Business news in brief

QUOTE OF THE DAY

"It's going to take a Herculean effort to integrate these two companies."

Peter Falvey,

a managing director at Revolution Partners LLC

in Boston, talking about Xerox Corp.'s deal to buy Affiliated Computer Services Inc.

Article, 1D

Rates mixed at Treasury-bill auction

WASHINGTON - Interest rates on six-month Treasury bills remained at a record low in Monday's auction, while rates on three-month bills rose.

The Treasury Department on Monday auctioned $29 billion in six-month bills at a discount rate of 0.190 percent, the same as last week. That's the lowest rate since the government started issuing six-month bills on a weekly basis in December 1958.

About $30 billion in three-month bills were auctioned at a discount rate of 0.115 percent, up from 0.1 percent last week.

Rates on three- and six-month bills have been selling at historically low levels for months, reflecting a campaign by the Federal Reserve to push down short-term borrowing costs in an effort to help support a recovery from the country's worst recession since the 1930s.

Fed officials last week agreed to keep the federal funds rate, the interest that banks charge each other on overnight loans, at an all-time low of zero to 0.25 percent. The funds rate has been at that level since December.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.09, while a six-month bill sold for $9,990.39. That would equal an annualized rate of 0.117 percent for the three-month bills, and 0.193 percent for the six-month bills.

Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, rose slightly last week to 0.41 percent from 0.40 percent.

Ex-Enron unit chief sent to prison

HOUSTON - The former chief executive of the failed Internet division of the former energy giant Enron Corp.

has been sentenced to 16 months in prison.

A federal judge sentenced Joseph Hirko in Houston on Monday. Hirko also has agreed to pay $8.7 million in restitution as part of a plea deal with federal prosecutors.

Prosecutors say Hirko falsely promoted Enron's broadband division to analysts to help pump up the company's stock price. Hirko admitted that he knew the broadband operating system couldn't do what it had been promoted to do.

Hirko's attorney, Per Ramfjord, had asked for a sentence of a year and a day, telling U.S. District Judge Vanessa Gilmore that his client was not as culpable as other Enron broadband executives who were charged in the case and that there was no way to calculate the loss caused to investors by what happened in the broadband unit.

Enron was once the seventh-largest U.S. company. It collapsed into bankruptcy in December 2001 after years of accounting tricks could no longer hide billions of dollars in debt nor make failing ventures appear profitable.

Minneapolis daily exits Chapter 11

MINNEAPOLIS - The Star Tribune of Minneapolis has emerged from bankruptcy protection with new ownership and reduced debt.

In emerging from Chapter 11 on Monday, the Star Tribune is now owned primarily by its senior lenders, led by investment group Angelo, Gordon & Co. The company's debt is $100 million, down from $480 million when it filed for Chapter 11 on Jan. 15.

A federal bankruptcy judge approved the Star Tribune's reorganization plan earlier this month.

New board Chairman Michael Sweeney said the Star Tribune's emergence from bankruptcy protection "marks a fresh start with reduced debt, lower costs and new ownership."

Publisher Chris Harte plans to step down, but a new publisher has not been chosen yet.

Yuan bonds debut in Hong Kong

BEIJING - The first sale in Hong Kong of Chinese government bonds denominated in the mainland's yuan began Monday, adding to Beijing's gradual campaign to expand the use abroad of its tightly controlled currency.

Banks took applications from the public for a portion of the 6 billion yuan ($875 million) issue. There was no immediate indication whether investor demand was strong. The bonds are to be issued Oct. 27.

The yuan, also known as the renminbi, or people's money, does not trade on global markets. But Beijing has approved its use in trade between Hong Kong and some mainland cities and has signed a currency swap deal with Argentina and agreements to lend yuan to four other nations in emergencies.

The bond sale "will help the renminbi become an international currency, but the impact will not be huge," said Zuo Xiaolei, chief economist of Galaxy Securities Ltd. in Beijing.

Hong Kong is Chinese territory but has its own currency and regulatory system and often is used by Chinese companies to deal with foreign investors.

Hong Kong leaders want to develop the territory as a center for nonmainland trading of the yuan. They hope the business will boost finance industries that have been battered by the global economic crisis.

EU to set decibel cap on MP3 players

BRUSSELS, Belgium - The European Union said Monday that it wants makers of popular digital music players to recommend users turn the volume down to preserve their hearing.

The EU's Consumer Affairs Commissioner Meglena Kuneva said experts and the industry will together draft tougher standards to limit hearing loss.

"If you want to enjoy your favorite songs in 20 or 30 years time, turn the volume down," Kuneva said.

Action is necessary because there is cause for concern over health risks, especially to younger people, she said.

An EU scientific advisory body says that between 2.5 million and 10 million Europeans could suffer hearing loss from listening to MP3 players at unsafe volumes - over 89 decibels - for more than an hour daily for at least five years.

Business, Pages 20 on 09/29/2009

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