SINGAPORE, March 16 (IFR) – Chinese property bonds
remained under pressure today following the sudden spike in
primary supply from the sector. A new bond priced by KWG to
yield 13.5% yesterday weighed on the space with most bonds
dropping as much as USD1.

The worst performer was RenHe, which has already been
suffering since its rating was downgraded one notch to B+ by SP
earlier this week. The companys 2016s, which had started the
week bid at 84.00 were being bid today 81.50. One trader said
that anyone who could find a buyer was selling what they had.

But RenHe was not alone. KWGs deal had the effect of making
it clear to investors that Chinese property companies will
return to the market and are willing to pay up for money. The
prospect of supply pushed the prices on all bonds in the sector
about USD1 lower.

Even the weeks outperformers, Agiles new 2017s, lost some
ground today and fell below reoffer of 99.90 closing at
98.75-99.25. They had traded above par earlier in the week, The
newly created KWG 2017s were showing no strength and remained
below reoffer level at 98.75.

However, trading was scant, as befits a Friday session, with
just a handful of spaced-out trades being printed. It was
enough, though, for the Asia ex-Japan iTraxx IG 16 index to
touch a level it had not seen since the first week of August.

The key CDS yardstick was closing the session bid at 135bp.
Indeed, at that level it was set for a bounce given that it was
touching the resistance of the two standard deviation bollinger
band of the 51-day moving average. Looks like its time to
sell, said a trader in Singapore.

Yet, it does not look like the bounce is coming so soon.
Fund flows into EM fixed income were very strong at USD1.4bn
according to EPFR, almost 14% higher than the week before.

And if the IG index breaches through that second bollinger,
its next resistance is only at 115bp, where the three standard
deviation bollinger is. The index has only breached through the
three-standard deviation bollinger band three times in the past
two years.

Twice it was a widening move due to major volatility in the
market but once, last February, it was a tightening move. But
once it touched the other bollinger it bounced invariably. So it
seems that while the trader could be proven wrong this time,
there is only so much more that Asian IG credits can tighten.

To be sure, much of the tightening in the index was driven
by a sharp move in US Treasuries, instead of a sudden spike in
interest for Asian investment-grade. The yield on the 10-year US
Treasury spiked almost 20bp this week amid a sudden bout of risk
appetite.

And while Asian benchmarks did drop in price as well, they
lagged the benchmark and saw their spreads tighten as a result.
For instance, the yield on the 2037 bonds of the Philippines
widened only some 10bp throughout the week while the 30-year US
Treasury widened a whopping 27bp. Even having outperformed US
Treasuries, though, benchmarks lost ground from a price
perspective.

Indonesias 2042s lost some USD2 in the week to close today
at 106.25 mid-market. But, given the level of outperformance to
the US Treasuries, it looks like they could be set for a
correction next week, at least from a price perspective.

By Ryan Vlastelica

NEW YORK |
Thu Mar 15, 2012 4:33pm EDT

March 15 (Bloomberg) — The cost to protect against a default by the MBIA Inc. unit that guaranteed toxic mortgage debt dropped after UBS AG was said to have agreed to settle claims challenging the bond insurers 2009 restructuring.

Swaps tied to MBIA Insurance Corp. declined three percentage points to 26.7 percent upfront, the lowest in more than two weeks, according to data provider CMA. Thats in addition to 5 percent a year, meaning it costs $2.67 million initially and $500,000 annually to protect $10 million of MBIA Insurances debt.

UBS will withdraw from litigation in New York State Supreme Court in which banks claim the insurers restructuring left it insolvent, according to a person familiar with the matter, who declined to be identified because he wasnt authorized to speak publicly.

Switzerlands biggest lender is one of four remaining banks in the lawsuit that had bought default protection from MBIA against losses on mortgage-linked debt. Fourteen other firms dropped out of the suit, including Morgan Stanley and Barclays Plc after settlements that terminated their hedges with MBIA.

UBS said in its annual report today that it lowered its 2011 net trading income by 167 million Swiss francs ($180 million) and booked a tax benefit of 28 million francs after agreeing to settle credit-default swaps with a monoline insurer in exchange for a cash payment. The Zurich-based bank didnt disclose the name of the insurer.

Contracts on MBIA Inc. also declined, easing 1.4 percentage points to 13.3 percent upfront, the data show.

Market Benchmark

Credit-default swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. The contracts, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, decline as investor confidence improves and rise as it deteriorates.

Kevin Brown, a spokesman for Armonk, New York-based MBIA, and Tatiana Togni, a spokeswoman for UBS, declined to comment. MBIA attorney Marc Kasowitz didnt immediately respond to a phone message and e-mail seeking comment.

Swaps on MBIA dropped as a benchmark gauge of corporate credit risk broke below 90 basis points for the first time since July, two days after the Federal Reserve raised its assessment of the economy. The Markit CDX North America Investment Grade Index tied to 125 companies in the US and Canada fell 0.9 basis point to a mid-price of 90 basis points at 5:24 pm in New York, according to Markit Group Ltd.

Jobless Claims

The gauge, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, reached an eight-month low after US economic reports showed initial jobless claims dropped last week to match a four-year low and US consumer confidence rose to the highest since 2008, signaling an improving labor market may boost household spending.

The swaps index, which typically falls as investor confidence improves and rises as it deteriorates, touched 89.4 basis points, the lowest intraday level since July 1. Credit swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.

The cases are ABN AMRO BANK NV et al v. MBIA, 601475-2009, and ABN AMRO BANK NV et al v. Eric Dinallo, 601846-2009, New York State Supreme Court (Manhattan).

–With assistance from Elena Logutenkova in Zurich. Editors: Shannon D. Harrington, John Parry

To contact the reporters on this story: Mary Childs in New York at mchilds5@bloomberg.net; David McLaughlin in New York at dmclaughlin9@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

5 days ago 

Private tenants’ success at keeping up with their rental payments will be included on credit reports under plans announced by credit reference agency Experian.

The scheme allows landlords registered for the initiative to share information on a secure website and could help tenants get better access to mainstream low-cost credit, Experian said.

The Rental Exchange could help renters to strengthen their credit history in the same way as home owners, whose mortgage history is already included on credit reports. The information will be held by Experian’s secure database for up to 36 months, being accessed by other landlords and credit providers only when requested with the express consent of the tenant.

Experian said the information would also help lenders treat customers more fairly by producing more accurate lending decisions. This could mean a boost for would-be first-time buyers, many of whom have been trapped in the rental sector as they have been unable to meet borrowing criteria.

Many tenants have remained in the rental sector as they are unable to raise the 20% deposit on a house often demanded by lenders, although others are renting for longer amid uncertainty about in which direction house prices will go.

Recent rental studies have found that the vast majority of tenants keep up with their rents, with around 10% of rent being late or unpaid at the end of each month.

Paul Vescovi, UK & Ireland managing director of Experian Credit Services, said: “With several million people living in privately rented accommodation, a significant percentage of the population could be missing out on mainstream, low-cost credit because lenders do not currently have a comprehensive picture of their financial track record.

“The Rental Exchange will strengthen people’s credit histories, helping them to access a wider range of credit deals.”

Stronger credit reports will also speed up credit checks as financial organisations will be less reliant on slower, paper-based methods, Experian said.

Nick Jopling, executive director of residential landlord Grainger, said: “As renting increasingly becomes a lifestyle choice for many Britons, it is important that the process for credit scoring accurately reflects a tenant’s status and rent payment history to enable them to have fair access to affordable credit and services.”

Copyright © 2012 The Press Association. All rights reserved.

March 15 – What a difference a few months make. US lodging continued
its strong growth momentum in the fourth quarter of 2011 across all price
segments, with revenue per available room (RevPAR) growing 7.9% as a result of
occupancy and average daily rate (ADR) growth in equal measure. RevPAR grew 8.2%
for full-year 2011, which was at the high end of Standard Poors Ratings
Services 6% to 8% forecast range for the year. This produced an almost audible
sigh of relief from rated companies in the industry, which, just a few months
ago, were setting wider-than-usual guidance ranges for 2012 RevPAR growth and
terminating pricey hotel purchases because of significant uncertainty for RevPAR
at the time. Although few, if any, expect the US economic recovery to be
robust (our economists are forecasting GDP and consumer spending growth of about
2% in 2012 and 2013, and SP 500 operating earnings growth of 8% in 2012 and
6.5% in 2013), our economists have reduced our recession risk estimate to 25%
from 40% last fall. Fourth-quarter 2011 momentum carried into January 2012, with
RevPAR growing 8.1%, although RevPAR growth has moderated to 5.9% in the 28 days
ended March 3, 2012, owing to a modest slowdown in demand and occupancy growth
in the industry.

In response to our economists lowered GDP forecast that eurozone economies
will be flat in 2012, we have revised our expectation downward for 2012 RevPAR
in the European lodging industry. We now believe that European RevPAR could be
flat in 2012 compared with 2011 (down from our previous low-single-digit
growth projection). The downward revision mainly reflects lower industry
expectations in Southern European countries.

In the quarterly commentary article titled Fourth-Quarter Credit Impact: US
And European Lodging, published yesterday, Standard Poors Ratings
Services credit analysts following the US and European lodging sector
discuss performance expectations for operators in these regions. The report
also provides updated credit views on 11 rated lodging companies.

The report is available to subscribers of RatingsDirect on the Global Credit
Portal at www.globalcreditportal.com. If you are not a RatingsDirect
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280
or sending an e-mail to research_request@standardandpoors.com. Ratings
information can also be found on Standard Poors public Web site by using
the Ratings search box located in the left column at www.standardandpoors.com.
Members of the media may request a copy of this report by contacting the media
representative provided.

DOW JONES NEWSWIRES

Credit Agricole SA (ACA.FR) has handed the remains of a closed business in its investment bank over to BlueMountain, a US hedge fund, as European banks seek new ways to boost capital, the Financial Times reports on its website.

Citing the head of the French banks corporate and investment banking unit, Jean-Yves Hocher, it says the deal will cut its risk-weighted assets by EUR14 billion, helping it to meet upcoming capital requirements set by European regulators. Most of the Western European banks are coping with a lack of liquidity and the need to deleverage, he told the FT.

BlueMountain has in effect taken over what is left of Credit Agricoles structured credit market-making business that ceased operations three years ago, comprising thousands of outstanding derivative contracts related to corporate bonds, the FT says.

Full story: http://www.ft.com/intl/cms/s/0/71b894c4-6eb7-11e1-afb8-00144feab49a.html?ftcamp=published_links/rss/companies/feed//product#axzz1pGAJIxvg

Copyright copy; 2012 Dow Jones Newswires

Today, Congress is still reviewing how to help create jobs and jumpstart the nations fragile economic recovery.

The nations credit unions and their nearly 94 million members want to know: If not now, then when will the Congress get serious about real efforts to create jobs and improve access to credit for Americas Main Street businesses? The bipartisan Small Business Lending Enhancement Act remains the best untried option to help our nations main-street businesses create jobs and its incomprehensible that Congress may act on yet another jobs bill without considering this legislation.

Recently, legislation was put forward by Senators Mark Udall (D-CO) and Olympia Snowe (R-ME) in the Senate (S. 509) and Representatives Ed Royce (R-CA) and Carolyn McCarthy (D-NY) in the House (HR 1418) that would raise the arbitrary member business lending cap credit unions currently face. Restricting credit unions on the amount of business lending they can facilitate is counterproductive to job creation and should be addressed immediately. he Treasury Department and the National Credit Union Administration (NCUA) have signed-off on this common sense proposal that would create jobs without spending a single dime of taxpayer funds. This legislation could spur over $13 billion in new lending and create over 140,000 new jobs in the first year alone at no cost to taxpayers.

Raising the credit union member business lending cap is a win-win for credit unions, small business and our nations economy. Throughout our nations financial crisis, credit unions have continued to be one of Main Streets most reliable financial resources. In fact, 2011 data underscores the value of credit unions in todays financial landscape. Credit union membership growth more than doubled from 2010. Lending also continued to grow, with total loans increasing 1.2 percent to $571.5 billion from $564.7 billion in 2010. Specifically, business lending rose by 5.2 percent over the previous year. Credit unions would like to do more but they are hamstrung by this arbitrary lending cap.

Lifting the member business lending cap should be coupled with any other job creation efforts considered in Congress. Anything less represents another missed opportunity to maximize the availability of credit to American small businesses and help our economy recover. Just as our economy is beginning to show signs of an upswing and the stock market is on a rally, it behooves Congress to consider this no-cost option.

If not now, then when?

Nomura Holdings Inc. (8604)’s debt rating
was cut to the lowest investment grade by Moody’s Investors
Service, which said global competition raises questions over the
profitability of Japan’s biggest securities firm.

The one-step reduction brings Nomura’s long-term debt
rating to Baa3, one level above junk. Moody’s has a “stable”
outlook on the rating, it said in a statement.

The cut, which follows a review Moody’s began in November,
may raise Nomura’s borrowing costs and oblige the firm to
increase collateral to counterparties on derivatives trades.
Nomura is trimming $1.2 billion of expenses that mounted since
it bought bankrupt Lehman Brothers Holdings Inc.’s Asian and
European operations during the 2008 global financial crisis.

“There remains uncertainty about the long-term positioning
and profitability of Nomura’s international capital market
activities, given its weaker market share compared with those of
its global peers,” Moody’s said in the statement yesterday.

The market reacted little to the move, after Moody’s said a
month ago that any downgrade would probably be by one level.
Shares of Nomura rose 0.3 percent, or 1 yen, to 401 yen as of
1:51 pm in Tokyo. The yield premiums on Nomura’s dollar-
denominated notes due 2015 relative to Treasuries rose 5.9 basis
points to 295.3, according to BNP Paribas SA prices.

Worldwide Scrutiny

Banks worldwide are facing scrutiny by Moody’s. The New
York-based company said on Feb. 15 that it may lower ratings of
17 global banks and securities firms, including Nomura, because
of challenges including higher borrowing costs, stricter
regulatory burdens and lower profitability.

Macquarie Group Ltd., Australia’s largest investment bank,
was also downgraded one level, to A3, by Moody’s, which cited
“ongoing earnings challenges.”

Moody’s rates Nomura lower than Wall Street rivals
including Goldman Sachs Group Inc. (GS), whose A1 grade is the fifth
highest. BNP Paribas SA, France’s biggest lender, had its rating
cut to Aa3 in December after funding costs rose amid the
region’s sovereign debt crisis.

Daiwa Securities Group Inc. (8601), Nomura’s biggest domestic
competitor, was also cut to Baa3 by Moody’s four months ago.

“Management at Nomura is attempting to bring greater focus
to its international investment banking activities — a strategy
it has pursued in various forms over a number of years — but
given the competitive position of Nomura’s international capital
markets platform we think the Baa3 rating better reflects these
risks,” Elisabeth Rudman, a senior vice president at Moody’s,
said in the statement.

‘Solid Platform’

The downgrade was “disappointing,” Nomura said.

“Nomura maintains a solid platform across its retail,
asset management and wholesale businesses,” the Tokyo-based
company said in a statement. “Our robust capital base and
abundant liquidity position us well to respond to the ongoing
challenges facing the investment banking industry.”

Nomura’s prospects have shown signs of improving since
Moody’s announced its review on Nov. 9.

Shares of the Japanese firm have climbed 72 percent this
year, the second-biggest gainer on the Nikkei 225 Stock Average. (NKY)
Nomura returned to profit in the three months ended December
from a loss in the previous quarter, driven in part by cost-
cutting efforts.

The price to insure the bank’s debt against default for
five years has tumbled to 260 basis points yesterday from as
high as 410 in November, according to data provider CMA. That
compares with 225 for credit default swaps on Daiwa bonds and
215 for Goldman Sachs.

Cost-Cutting Progress

Moody’s said Nomura has made “significant progress” on
its $1.2 billion expense-reduction plan and that the program
will boost Nomura’s future performance.

Chief Executive Officer Kenichi Watanabe’s firm is cutting
jobs, trimming personnel expenses by 11 percent in the three
months ended December from a year earlier. Nomura will cut about
30 managers in its fixed-income unit, a person briefed on the
matter said on March 13.

Two of the highest-ranking former Lehman employees stepped
down in January. Jesse Bhattal, who was chief of wholesale
banking, left Nomura after his division accumulated losses.
Tarun Jotwani’s global markets division was split into equities
and fixed income after he resigned.

Chief Operating Officer Takumi Shibata said on Feb. 1 that
a credit-rating downgrade would require the firm to supply more
collateral for derivatives transactions, adding that the bank
has enough cash to withstand it.

Net income climbed 33 percent to 17.8 billion yen ($213
million) in the three months ended Dec. 31 from a year earlier,
buoyed by the sale of private-equity investments, earnings
figures showed on Feb. 1. Brokerage commissions, investment
banking fees and trading profit all fell in the quarter from a
year earlier, and pretax losses from operations abroad widened.

To contact the reporter on this story:
Takahiko Hyuga in Tokyo at
thyuga@bloomberg.net

To contact the editor responsible for this story:
Chitra Somayaji at
csomayaji@bloomberg.net

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Change doesnt come quickly to the credit card business. It took almost two decades for engineers to agree on the standard for the magnetic stripe. Another 25 years passed before European banks issued cards with embedded microchips, a technology that never took off in the United States.

Even todays contactless credit cards handle fewer than 1 in 20 transactions. Yet, banks, retailers and consumers demand more secure alternatives to todays plastic payment tools. By 2020, you might not recognize your own credit card, if your issuer picks up on one of these four payment technology trends.

Credit cards that dont look like credit cards

Wallet, watch, keys and cell phones. Thats the checklist most of us run through before leaving the house. If Silicon Valley engineers get their way, shoppers of the future will only have to worry about remembering their phones.

Youve probably already checked the time on your phone instead of your watch. Some home security systems and apartment building access doors let residents buzz themselves in by dialing a secret phone number. Thanks to near-field communication technology, cell phones might replace credit cards as our preferred way to pay. If you cant wait, you can elect to pay with your watch.

Phones like Samsung Galaxy Nexus can mimic a credit cards contactless EMV chip. Just wave the phone at a MasterCard PayPass or Visa PayWave terminal for a speedy authorization that retail analysts claim will shave up to 8 seconds off the length of a transaction. You might not notice the difference, but a fast food restaurant or a convenience store will appreciate the extra few customers it can handle during rush hour, one of which may be you.

If your cell phone doesnt support NFC, attach an EMV sticker to your current device, or to anything else you want to convert into a conduit for legal tender. Tapping your favorite toy against a gas station counter could pay for your soft drink someday.

Biometrics that let you pay with your body (legally)

Visitors to the Walt Disney World Resort in Florida can see the future, just by entering a theme park. Disney launched one of North Americas first broad deployments of biometric devices in 1996 to combat ticket scalpers. With a technology revision in 2006, annual pass holders need only scan a single finger at theme park turnstiles.

Instead of capturing fingerprints, biometric scanners combine key fingerprint points with maps of the veins beneath the skin. As retailers, banks, and consumers become more comfortable with the technology, shoppers could link biometric scans with securely stored credit card accounts.

Of course, some retailers still support the ultimate biometric device: a personal relationship with the customer. The merchant terminal service offered by Square allows retailers to set up a tab for customers who can pay by name. A barista or cashier who knows a regular patron well can select their name or photo from a list, charging a purchase to a card already swiped through one of Squares magnetic stripe readers.

The service may feel like a return to Mr. Gowers pharmacy in Its a Wonderful Life, but mom-and-pop retailers can use the tool to encourage loyalty without investing in costly equipment.

Using the cloud to keep data secure

Workers at a big box retailer like Home Depot might not recognize a repeat customer by sight. Thats why the hardware megastore has teamed up with PayPal to eliminate the need for credit cards at its checkout counters. Typing in an email address and password can authorize Home Depots register to bill your bank account or credit card stored on PayPals secure servers.

The process resembles that of another PayPal service, Bill Me Later, that uses a customers email address, date of birth and social security number instead of an account number to process credit purchases.

Reaching this payment nirvana may require a hefty dose of ginkgo biloba as a memory aid, though. Compared to shoppers elsewhere in the world, Americans often struggle to remember passwords and personal identification numbers. When Visa studied differences in PIN adoption between Europe and the United States, they found that many Americans struggled to remember even the four-digit PINs attached to their debit cards.

Company spokeswoman Stephanie Ericksen actually wrote a blog post to assure American customers that a planned rollout of contactless EMV chips wouldnt require cardholders to memorize any personal identification numbers.

Smarter smart cards

Consumers have embraced the convenience of loading prepaid debit cards at supermarkets and drugstores. Yet, keeping tabs on your balance still requires calling a customer service hotline or logging on to an issuers website. Asian banks have already piloted next-generation debit cards with electronic ink displays. The readout updates a users remaining balance with each purchase or reload. Banks may consider using the same technology to inform customers about available credit or potential fees for an upcoming transaction.

Clinging to the form factor of the traditional credit card could bring future benefits. Razor-thin batteries and microchips can reprogram credit cards on the fly, enabling users to summon an entire wallets worth of accounts from a single piece of plastic.

Sliding or tapping an interface can update the account number displayed on a credit cards face, while reprogramming the magnetic stripe and EMV card to match. Instead of tapping a PIN number on a retailers point of sale terminal, you might tap a PIN directly on your card to unlock it. Technology like this makes a lost or stolen card useless to thieves, while blocking skimmers who might try to swipe or remotely scan your account information.

Even if the credit cards of the future carry the same shape as those of today, we predict theyll look, feel, and act remarkably differently.

The original article can be found at CardRatings.com:
Credit cards of the future: 4 exciting trends

March 16 (Reuters) – Following are long-term credit
ratings for Kazakhstans major banks as defined by international
ratings agencies Standard Poors (SP), Moodys and Fitch.
Outlook in parentheses: positive (pos), stable (stab),
neative (neg), developing (dev).
* updated today
SP MOODYS FITCH
Alliance Bank B- (stab) B3 (watch) B- (stab)
ATF-Bank N/A Ba3 (neg) BBB (stab)
BTA Bank Withdrawn Caa2 (dev) RD (stab)
Bank VTB Kazakhstan N/A N/A BBB-(stab)
CenterCredit B+ (stab) B1 (neg) B (stab)
Devt Bank of Kazakhstan BBB+(stab) Baa3 (stab) BBB-(pos)
Eurasian Bank B+ (stab) B1 (neg) Withdrawn
Eurasian Development Bank BBB (stab) A3 (stab) BBB (stab)
Eximbank N/A B3 (neg) N/A
Halyk Bank BB (stab) Ba2 (neg) BB- (stab)
HSBC Bank Kazakhstan BBB (stab) N/A N/A
Kaspi Bank N/A B1 (neg) B- (stab)
Kazinvestbank B- (neg) B3 (stab) N/A
Kazkommertsbank B+ (stab) Ba3 (neg) B- (stab)
Nurbank B- (stab) B3 (stab) N/A
Sberbank Kazakhstan N/A Ba2 (stab) BBB-(stab)
Temirbank B (stab) Withdrawn Withdrawn
Tsesna Bank B (neg) Withdrawn Withdrawn

GUIDE TO RATINGS
Standard Poors: Long Term Foreign Currency Corporate
Credit Rating
Moodys: Long Term Bank Deposits Rating
Fitch: Long Term Issuer Default Rating