Credit worries return, driving Wall St. lower

(Reuters) - Stocks had risen Monday and the first half of Tuesday's session, but the relief rally was cut short when American Home Mortgage Investment Corp. said it may have to liquidate assets. Shares of the mortgage lender fell 90 percent.




Investors remain sensitive to news about worsening lending conditions, which pummeled global equity markets last week. Credit market concerns pushed the S&P down 3.2 percent in July, its worst performance in three years.


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Corporate Bond Risk Soars on Concerns About Losses From Subprime Mortgages

(Bloomberg) -- The risk of owning U.S. corporate
bonds soared, erasing the biggest drop in at least three years,
as investors signaled that worries about widening losses from
subprime mortgages aren't over.

Credit-default swaps based on $10 million of bonds in the
benchmark CDX North American Investment-Grade Index jumped
$9,000 to about $81,000 at 4:03 p.m. in New York after dropping
earlier by as much as $9,000 to $63,000, according to Deutsche
Bank AG. During the past four days, the index, used to speculate
on corporate creditworthiness, has recorded its two worst and
two best days since it started trading more than three years
ago, according to data from Credit Suisse Group.


Read more at Bloomberg Bonds News

MGIC, Radian's C-Bass Subprime Venture Is in Talks to Secure More Funding

(Bloomberg) -- Credit-Based Asset Servicing and
Securitization LLC, a New York-based subprime loan company, said
it's in talks with investors to ensure it has sufficient funds
after turmoil in the market for high-risk borrowers.

Mortgage insurers MGIC Investment Corp. and Radian Group
Inc. yesterday said their C-Bass joint venture may be worthless,
requiring more than $1 billion in writedowns. MGIC, the largest
U.S. insurer of home loans, and Radian, the rival it's buying,
said ``unprecedented'' volatility in mid-July may have destroyed
their stakes, each valued at more than $500 million on June 30.


Read more at Bloomberg Bonds News

Corporate Bond Premiums Soar, Sales Canceled, As Investors Shun Risky Debt

(Bloomberg) -- Japanese corporate bond risk rose to
the highest in more than two years and debt sales faltered
globally as investors shunned all but the safest of debt.

Tyco Electronics Ltd. canceled a bond offering. DAE
Aviation Holdings Inc. scrapped plans for a loan. Credit-default
swaps on Goldman Sachs Group Inc. and Bear Stearns Cos. rose to
records on concerns investment banks will be stuck with high-
yield, high-risk debt that they are unable to sell. The rout
spread to indexes gauging the risk of owning everything from
bank loans to emerging market debt.


Read more at Bloomberg Bonds News

UPDATE 1-Bear Stearns seizes troubled hedge fund's assets

(Reuters) - In a statement on Thursday, Bear Stearns said it "assumed
possession of the assets" securing a $1.3 billion credit
facility provided to the High-Grade Structured Credit
Strategies Fund after the fund was unable to meet a margin
call.




The investment bank said it does not expect any "material
change" in financial exposure as a result of its action. It
said it will continue to pursue an "orderly liquidation" of
assets, and will be in a position to establish appropriate
hedges to protect against future price declines.


Read more at Reuters.com Bonds News

US clarifies anti-money laundering enforcement rules

(Reuters) - Banks and credit unions must have proper internal controls,
independent testing of anti-money laundering programs, a
program coordinator and a staff training program. A
cease-and-desist order could be issued if they fail to
establish and maintain a reasonably designed program or correct
a previous problem, regulators said.




The guidance was issued by the Office of the Comptroller of
the Currency, Federal Reserve, Federal Deposit Insurance
Corporation, Office of Thrift Supervision and the National
Credit Union Administration.


Read more at Reuters.com Government Filings News

JPMorgan Hires Credit Suisse's Miyaji for Japan Leveraged Finance Business

(Bloomberg) -- JPMorgan Chase & Co. hired Naoki
Miyaji from Credit Suisse Group to boost its leveraged finance
business in Japan, as buyout firms seek to fund more acquisitions
in the world's second-biggest economy.

Miyaji, based in Tokyo, will join the third-largest U.S.
bank next month as an executive director for leveraged finance
execution, Mika Watanabe, a Tokyo-based spokeswoman for JPMorgan,
said in response to queries from Bloomberg News. JPMorgan hired
Takasuke Sekine from Calyon, the investment banking unit of
Credit Agricole SA, as a vice president, in July, Watanabe said.


Read more at Bloomberg Bonds News

Lend Lease May be Tarket of a Leveraged Buyout, Credit Defaults Swaps Show

(Bloomberg) -- Lend Lease Corp., Australia's biggest
property developer, may be the target of a leveraged buyout,
according to traders betting on the creditworthiness of companies.

Speculation that private equity firms are poised to bid has
increased the risk of holding Lend Lease debt to the highest
since August 2005. Credit-default swaps are financial instruments
based on corporate bonds and loans used to speculate on a
company's ability to repay debt.


Read more at Bloomberg Bonds News

Argentina's Merval Index Falls on Tenaris Downgrade: Brazil's Vale Drops

(Bloomberg) -- Argentina's main stock index fell, led
by Tenaris SA, which has the heaviest weighting on the benchmark,
after Credit Suisse Group downgraded the shares on price concerns.

Tenaris, the world's biggest maker of seamless pipes for the
oil and gas industry, fell more than 2 percent for a second day,
after Credit Suisse cut the rating to ``underperform'' from
``neutral,'' citing a drilling slowdown in Canada. The stock gained
8.2 percent in the past two weeks.


Read more at Bloomberg Stocks News

CEVA plans $1.4 bln bonds for EGL purchase -lead

(Reuters) - Credit Suisse, Goldman Sachs, Morgan Stanley, Bear Stearns,
UBS, JP Morgan and ABN AMRO are managing the sale.




Read more at Reuters.com Bonds News

Treasuries Rise Most in Nearly a Month on Concern Over Subprime Mortgages

(Bloomberg) -- Treasuries advanced the most in
nearly a month after Standard & Poor's said it may cut credit
ratings on $12 billion of bonds backed by subprime mortgages,
sending investors to the safety of U.S. government debt.

Credit-default swaps, contracts used to speculate on a
company's ability to repay debt, rose to the highest premium in
more than a year in the U.S. and Europe. Stocks dropped on
concern the housing slump will hurt corporate earnings and slow
economic growth.


Read more at Bloomberg Bonds News

Rio Tinto said to be eyeing Alcan/Alcoa deal

(Reuters) - Rio has asked investment banks Credit Suisse and Deutsche Bank to advise it on a range of options, including a possible bid for Alcan, the sources said. A bid for Alcoa is also possible but less likely, they added.




Rio declined to comment, as did Credit Suisse. A spokesman for Deutsche Bank could not be reached.


Read more at Reuters.com Mergers News

UPDATE 1-Chinese online game firm Perfect World eyes US IPO

(Reuters) - The company said in a registration statement with the
Securities and Exchange Commission that Morgan Stanley, Credit
Suisse, CIBC World Markets and Susquehanna Financial Group,
LLLP were underwriting the IPO.




The preliminary filing did not state how many ADSs the
company intends to offer or their expected price.


Read more at Reuters.com Government Filings News

Japanese Stocks Climb; Toshiba Leads Gains on Growth Outlook, Weaker Yen

(Bloomberg) -- Japanese stocks climbed, paced by
electronics makers on expectations earnings will rise after
brokerages at home and in the U.S. issued reports touting their
growth potential and the yen weakened for a second day.

Toshiba Corp., the world's second-biggest maker of flash
memory chips, and Mitsubishi Electric Corp., which makes
everything from televisions to semiconductor production
equipment, led gains after Credit Suisse Group boosted its
recommendation on both companies to ``outperform.''


Read more at Bloomberg Stocks News

U.S. lawmaker: Bear Stearns woes won't cause meltdown

(Reuters) - Bear Stearns, the fifth-largest U.S. investment bank, said on Friday it would loan up to $3.2 billion to the High-Grade Structured Credit Strategies Fund, which suffered big losses on investments in the repackaged subprime mortgage loan market when homeowner defaults started rising.







Read more at Reuters.com Bonds News

U.S. monitors market liquidity after fund bailout

(Reuters) - The High-Grade Structured Credit Strategies Fund suffered
big losses after making bad bets in the repackaged subprime
mortgage loan market when homeowner defaults started rising.
Concerns have been raised about other funds that invested in
similar bonds linked to subprime mortgages, which are known as
a collateralized debt obligations .




"I couldn't say that it was the tip of the iceberg," Dugan
told reporters when asked if the Bear Stearns fund indicated
similar problems may be on the horizon.


Read more at Reuters.com Bonds News

Bear Stearns CFO says is overcollateralized on loan

(Reuters) - Bear Stearns is still trying to restructure the Bear Stearns High Grade Structured Credit Enhanced Leveraged Fund, and that could take several months, said Bear Chief Financial Officer Sam Molinaro.




But so far, all parties that have threatened to sell assets seized from the fund have not done so, Molinaro said. There are not additional Bear Stearns managed funds with similar market exposure, he added.


Read more at Reuters.com Bonds News

Bear Stearns Plans $3.2 Billion Rescue for Hedge Fund to Prevent Fire Sale

(Bloomberg) -- Bear Stearns Cos. plans to take on
$3.2 billion of loans to stop creditors from seizing assets of
one of its money-losing hedge funds in the biggest fund bailout
since 1998, people with knowledge of the proposal said.

The firm told lenders to the High-Grade Structured Credit
Strategies Fund yesterday that it would assume their loans, said
the people, who declined to be named because the plan is
confidential. The New York-based firm stepped in after Merrill
Lynch & Co. took securities that backed $850 million in credit
lines to two Bear Stearns funds and put them up for sale.
JPMorgan Chase & Co. and Lehman Brothers Holdings Inc. also
indicated they may take over collateral for loans they provided.


Read more at Bloomberg Bonds News

Japanese Stocks May Rise After Commodities Prices Rebound; Banks May Slide

(Bloomberg) -- Japanese stocks may rise after prices
for commodities including copper and oil rebounded. Metals
producers such as Sumitomo Metal Mining Co. and trading houses
including Mitsubishi Corp. may pace gains.

Lenders may decline after the Financial Services Agency
ordered Mitsubishi UFJ Financial Group Inc. to improve compliance
in its overseas operations and Credit Suisse Group lowered its
rating on shares of Mizuho Financial Group Inc.


Read more at Bloomberg Stocks News

New Zealand Dollar Gains to Six-Week High on Talk of Benchmark Rate Rise

(Bloomberg) -- New Zealand's dollar rose to a six-week
high amid speculation central bank Governor Alan Bollard could
raise interest rates this week, buoying demand from investors who
borrow at lower rates overseas.

New Zealand's currency has gained 8.5 percent the past three
months as the central bank increased borrowing costs in March and
April to a record 7.75 percent. There is a 31 percent chance of a
quarter-point rise in the benchmark rate at the June 7 review,
according to an index calculated by Credit Suisse.


Read more at Bloomberg Currencies News