Moody’s to review ratings
The subordinated debt ratings of 177 banks in 46 countries will be reviewed and the grades may be cut as Moody’s Investors Service reassesses governments’ willingness and ability to support lenders in difficulties. Moody’s will begin its review in countries such as Germany, where governments have reformed their bank resolution regimes and shown “a clear intent” to impose losses on creditors, the New York-based ratings firm said yesterday. As new legislation is enacted in various nations, Moody’s said it would analyze the probable impact and review ratings likely to be affected. “Regulators have expressed an intent to reach more deeply into the capital structure to recover in future bailouts the cost to taxpayers,” Moody’s said. As well as imposing losses on equity, holders of “preferred stock, other forms of hybrid capital and now, in many countries, subordinated debt,” have been hurt, Moody’s said.
Boeing unveils newest 747
US aerospace giant Boeing on Sunday unveiled its 747-8 Intercontinental, a longer and more fuel efficient update of its emblematic jumbo jet, which it hopes will compete with Airbus A-380. “Look at this marvelous flying machine, it’s our future,” said Pat Shanahan, Boeing’s vice president and general manager of commercial airplanes division, at the unveiling ceremony at the company’s plant in Everett, Washington. Boeing has orders for 33 — including from Lufthansa and Korean Air — of its 747-8 Intercontinental, which is the passenger version. It has 74 orders for the freight version. Lufthansa, which has ordered 20, will be the first to receive the new model, according to Boeing, likely early next year.
Credit Suisse to sell bonds
Credit Suisse Group AG, Switzerland’s second-biggest bank, agreed to sell about 6 billion Swiss francs (US$6.17 billion) of contingent convertible bonds to shareholders in Qatar and Saudi Arabia. The notes will be issued to Qatar Holding LLC and The Olayan Group no earlier than October 2013, in exchange for cash or Tier 1 capital notes the bank sold to the investors in 2008, the Zurich-based company said in an e-mailed statement yesterday. Last October, a Swiss government-appointed committee proposed that Credit Suisse and UBS AG should hold almost double the capital required under the Basel III rules and use contingent convertible bonds to satisfy part of the requirement. The so-called CoCos automatically become equity when certain triggers, such as preset capital levels, are breached.
Tablet shipments to jump
Shipments of tablet computers may jump sixfold in two years to 101 million units next year, undermining sales of video-game players and traditional personal computers, Morgan Stanley said. The shipments may increase to 65 million this year from 16 million last year, the investment bank said in a report yesterday. The global penetration rate of tablet computers is estimated at 3 percent, compared with 75 percent for desktop computers, 63 percent for notebooks and 30 percent for smartphones, according to the report. The nascent market may benefit Apple Inc and Samsung Electronics Co, while having a “cannibalization” effect on makers of gaming devices including Sony Corp and Nintendo Co, Morgan Stanley said. Companies whose earnings are driven by chips used in notebook computers, such as Advanced Micro Devices Inc, may also see a negative impact, the report said.