes its friendly stock offer for Delhaize (DELB BB) as it could become an auto add candidate, ranked 34th. In SX5P, there could be two annual changes in Sep as Deutsche Bank (DBK GY, 86th from 74th) and Credit Suisse (CSGN VX, 85th from 68th) could deleted, while Vinci (DG FP, 41st) and Iberdrola (IBE SM, 42nd) could replace them. CSGN/DBK could be fast deletes if they rank below 74 at end of Jul, as they did in Jun, and could come out in early Aug. CSGN/DBK are currently 12%/17% below fast exit levels, so DG and IBE could be balancing add candidates, but in any case are 1 and 4% from annual entry levels. ASML Intl.(ASML NA, 46th) is the next closest add candidate, 9% from annual add levels but nearer is next closest delete candidate Intesa SanPaolo (ISP IM, 59th), -1% from exit levels. In Sep 2015's annual reviews RWE (RWE GY) and Repsol (REP SM) were replaced by Fresenius SE & Co.(FRE GY, 39th) and Safran (SAF FP, 41st) in SX5E. In SX5P, Intesa Sanpaolo (ISP IM, 37th) and Imperial Tobacco (IMT LN, 40th) replaced Glencore (GLEN LN, 76th) and BHP Billiton (BLT LN, 55th). In 2013, STOXX changed the fast entry rules for blue-chip indices, making any fast adds much less likely as any non-constituents would now need to be in the top 25, not top 40, at the end of Feb, May or Nov to join in the following month's review. Annual reviews in September, allow entry if in top 40 or exit if below 60. Fast exit stays the same at below 74 for two months, so these rules are now more equally balanced. STOXX now also update floats from what is used in the broader index to build blue chip selection lists. These lists comprise broad constituents which make up closest to the top ~60% of each STOXX TMI (total market index) sector free float cap and/or current constituents. The largest non-constituent can join if a current constituent has to be deleted due to takeover or delisting. Ranks shown below are based on free float cap, while moves needed are for fast entry/ exit levels.

FT : Property funds better placed to weather storm than in 2007

Property funds better placed to weather storm than in 2007
‘This is not a Lehman Brothers moment,’ says one fund manager

When three funds holding £9bn of investors’ money halted trading this week, it brought back memories of the credit crunch of 2007, when a run on property funds was an early sign of the financial crisis.
In 2007, a series of funds suspended redemptions in an apparent domino effect; in 2016, Standard Life’s “gating” was swiftly followed by that of Aviva’s £1.8bn UK Property Trust and M&G’s £4.4bn Property Portfolio.
But fund managers and others in the industry say much has changed since a race to the bottom in commercial property values helped to cripple banks and plunge the world into financial distress.
“This is not a Lehman Brothers moment,” said one fund manager in the sector.
UK banks already have much more capital than they did in 2008. That has given the Bank of England the freedom to relax its requirements in order to allow banks to continue lending — unlike in 2008, when credit was abruptly removed from the market.
Property companies, meanwhile, are far less indebted than they were ahead of the previous crisis, reducing the stress likely to result from them being unable to pay their debts.
“In the listed sector, levels of leverage then were about 45 per cent — today they are in the mid-20s to 30 per cent,” said Robert Duncan, analyst at Numis Securities.
The UK funds — some of the largest in the property sector — had little choice but to effectively trap investors’ money this week, after they were faced with withdrawal requests that ate into their liquid holdings. As open-ended funds, they are normally structured to return investors’ money on demand.
Investors fear that forced property sales by funds could act as a catalyst for steep drops in real estate values, as they did in the credit crunch, when UK commercial property prices shed 36 per cent.

“It might not be a re-run of 2008, with banks better capitalised to the tune of £150bn, but 2016 is shaping up to be a re-run of 2007,” said Mike Prew, analyst at Jefferies.
Mr Prew said he believed that the contagion could spread to real estate investment trusts, which experienced a fresh sell-off on Tuesday.
Meanwhile, open-ended property funds now own about 5 per cent of the UK commercial property market, compared with 2 per cent in 2007, after investors piled into the funds in search of yield and what for three years has been strong capital growth.
This increase in size could potentially heighten the funds’ impact on the wider market; in the past, inflows and outflows from such funds have closely foreshadowed changes in capital values for real estate.
The Bank of England, which held talks with property funds before the Brexit vote, on Tuesday highlighted commercial real estate as a risk to financial stability. “The behaviour of open-ended funds investing in the UK commercial real estate market could amplify any market adjustment,” the BoE said.
Many property funds — although not Aviva’s — had already written down the value of their assets by 5 per cent after the UK’s vote to leave the EU, anticipating a knock to commercial property values as businesses put on hold their expansion plans.
But analysts expect a bigger drop: those at Liberum are pricing in a 10 per cent fall, while real estate investment trusts are trading at an average discount of 32 per cent to the net value of their assets, according to Jefferies.
Investors have especially sold off stocks with exposure to London offices, which are expected to suffer from financial services companies relocating staff elsewhere in Europe.
However there are some factors that should ease the slowdown.
James Beckham, head of central London investment at Cushman & Wakefield, the property advisers, said the shock to demand would be mitigated by low vacancy rates — occupancy in central London is higher than during any of the past three market shocks.
“The central London market has become more globalised in terms of buyers, we’ve had a re-rating of sterling which we didn’t have previously, and you’ve got historically low interest rates which may go down as well as up,” he said.
Gating the funds will prevent the need for fire sales, but the funds will still need to dispose of properties relatively quickly to enable investors to reclaim their money, and this could set new benchmarks for pricing in the market.
Few commercial property transactions have taken place since the EU vote, while ongoing deals worth at least £650m fell through after the result.
There are fears that more funds may halt trading, said Mr Prew, although one large fund — L&G UK Property — said it had no plans to do so and maintained 20 per cent in liquid holdings.
Most funds are now carrying out weekly valuations to ensure they keep pace with the market, where any property deals that do proceed will be watched closely for signs of the new post-Brexit pricing and of buyer appetite after the vote.
“There is still the possibility of a devaluation spiral,” one fund manager said.

>>> Swisscom in ITaly : Iliad Cooperation


Zurich (AWP) - New scenario for the Italian telecommunications market: Swisscom subsidiary Fastweb and the French Iliad Group could cooperate in the southern European country in the mobile sector. According to analysts of Deutsche Bank, this would be a win-win situation.

Background is the planned merger of the two mobile brands "Wind" and "3 Italia", which are Vimpelcom and Hutchison Holdings owned by the two companies. In recent weeks Iliad and Fastweb had been mentioned in various media reports as potential buyers of mobile assets of the seller, provided that such a sale would need to antitrust requirements. Specifically this involves frequencies and antennas.

On Tuesday evening, the Iliad Group had announced he was ready to enter the market in Italy. The day before the speech was in media reports of "exclusive negotiations" between Iliad and Vimpelcom / Hutchison Holdings have been.

From Swisscom had recently commanded that Fastweb for all options would be open, as the market is located in upheaval. Swisscom CEO Urs Schaeppi had declared in the last week compared to the "Finanz und Wirtschaft" that he met for the proposed merger of "Wind" and "3 Italia" look up. However, it is too early for a decision. Today Fastweb is focused in Italy on broadband services.

SWISSCOM NOSE FRONT

The Deutsche Bank experts see Swisscom "with a probability of 55%" can be seen still as a possible buyer of mobile assets, such as a study on Tuesday as favorites. The subsidiary Fastweb dispose about a brand in Italy as well as shops and employees while Iliad takes all start from scratch, it is stated as one justification.

However, the analyst could abgewinnen also a solution much, would be involved in the Swisscom / Fastweb and Iliad. For such would, according to the study benefits for both sides.

So Iliad would apply in a joining of forces to benefit from one of the best broadband deals in the Italian market, which could be combined with the mobile. Moreover remained free agents that could be used for any changes in the market in France.

ADVANTAGE ON THE HOME MARKET

Swisscom on the other side would get for Cooperation in Italy no new dangerous competitor in the broadband area. Because according to the German bank analysts Iliad would probably buy after winning mobile activities and broadband services - creating a new competitor would arise.

Close ties to Iliad could, according to experts on the domestic market will be useful: For Iliad is known owner of the Swiss mobile operator Salt and could thus probably somewhat bite impediment. An advantage would be a deal with Iliad in Italy also because in this way the funding without IPO Fastweb is possible and the amount of dividend is safer than in a sole procedure.

Should nevertheless Iliad come to train, it keep the analyst's possible that Swisscom considering a sale of Fastweb.

Located on the Swiss stock exchange, the Swisscom shares (-0.8%) record at 11 am as part of the overall market (SMI: -0.9%).

>>> InterOil: Third party bidder would not be able to strike agreement with Tota

InterOil: Third party bidder would not be able to strike agreement with Total - source

Total SA [EPA: FP] does not have the right to negotiate with rival bidders in respect of a transaction involving InterOil [NYSE: IOC; POMSoX: IOC], as per its arrangement with Oil Search [ASX: OSH], said a source familiar with the situation.

As part of Australia-based Oil Search’s agreed bid to acquire 100% of Papua New Guinea-focused InterOil, it also signed an MOU with Total. Under the MOU, Oil Search will sell to Total 60% of InterOil’s interests in the PRL 15 LNG project and 62% of its exploration assets.

The MOU effectively rules out Total as a rival bidder for InterOil and precludes it from striking a similar deal with another party.

The latter could be key, since Total already owns 40.1% of the PRL 15 project and would be in a position to make a rival bid of its own for InterOil’s assets.

The MoU is conditional on Oil Search and InterOil closing their deal, which is now subject to a possible bid from an unnamed third-party.

Last week, InterOil told the market that it had received an unsolicited, conditional, non-binding proposal that was subject to conditions including due diligence. InterOil continues to unanimously recommend the Oil Search transaction, but said it is negotiating with the third party, which this news service, among others, has reported likely points to Exxon Mobil [NYSE: XOM].

A person briefed on the situation said these discussions are being vigorously pursued, and described the bid and bidder as serious. Due diligence has yet to be completed.

This news service has reported that the third party is said to have been among the three parties that provided indicative proposals to InterOil before it agreed to Oil Search’s bid. As part of that process, the third party did enter into confidentiality agreements.

According to an information circular issued by InterOil, the company’s virtual data rooms were continuously updated as new information became available.

On 20 May, Oil Search and InterOil announced an agreed deal where InterOil shareholders will receive 8.05 Oil Search shares for every InterOil share, or a cash alternative of up to USD 770m, subject to a pro-rata scale-back. The consideration includes a Contingent Value Right (CVR), which entitles holders to a contingent cash payment that is linked to the volume of 2C hydrocarbon gas resource certified to be contained in the Elk-Antelope fields. Both InterOil and Oil Search are already partners in these fields.

The source said the CVR has been positively received by shareholders as it allows InterOil shareholders an opportunity to benefit from any upside in the size of InterOil’s gas resource. He believed the CVR component does not disadvantage Oil Search against an all-cash bid.

A Special Meeting of InterOil shareholders to consider the Oil Search transaction is scheduled for 28 July. There are no remaining conditions, the source confirmed.

Oil Search is understood to accept that the Papua New Guinea (PNG) government would be commercial in any decision it makes with the objective of maximising wealth from the InterOil assets.

This news service has reported that InterOil does not consider the third party to be at a disadvantage with regard to the PNG government’s potential response, despite Oil Search’s long-standing and close PNG connections. All of InterOil’s operations are in Papua New Guinea.

InterOil, Oil Search and Total declined comment.