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Bank of Ireland today announced that it is to make an Exchange Offer for any and all of the outstanding notes relating to five Lower Tier 2 securities (three Euro securities and one each in Sterling and US Dollars) with a nominal value equivalent to circa €2.9 billion. Those accepting the Exchange Offer will receive new ten year fixed rate Lower Tier 2 securities reflective of current market pricing expectations.
The securities currently trade at significant discounts to their original issue prices. BoI said the transaction is expected to be equity accretive. The final quantum of equity generated will depend on the volume of securities offered through the exchange process.
Germany's Kurzabeit work scheme: The German IAB Institute for Employment Research said today that public subsidies to support part-time working supported 1.2 million jobs last year. The institute said employees' average annual working time had decreased by 3.2% and noted that "this decrease corresponds to roughly 1.2 million jobs saved" as German suffered its worst recession since World War II: Finfacts article, Dec 2009: Kurzarbeit - - Germany's short-time working scheme
Postbank Savings Index: The Postbank Savings Index which was published today shows that 26% of people reduced their debt in 2009 and over 40% of people claimed that they now had no borrowings. Debt levels look set to fall again in early 2010 as just six per cent of people surveyed indicate that they will increase their borrowings in the next three months, with 25% planning to reduce their borrowing levels.
The Postbank Savings Index is a quarterly survey of Irish adults carried out on a national basis by Millward Brown Lansdowne. Speaking at the launch of the latest Quarterly Index, Postbank head of marketing John Donegan said, the reduction in debt levels is consistent with patterns that we’ve seen over the last twelve months. More and more of us are becoming increasingly careful with our finances. “The trends we are seeing at the moment show that people still want to have a secure nest egg, a buffer during times of uncertainty. People are paying down their debt and if they are likely to make big purchases it will be based on savings and credit as opposed to the buy now pay later approach of recent years.”
Savings levels remain high with 76% of adults saving on a monthly basis, a slight drop since the last quarter. On average, people are saving €283 per month, also marginally down from €305 last quarter and €344 in December 2008. Women remain more likely to be savers than men, but men still save substantially larger amounts,. The respective savings levels from men and women are €330 and €240, nearly 40% of a difference.
The UK's Premier League soccer clubs appear to be reining in their spending as the latest transfer window saw a record low in the amount spent on players, according to Deloitte. Stewart Castledine from Soccerex considers whether the sport is feeling the pinch:
Premier League transfer market: Player transfer spending by the English FA's Premier League clubs was around £30m in the January 2010 transfer window, according to analysis by the business advisory firm Deloitte.
Dan Jones, Partner in the Sports Business Group at Deloitte, commented: “The limited player transfer spending in January by Premier League clubs matches our expectations for this window. As managers, club owners and directors become increasingly sceptical of the near term impact a January acquisition can have, it is unsurprising to see a lack of high value activity, with those clubs that are active preferring loan deals. The absence of new club owners and the tightening of club finances and credit availability have helped to accelerate that trend and dampen down the market.”
Commenting on the contrast to the gross player transfer spending of £170 million in the January 2009 transfer window, Jones commented: “Premier League clubs’ record level of transfer spending in January 2009 was particularly fuelled by new owner-team manager combinations, with over 50% of the spending by Manchester City and Tottenham Hotspur. The relatively low level of transfer spending by Premier League clubs in January 2010 is broadly consistent with the situation of top division clubs in France, Germany, Italy and Spain.”
Some of the key findings from the analysis by Deloitte include: Premier League clubs have committed to around £30m in respect of player transfer fees in January 2010 (2009: £170m; 2008: £150m; 2007: £60m; 2006: £70m; 2005: £50m; 2004: £50m; 2003: £35m).
Spending between Premier League clubs accounts for around half of all Premier League clubs’ transfer spending.
Premier League clubs’ net transfer spend was just £10m (2009: £45m), being the net amount that flows to non-English clubs and Football League clubs.
Around 70% of Premier League clubs’ player transactions (in and out) in January 2010 were loan arrangements.
Previously, Premier League clubs’ transfer spending in the January window has typically far exceeded that in other European leagues. In January 2010, spending by Premier League clubs has still significantly exceeded that disclosed for the top division clubs in France, Germany and Spain, whilst Italian Serie A clubs have reportedly spent around £30m on player transfers.
Reflecting on the overall position of Premier League clubs, Alan Switzer, Director in the Sports Business Group at Deloitte said: “The fundamentals underpinning Premier League football clubs – a loyal supporter base, high quality stadium facilities, a strong relationship with broadcasting and attraction to commercial partners, and for the biggest clubs, an enviable global reach - remains strong regardless of the economic climate. The wider economic realities have led to a flattening, but not a reduction, in Premier League clubs’ revenues. When the new international broadcast rights arrangements are concluded this year it will affirm the global popularity of the competition and we expect the clubs’ revenues from this source will be significantly enhanced from 2010/11."
Switzer added: “The fundamental requirements for a sustainable business model remain the same as always; for clubs to appropriately manage their cost base, particularly player wage costs, relative to their largely predictable revenue streams.”
Wilbur Ross, chairman and CEO of WL Ross & Co., discusses the markets and more with the CNBC news team.
US
In New York, the Dow is up 52 points or 0.51% to 10,238.
The S&P 500 has gained 0.56% and the Nasdaq has added 0.14%.
US housing contracts to buy previously second-hand homes rose slightly in December after a record plunge, signalling that an extended tax credit will take time to have an impact:
On the New York Mercantile Exchange, oil for March 2010 delivery is trading at $75.82 up $1.39 from Monday's close. In London, Brent crude for March delivery is trading at $72.54 a barrel.
Currencies
The euro is trading at $1.3951 and at £0.8737.
For live currency updates, check the right-hand column of the Finfacts home page.The dollar traded at a record low $1.6038 per euro on July 15, 2008.
"Probably not a lot of fireworks until we get to the end of the week," Malcolm Polley from Stewart Capital Advisors predicted of action on the US stock market Tuesday. "People that are really hanging their hats on a normal recovery after this recession are in for a bit of a surprise as the consumer balance sheet is still in pretty bad shape."
