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Financial Services Top Stories Of The Day – January 29, 2007 January 29, 2007

Posted by notapundit in Economic News.
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PRUDENTIAL TO SELL EGG TO CITIGROUP FOR $1.12B

Prudential agrees to sell Egg banking business to Citigroup for $1.12 billion. Prudential also agrees to outline terms for U.K. distribution agreement. Prudential would provide life and pensions products to Egg’s customer base for five years.

MERRILL LYNCH TO BUY FIRST REPUBLIC

Merrill Lynch agrees to buy private-banking and wealth-management firm for $1.8 billion as the brokerage increases its focus on rich clients. The $55 cash-and-stock bid is a 44% premium to First Republic’s closing price Friday. Merrill falls 2%.

LITTON SAYS STRUGGLING BORROWERS NEED HELP

The mortgage industry should do a better job of reaching out to financially stretched borrowers to prevent foreclosures, said Larry Litton Jr., who runs Litton Loan Servicing, one of the highest-rated mortgage servicers in the country.

PRIVATE-EQUITY BUYERS PROMISE CASH IF DEALS FALTER

Private-equity firms can’t walk away from a buyouts without paying a price any more, as target companies require suitors to pay a breakup fee if the deal falls through. Last year, 49% of going-private deals included reverse breakup fees.

VENTURE FIRMS CONTINUE TO SHRINK

Fewer venture-capital firms were active investors in U.S.-based companies last year than in 2005, as the slide that began after the industry’s 2000 heyday continues. Last year, 837 firms made at least one investment, down 6%.

FED SAVINGS PLAN: NOT RESPONSIBLE FOR ONLINE THEFT

Thrift Savings Plan, which holds billions of dollars in retirement savings for federal employees, is warning that it won’t be responsible for electronic thefts that have already stung about two dozen plan participants.

MOODY’S RATES OPERATIONS OF FORTRESS

Moody’s Investors Service rates two funds managed by an affiliate of Fortress Investment Group LLC, making another small step toward expanding its coverage of hedge funds.

MBIA TO PAY $75M IN REINSURANCE PROBE

Bond insurer will pay a combined $75 million to settle state and federal probes involving a 1998 reinsurance transaction the company used to offset losses from bonds it insures. Shares down 2%.

NASD FINES BOA $3M IN WYLY CASE

Bank of America Investment failed to comply with anti-money-laundering rules in accounts held by billionaire brothers Sam and Charles Wyly. NASD says it is the biggest against a financial institution for anti-money-laundering violations.

GOLDMAN SUSPENDS RATING ON HARRAH’S

Goldman Sachs suspends coverage of Harrah’s Entertainment to comply with policy for when it is ‘acting in an advisory capacity in a merger or strategic transaction and in certain other circumstances.’ Goldman analyst says suspension is temporary.

FANNIE MAE DEBT OUTSTANDING $774.4B AT DEC 31

Fannie Mae says it had $774.38 billion in total debt outstanding as of Dec. 31, 2006, compared with $766.24 billion a year earlier. Of total at end of ’06, $605.76 billion was long-term debt and $168.62 billion was short-term, according to filing with SEC.

GM TO USE EARNINGS DELAY TO SORT OUT RESCAP

GM decision to delay release of its 4Q report in part reflects toll that a volatile mortgage market has taken on its recently divested GMAC Financial Services lending unit. Volatility could prove costly for GM, according to some industry observers.

EX-PRUDENTIAL MANAGER WINS IN DEMOTION CASE

Former branch manager who claimed he was wrongfully demoted by Prudential when he was forced to be a broker is awarded $900,000 by NASD panel. Carl Busch, 60, says he was replaced by a much younger person at lower pay.

ACC IN TALKS WITH CITIGROUP, MORGAN ON MORTGAGE OPS

Citigroup and Morgan are in talks with privately held ACC Capital to acquire its mortgage-banking operations, according to people familiar with the situation. ACC hired investment bankers at JPMorgan to take offers for all or parts of the company.

OLD NATIONAL 4Q NET DOWN 10%

Old National Bancorp’s 4Q earnings fall to $17.5 million, or 27c a share, as revenue falls 10.4% to $93.6 million and net interest income falls 4.7% to $56 million. Analysts expected earnings of 28c a share.

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