Sleuthing at Countrywide, Pleading at Carlyle
Countrywide faces an FBI fraud investigation. Carlyle faces $400 million in margin calls and the prospect of total liquidation. And Alabama home-brewers face off against opponents to end prohibition . . .
NEWS AT A GLANCE
Countrywide faces fraud investigation
The FBI has started a securities fraud investigation into No. 1 U.S. mortgage lender Countywide Financial, according to news reports. The investigation, still in its early stages, is examining whether company officials misled regulators about Countrywide’s financial situation and the quality of its loans. (AP in Yahoo! Finance) At least 15 companies are part of a wider FBI subprime probe. (CNNMoney.com) Bank of America said it still plans to complete its $4 billion acquisition of Countrywide. The bank’s board has “conflicting views” on “whether this is a good deal,” said David Lykken at Mortgage Banking Solutions, but “the economics will prevail and it will get done.” (Bloomberg)
Carlyle Capital seeks liquidation truce
Carlyle Capital, a troubled bond-fund unit of private equity firm Carlyle Group, said it is negotiating with lenders holding $16 billion in securities to hold off on further margin calls that could liquidate the rest of the fund’s collateral. (AP in Yahoo! Finance) Carlyle Capital said it faces margin calls topping $400 million, and lenders have liquidated collateral securing $5 billion of debt. (MarketWatch) Carlyle holds high-quality assets tied to home loans, and it should have started unwinding its positions as the mortgage market began slumping, analysts say. “This particular Carlyle entity wasn’t prepared,” said Philip Keevil at Compass Advisers in London. (Bloomberg in International Herald Tribune)
Autogrill takes the lead in duty-free
Italy’s Autogrill SpA, the largest manager of airport restaurants, is buying the duty-free unit of British airport operator BAA Ltd. and the rest of Aldeasa to also become the No. 1 owner of duty-free shops. The total price tag is about $1.5 billion, including $1.1 billion for BAA’s World Duty Free unit. (Bloomberg) “It is a high price but synergies are above expectations,” said Oddo Securities analysts. (Reuters) BAA, owned by Spain’s Grupo Ferrovial, will use the money to pay down some of its $18 billion in debt. Ferrovial had planned to quickly refinance BAA after it bought it in 2006, but the credit crunch intervened. Autogrill is owned by Italy’s Benetton family. (MarketWatch)
Sweet home-brew, Alabama
Home-brewing beer is illegal in Alabama, and a group of hobbyist brewers is jousting with Southern Baptists to get the Prohibition-era law amended in the state legislature. The 750-member-strong group, Free the Hops, is also trying to repeal a state law that prohibits selling beer stronger than 6 percent alcohol—South Carolina, North Carolina, and Georgia have recently scrapped similar laws. In Alabama, the two statutes leave craft-beer aficionados with few choices. Not that they are vigorously prosecuted. “You can imagine how confusing it is trying to enforce this,” said John Richardson, assistant administrator of Alabama’s alcohol control board. (Los Angeles Times, free registration)
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