Wednesday, December 4, 2013
QUOTE OF THE DAY “Not only do they have to deal with rising U.S. production, they have to deal with the fact that they hate each other.” Phil Flynn, oil analyst, on the OPEC delegations from Saudi Arabia and Iran Article, 1D
T-bill rates fall at delayed auction
WASHINGTON - Interest rates on short-term Treasury bills fell in Tuesday’s auction. The weekly auction was delayed one day because of an error that occurred during systems testing.
The Treasury Department auctioned $32 billion in three-month bills at a discount rate of 0.075 percent, down from 0.080 percent last week. Another $27 billion in six month bills was auctioned at a discount rate of 0.100 percent, down from 0.105 percent last week.
The three-month rate was the lowest since three month bills averaged 0.050 percent Nov. 4. The six-month rate was the lowest since the bills averaged 0.095 percent Nov. 12.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.10, while a six-month bill sold for $9,994.94. That would equal an annualized rate of 0.076 percent for the three-month bills and 0.101 percent for the six-month bills.
AMC theaters seek $368 million in IPO
AMC Entertainment Holdings Inc., the U.S. movie chain controlled by China’s richest man, plans to raise as much as $368 million in an initial public offering that would value the company at up to $1.9 billion.
AMC, based in Leawood, Kan., will sell 18.4 million shares at $18 to $20 each, according to a statement Monday. The exhibitor, which said in August that it may sell as much as $400 million in stock, plans to use the funds to reduce debt and for general purposes.
The offering of Class A shares would return AMC, the second-largest U.S. theater chain by revenue, to a public listing for the first time in nine years. Dalian Wanda Group, which acquired AMC last year for $2.6 billion including debt assumption, would retain an 80 percent stake. Dalian Wanda, China’s largest entertainment company, is led by Wang Jianlin, whose estimated net worth of $12.4 billion is the highest in China, according to the Bloomberg Billionaires Index.
Wichita OKs $40 million in Cessna bonds
WICHITA, Kan. - The Wichita City Council has approved about $40 million in industrial revenue bonds for Cessna.
The Wichita Eagle reports the council approved the bonds Tuesday. The plane builder says the move should create at least 50 more jobs. The plan calls for Cessna to receive a 100 percent property tax abatement on improvements for five years, with a second five-year term subject to council approval.
Industrial revenue bonds are issued by governments without taxpayer liability and don’t affect the tax revenue or the credit of the issuing government.
The bonds will finance work on Cessna’s Wichita campus, including improvements to production space and aircraft manufacturing. Also included are computer hardware and software and tools.
Fiat nears Jeep assembly deal in China
BEIJING - Fiat is nearing a deal to begin producing Jeep vehicles in China after making concessions to its Chinese partner over the manufacturing site, two people familiar with the talks said.
Fiat recently agreed to locate Jeep assembly near the base of Guangzhou Automobile Group in the Panyu district of Guangzhou, backing off a previous plan to use another site, said the people, who asked not to be identified because the talks are private. The accord is still subject to final approval, one of the people said.
The agreement paves the way for Jeep, which in 1983 was the first foreign brand to be produced in China, to make a return after production stopped in 2006. The move could tie up additional capital as Chief Executive Officer Sergio Marchionne seeks to forge a global automaker by merging Fiat and Chrysler.
Fiat stock has climbed 46 percent this year, valuing the company at $9.4 billion.
The Chinese government approved Guangzhou Auto and Fiat’s plan to invest $770 million in a new factory, which will have an initial production capacity of 60,000 units a year.
Argentine foreign credit card tax swells
Argentine President Cristina Fernandez de Kirchner increased a tax on credit card purchases abroad ahead of the Southern Hemisphere summer vacation period to stem a hemorrhaging of reserves to a seven-year low.
The government raised a levy on card purchases in foreign currency to 35 percent from 20 percent, according to a resolution published in Tuesday’s Official Gazette.
Central Bank reserves have plunged 29 percent this year to $30.9 billion as the government uses them to pay international debt and import energy, while Argentines have increased spending on foreign vacations and online shopping. The tax increase raised Tuesday’s implicit exchange rate on air tickets and purchases abroad to 8.3 pesos to the dollar from 7.4. In the official market, the peso fell 0.19% to 6.17 pesos per dollar, while the dollar on the illegal street market traded around 9.15 pesos, according to ambito.com.
“There’s been a drain of foreign currency due to tourism, and we need to be very careful in order to guarantee the inflow of semi-finished and basic goods,” Cabinet Chief Jorge Capitanich said Tuesday.
Testimony to start in ex-BP worker’s trial
NEW ORLEANS - A jury is set to hear testimony today from the first witness at the trial of a former BP drilling engineer charged with deleting text messages and voice mails about the company’s response to its 2010 oil spill in the Gulf of Mexico.
Jurors heard opening statements Tuesday evening from a Justice Department prosecutor who vowed to prove that Kurt Mix was trying to destroy evidence when he deleted hundreds of text messages to and from a supervisor and a BP contractor.
An FBI supervisor who worked on the case against Mix was expected to testify today when the federal trial resumes in New Orleans.
But a defense lawyer said Mix wasn’t trying to hide anything from a grand jury probing the nation’s worst offshore oil spill.
Mix has pleaded innocent.
Business, Pages 26 on 12/04/2013