LITTLE ROCK — QUOTE OF THE DAY
“We’re not growing as fast as we’d like, but we’re still growing.The U.S. economy is expanding and continues to expand.”
Michael Feroli, chief economist at JPMorgan Chase & Co. Article, 1D
3-month, 6-month T-bill rates slip
WASHINGTON - Interest rates on short-term Treasury bills fell in Monday’s auction with rates on six-month bills dropping to the lowest level in four weeks.
The Treasury Department auctioned $32 billion in three month bills at a discount rate of 0.105 percent, down from 0.125 percent last week. Another $28 billion in six-month bills was auctioned at a discount rate of 0.150 percent, down from 0.160 percent last week.
The three-month rate was the lowest since three-month bills averaged 0.100 percent two weeks ago on Oct. 22. The six-month rate was the lowest since these bills averaged 0.145 percent four weeks ago on Oct. 9.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.35, while a six-month bill sold for $9,992.42. That would equal an annualized rate of 0.106 percent for the three-month bills and 0.152 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, edged down to 0.18 percent last week from 0.19 percent the previous week.
- The Associated Press
China challenges EU solar subsidies
BEIJING - China has filed a World Trade Organization case challenging subsidies provided by some European Union members to promote the solar-panel industry, adding to a flurry of trade disputes that Beijing is locked in with Europe and the United States.
Commerce Ministry spokesman Shen Danyang said in a statement Monday that China is requesting a consultation at the WTO on the issue.
China accuses some EU countries of providing subsidies for power generated by solar facilities in which the main components are manufactured in European countries.
Shen said such subsidies “seriously damaged China’s photovoltaic exports.”
The statement did not specify which countries are being targeted in the WTO case, but the official Xinhua News Agency cited a Commerce Ministry official as saying that Italy and Greece provide such subsidies for projects using EU-produced solar equipment.
The case follows an anti-dumping probe Beijing announced last week into European exports of polysilicon that is used in making solar panels. Before that, the EU launched an investigation in September into whether Beijing was improperly subsidizing exports of solar panels.
On Wednesday, the U.S. International Trade Commission is to vote on whether Chinese trade practices have injured the U.S. solar industry. It’s the final hurdle in a more than year-long effort by the U.S. to impose steep tariffs on Chinese solar panels.
- The Associated Press
Humana’s 3rd quarter net falls 4%
LOUISVILLE, Ky. - Health insurer Humana Inc. said Monday that its third-quarter net income fell 4 percent as more premium dollars from its members went to pay for medical claims, offsetting continued growth in its lucrative Medicare Advantage business.
Louisville-based Humana reported net income of $426 million, or $2.62 per share, in the third quarter. That’s down from $445 million, or $2.67 per share, a year ago. Analysts polled by FactSet expected earnings of $2.05 per share.
Revenue rose to $9.65 billion from $9.3 billion a year ago.
Analysts expected $9.88 billion.
Humana said it now expects to earn $7.25 to $7.35 per share in 2012, up from its previous estimate of $6.90 to $7.10 per share.
Analysts had expected earnings of $7.12 per share for the year.
Humana also said it has agreed to acquire Metropolitan Health Networks Inc. in a deal aimed at strengthening its Medicare Advantage business, a government-subsidized comprehensive health insurance for seniors. The transaction, subject to shareholder approval, is expected to close early next year.
Metropolitan Health coordinates medical care for Medicare Advantage and Medicaid recipients. Humana will pay $11.25 per share in cash to acquire Metropolitan Health’s outstanding shares. That part of the deal is worth about $500 million. It will also assume Metropolitan Health’s debt and other costs, bringing the total value of the deal to about $850 million.
- The Associated Press
GM raises $11 billion in credit lines
DETROIT - General Motors says it has received $11 billion in credit lines from 35 financial institutions in 14 countries, boosting its available cash and credit to more than $42 billion. The company said Monday the money is a source of “backup liquidity” that may be used for “strategic initiatives.”
Analysts said GM could be hoarding the cash to help pay for restructuring in its troubled European operations, buying an auto finance arm in Europe from Ally Financial, or to further fund its pension plans. GM also could buy back stock, specifically from the U.S. government. The U.S. Treasury Department owns 26.5 percent of the company.
GM says the new lines have more favorable terms than its existing one. Chief Financial Officer Dan Ammann said the lines are a vote of confidence in the company’s financial strength.
Standard & Poor’s gave the GM credit lines an investment-grade rating of “BBB” on Monday. GM said it expected the new credit lines to get investment-grade ratings from all three major ratings agencies.
But that doesn’t mean GM’s overall corporate credit rating changed from junk status. S&P’s corporate rating on GM remains at “BB+,” the highest junk rating. Moody’s and Fitch, the two other ratings agencies, also both have GM’s corporate credit at a notch below investment grade.
- The Associated Press
Kodak can cut retiree health benefits
ROCHESTER, N.Y. - A bankruptcy court judge will allow Eastman Kodak Co. to end retiree health benefits at the end of the year as part of its restructuring.
In his ruling Monday, U.S. Bankruptcy Court Judge Allan Gropper called the move fair and reasonable.
The Rochester-based photography company reached an agreement last month with a court-appointed committee of retirees to eliminate its current $1.2 billion liability for medical, life insurance and survivor benefits. In exchange, Kodak will pay a total of $650 million in claims and $7.5 million in cash into a fund to be used for future payments.
A statement from Kodak on Monday said the agreement will reduce one of the company’s biggest legacy liabilities and marks a major and necessary step toward its emergence from Chapter 11 bankruptcy protection.
Business, Pages 22 on 11/06/2012