>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: N/A.

M&A news: AEGR +41.4% (Aegerion Pharma and QLT Inc (QLTI) agree to merge), QLTI +27.3%, ALLT +3.2% (Radware and Allot Comms held preliminary talks to merge, but discussions never reached an 'official stage', according to Haaretz), PRGO +1.7% (vague takeover speculation)

Select financial related names showing strength: CS +2.3%, DB +2.2%, BCS +2.2%, SAN +1.5%

Select metals/mining stocks trading higher: FCX +2.7%, RIO +2.2%, BHP +1.4%, MT +1.4%, AA +1.4%, BBL+1.3%

Other news: CBYL +18.4% (Carbylan Therapeutics and KalVista Pharma enter definitive share purchase agreement pursuant to which KalVista will become the majority owners of co), EPRS +14.6% (enters into agreement with Zaklady Farmaceutyczne 'Polpharma' S.A.), AKAO +11.7% (cont strength), CANF +8.6% (announces new mechanism of action data indicating Piclidenoson inhibits two inflammatory cytokines), REXX +6% (announces sale of Illinois Basin asset; expects to receive proceeds at closing of ~$40 mln), KMDA +4.9% (Kamada and Shire (SHPG) announce FDA approval on an expanded label for GLASSIA for the treatment of Emphysema due to severe AAT deficiency), MTL +4.3% (appoints Sergey Rezontov as CFO), GLPG +3.1% (provides R&D and pipeline update for FY16), SHPG +1.4% (Kamada (KMDA) and Shire announce FDA approval on an expanded label for GLASSIA for the treatment of Emphysema due to severe AAT deficiency), CELG +1.3% (adds $3 bln to repurchase program), TWTR +0.9% (Twitter invests ~$70 mln into music service SoundCloud, according to Re/Code), VRX +0.9% (appointed Thomas Ross Sr as its lead independent director; confirms new independent directors were elected at Annual Meeting of Shareholders)

Analyst comments: EXAS +12.8% (Mizhuo says possible catalyst may have been an updated USPSTF web page for the group's colon cancer screening recommendations.), X +2.2% (upgraded to Neutral from Underperform at BofA/Merrill)

FT : Chinese borrowers told to post nude photos as collateral

Chinese loan sharks are demanding nude photos as collateral from female borrowers which can be used for blackmail if they fall behind on their repayments.
The aggressive tactics are an example of the drastic debt recovery measures that are being employed in the slowing Chinese economy.

The democratisation of finance via peer-to-peer lenders and the vast shadow banking system, with interest rates sometimes topping 30 per cent, have proved an inflammatory mix and fuelled a surge in souring loans.
Female college students in the southern province of Guangdong were told to hand over naked photos of themselves holding their ID cards, with lenders threatening to make them public if they failed to repay their microloans, according to the Nandu Daily, the local newspaper.
While these loans were brokered on Jiedaibao, the P2P online lending platform denied direct involvement as the two parties subsequently agreed terms over another channel. “This is an illegal offline trade between victims and lenders who did it by making use of the platform,” a representative said when contacted by the Financial Times.
Blackmailing with nude photos joins a long list of threats including property destruction and bodily injury committed by loan sharks attempting to collect unpaid loans.
“If they borrow from banks there is no threat to personal safety. But if they borrowed from private lenders, especially high-interest lenders, it can happen,” said bankruptcy lawyer Han Chuanhua of the Zhongzi Law Offices in Beijing.
“If they can’t repay sometimes the high-interest lender sends people to their homes. Mostly they threaten, but sometimes they take action. These types of people don’t go through legal channels.”
One of Mr Han’s clients once had his legs broken by thugs reporting to private lenders. Others have had people come to their offices to “bash things up”.
Shadow banking funds flow from lending rings formed by local entrepreneurs or individuals who attract and pool capital for lending to those shut out of the conventional banking system. Online P2P lending sites have allowed the broader public to become both borrowers and lenders.
Loans carrying interest rates greater than four times official rates are considered “loan shark” lending in China and the creditors’ rights are not protected under Chinese law, according to Wen Daoquan, a lawyer writing in an online post on disputes involving high-interest loans. Loan sharking itself is not illegal but collectors can’t use “inappropriate means”, he wrote.
Loans charging interest rates greater than four times official rates, considered “loan shark” lending, are not covered under Chinese law, according to Wen Daoquan, a lawyer writing in an online post on disputes involving high-interest loans.
Migrant workers, with their unstable employment and reluctance to involve police, are especially vulnerable. “If they can’t repay they usually harass their families,” said a representative at a popular legal hotline for migrant workers.

WSJ : New Hedge Fund Gets the Michael Milken Touch

New Hedge Fund Gets the Michael Milken Touch

Executives who run the former junk-bond king’s family investment office are beginning to seek outside investors

A newly minted hedge fund has a rare selling point: the Michael Milken stamp of approval.

Executives who have been managing more than $2 billion for Mr. Milken and his family at his family investment office, Silver Rock Financial LLC, have transformed the firm into a hedge fund and are beginning to woo outside investors, according to securities filings and people close to the matter.

The move could turn Silver Rock into a major hedge-fund manager, partly because of Mr. Milken’s enduring reputation on Wall Street as an astute investor, even though he remains banned from the securities business. Mr. Milken, the former junk-bond king who pleaded guilty in 1990 to felony charges for violating federal securities laws, handpicked Silver Rock’s top executive and has spent years working closely with the firm on stock and bond investments.

Mr. Milken won’t help run Silver Rock, nor will he own part of the firm, according to his spokesman. But he will seed Silver Rock with several hundred million dollars of his money, giving Silver Rock a head start and something of a seal of approval as it gets off the ground, the people said.

Silver Rock’s association with Mr. Milken has contributed to at least one large firm’s decision to contact a Silver Rock representative about making an investment, a person with knowledge of the matter said.

Mr. Milken has made early investments in funds launched in the past by former executives at Drexel Burnham Lambert Inc., including Ted Virtue’s MidOcean Partners and Post Advisory Group LLC, founded by Larry Post.

Silver Rock has focused on junk bonds and distressed loans—markets that Mr. Milken dominated three decades ago—along with stocks. But Silver Rock has run into challenges as the market rallied in recent years, according to someone close to the matter, partly due to Mr. Milken’s insistence on a sizable allocation to cash, due to his worries about expensive stock and bond prices. Poorly timed energy investments also weighed on returns.

Silver Rock Chief Investment Officer Carl Meyer will control the new firm. He and his staff of about 10 executives hope to better retain talent and expand the firm as an independent entity, the people said.

Mr. Milken, who will turn 70 on July 4, rose to fame in the 1980s running Drexel’s high-yield bond department, stunning Wall Street in 1987 with compensation topping $550 million. He became a high-profile advocate for junk bonds, or those sold by lower-rated issuers, helping to finance a range of businesses, some of which eventually expanded into giants.

As part of Mr. Milken’s plea, he was fined $200 million and sentenced to 10 years in prison. He was released in 1993 after spending nearly two years incarcerated after his sentence was reduced. Because Mr. Milken isn’t planning to have a role running Silver Rock, the move wouldn’t violate his lifetime ban from the securities business.

“As long as he’s discussing the management of his money and not getting something for managing other people’s money, the SEC can’t bar that,” said John Coffee, a professor at Columbia Law School.

In 1998, after Mr. Milken received payment for advice given to some corporate executives, the Securities and Exchange Commission launched an investigation. He eventually returned the fee without a penalty or admission of wrongdoing. Subsequently, Mr. Milken has steered clear of work that came with a fee.

“Mike has never had any interest in being in the money management business and has no interest in being in that business now or ever,” a spokesman for Mr. Milken said.

Today, Mr. Milken donates hundreds of millions of dollars to medical research, education and other causes. His Milken Institute runs a global conference each spring that attracts several thousand attendees, where Mr. Milken interviews financial leaders, politicians and scientists.

Mr. Milken also has kept close tabs on Silver Rock’s trading. He has shared views on markets with Mr. Meyer and his team, sometimes speaking with them several times a day, the people said. Mr. Milken didn’t dictate moves, but his influence was felt, according to the person close to the matter.

“He’s not a passive client,” said another person. “He’s on the phone saying, ‘What are you buying? What are you selling? Why are you buying that?’ ”

Mr. Milken will continue to have regular conversations with executives about how they invest his money, his spokesman said. Silver Rock declined to comment. The firm was until recently based in the same building as Mr. Milken’s office and foundation in Santa Monica, Calif. But when executives formed an independent entity on March 25, they leased new space in Los Angeles.

Mr. Milken placed the bulk of his assets with Silver Rock about six years ago, the people said.

Silver Rock was hurt by last year’s plunge in oil prices. During the second quarter of last year, the firm doubled its holding in Whiting Petroleum Corp. before selling nearly all its stake in the first quarter of this year, according to filings, after shares of the energy provider fell more than 75%.

Mr. Meyer spent nearly 20 years as an executive at Citigroup Inc., focusing on debt investments. About six years ago, Mr. Meyer resigned as Citigroup’s head of distressed-loan sales and trading to join Silver Rock.

Despite his focus on philanthropy and public policy, Mr. Milken regularly calls senior Wall Street executives to discuss markets and philanthropic endeavors, sometimes surprising them with his intensity and in-depth knowledge of various investments.

“I talk to him every once in a while,” investor Carl Icahn recently said, with a hat tip to his knowledge of markets. “He’s still very smart.”

>>> US Early premarket gappers

Early premarket gappers
Gapping up: EPRS +14.6%, AKAO +14.1%, EXAS +11.8%, CANF +9.7%,MTL +6.1%, REXX +4.7%, LAKE +4.7%, CNHI +2.8%, RIO +2.5%, SAN+2.2%, DB +2.2%, BCS +2.1%, PRGO +1.9%, CS +1.9%, BHP +1.4%, GSK+1.4%, FCX +1.4%, SHPG +1.3%, BBL +1.2%, TWTR +0.8%

Gapping down: BSPM -10.7%, SALT -8.7%, BOBE -6.1%, HCLP -5.3%,TAX -4.7%, CSCO -1.9%, SYRG -1.7%, WFM -1.6%, ONCE -1.1%, AU-1.1%, RDS.A -0.7%

>>> Dynegy - Announces Launch of Tangible Equity Units Offering and Credit Facil

Announces Launch of Tangible Equity Units Offering and Credit Facility Financing Dynegy Inc. is commencing a public offering of 4,000,000 tangible equity units, with each tangible equity unit having a stated amount of $100.00 and comprised of a prepaid stock purchase contract and a senior amortizing note due July 1, 2019, each issued by Dynegy. In addition to the $400 million offering of tangible equity units, Dynegy is commencing the syndication of an incremental $2 billion term loan B facility and a revolving credit facility of $75 million. Dynegy intends to enter into a $50 million letter of credit facility in connection with the transactions described below. Dynegy will use the net proceeds from the tangible equity units offering, together with the borrowings under the companys term loan B and revolving credit facilities, the proceeds of ECPs purchase of $150 million of the companys common stock to occur concurrently with the closing of the acquisition and cash-on-hand, to fund the consideration for the previously announced acquisition of ownership interests in certain North American power generation assets from International Power, S.A., an indirect subsidiary of ENGIE S.A. and to pay related fees and expenses. The underwriters of the tangible equity units offering will have a 13-day over-allotment option to purchase an additional $60 million of tangible equity units.

(Le Monde) EDF refuse d’enclencher la fermeture de Fessenheim

EDF refuse d’enclencher la fermeture de Fessenheim

La plus vieille centrale nucléaire de France, celle de Fessenheim (Haut-Rhin), sera-t-elle fermée, conformément à la promesse de campagne de François Hollande ? EDF y renâcle. Malgré les fortes pressions de l’Etat, l’entreprise publique refuse d’enclencher la procédure juridique qui doit conduire à l’arrêt anticipé des deux réacteurs.
Depuis de long mois, la ministre de l’écologie et de l’énergie Ségolène Royal presse l’électricien de lancer ce processus, en déposant avant la fin du mois de juin une demande d’abrogation de l’autorisation d’exploiter le site. La direction a décidé de ne pas le faire dans l’immédiat, indiquent au Monde des sources concordantes. Les représentants du personnel devraient être informés de la situation lors d’un comité central d’entreprise, prévu jeudi 16 juin.
Pour les dirigeants d’EDF, impossible d’entamer juridiquement la fermeture de Fessenheim sans s’être entendus au préalable avec l’Etat sur l’indemnité que recevra l’entreprise. Or, sur ce terrain, aucun accord n’est en vue. Là où EDF espérait recevoir au moins 2 à 3 milliards d’euros, Mme Royal a proposé, début mai, de verser 80 à 100 millions d’euros seulement. Un montant jugé dérisoire, voire insultant, au siège de l’électricien. Faute de compromis sur le sujet, EDF fait donc de la résistance. Le dépôt formel de la demande de fermeture n’est plus envisagé avant décembre.