NEWS AT A GLANCE
Bond insurers might give up AAA fight
MBIA and Ambac, the top two bond insurers, said they won’t seek to raise new capital to save their insurance units’ AAA ratings, after Moody’s said it would likely downgrade the bond units’ credit ratings yesterday. The two firms have raised a combined $4.1 billion in the last six months to stave off downgrades, as a surge in mortgage defaults threatened to drain the insurers’ capital reserves. “The disconnect between the market’s perception and the rating agencies’ assigned ratings has finally become an elephant in the room too big to ignore,” said Gimme Credit analyst Kathleen Shanley. (Bloomberg) A credit downgrade would likely cripple the insurers’ ability to write new business. (Reuters)
France Telecom bids on Swedish rival
France Telecom made an unsolicited $41.9 billion bid for Nordic telecom TeliaSonera, vying to become Europe’s largest phone company. The cash-and-stock offer represents a 26 percent premium over TeliaSonera’s share price April 15, before France Telecom first said it might make a bid. (Bloomberg) The deal would extend France Telecom’s footprint in growing markets in Eastern Europe and Turkey. TeliaSonera, controlled by Sweden and Finland, rejected the offer as too low, but analysts said it was too high. “The market thinks France Telecom is offering about $3 billion too much for TeliaSonera” said analyst Rob Goyens at Belgium’s Dexia bank. (The New York Times)
Verizon Wireless close to Alltel deal
Verizon Wireless is in advanced talks to buy Alltel Corp., Britain’s Vodafone said, for a reported $27 billion. The deal would make Verizon Wireless—jointly owned by Vodafone and Verizon—the No. 1 U.S. wireless company, topping AT&T. Alltel, with 13.2 million customers, is currently No. 5. (MarketWatch) Private equity firm TPG Capital and Goldman Sachs bought Alltel last November for $27.5 billion. Verizon has expressed interest in Alltel before. “Verizon is trying to reinvent itself as a wireless versus a wireline company,” said analyst Craig Moffett at Sanford C. Bernstein, and “the more they do, the faster they do it, the better.” (The New York Times)
Green thumbs, greenback rewards
Rising food prices are encouraging more people to try out their green thumbs, as families tear up parts of their lawns or flower beds to grow vegetables. At nurseries across the country, sales of vegetable plants, fruit trees, and herbs have risen by double digits over a year earlier, while flowers and decorative plant sales are down. After an initial investment of money and an ongoing time investment, gardening can save real amounts of money. “I’m in no way a tie-dye wearing granola hippie,” says Oregon marketing executive Dylan T. Boyd. “But I was looking at the price of blueberries the other day—$5 for a fistful. I thought, ’Are you kidding me?’” (The Wall Street Journal)
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
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- The hilarious hypocrisy of Republicans complaining about the imperial presidency
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- In Ferguson, Michael Brown lost his life — and America's police lost the benefit of the doubt
- 7 grammar rules you really should pay attention to
- How to survive a spaceship disaster
- How to be the most productive person in your office — and still get home by 5:30 p.m.
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