BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[UBS helps Lakes Entertainment out of ARS mess -- sort of]]>http://www.bloggingstocks.com/2008/04/17/ubs-helps-lakes-entertainment-out-of-ars-mess-sort-of/http://www.bloggingstocks.com/2008/04/17/ubs-helps-lakes-entertainment-out-of-ars-mess-sort-of/http://www.bloggingstocks.com/2008/04/17/ubs-helps-lakes-entertainment-out-of-ars-mess-sort-of/#commentsFiled under:

The list of companies slapped by the auction rate securities debacle continues to grow. This morning, Lakes Entertainment (NASDAQ: LACO) issued a press release announcing an agreement with UBS AG (NYSE: UBS) that's worth quoting verbatim:

... effective April 11, 2008, it entered into a client agreement with UBS Financial Services ... for the purpose of borrowing and/or obtaining credit in a principal amount not to exceed $11.0 million ("Margin Account Agreement"). The Margin Account Agreement is secured by Lakes' auction rate securities ("ARS") held at UBS ... As previously announced, the types of ARS investments that the Company owns are backed by student loans, the majority of which are guaranteed by the U.S. government and all of which have credit ratings of AAA or Aaa. Historically, these ARS investments have been highly liquid, using an auction process that resets the applicable interest rate at predetermined intervals, typically every 28 days, to provide liquidity at par. However, as a result of the recent liquidity issues experienced in the global credit and capital markets, the auctions for all of the Company's ARS investments failed beginning in February 2008 when sell orders exceeded buy orders.

No 8-K detailing the terms of the margin account agreement has yet been released, so we don't know what interest rate they're paying for the credit. But it may be higher than the yield on the auction rate securities that UBS sold to them.

Here's what makes this situation a mess. UBS was recently subpoenaed by New York Attorney General Andrew Cuomo, seeking information about whether the firm misled investors in auction rate securities into believing that the investments were cash-like and more liquid than they have turned out to be.

Now that these companies don't have access to the cash they thought wouldn't be a problem to get at, UBS is helping them out: by letting them use the ARS as collateral to borrow from the bank that got them into this mess: presumably, with interest.

UBS helps Lakes Entertainment out of ARS mess -- sort of originally appeared on BloggingStocks on Thu, 17 Apr 2008 11:25:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>ARSauction rate securitiesAuctionRateSecuritiesLACOLakes EntertainmentLakesEntertainmentUBSThu, 17 Apr 2008 11:25:00 EST<![CDATA[Analyst initiations 5-30-07: Delta Air Lines, Dell initiated]]>http://www.bloggingstocks.com/2007/05/30/analyst-initiations-5-30-07-delta-air-lines-dell-initiated/http://www.bloggingstocks.com/2007/05/30/analyst-initiations-5-30-07-delta-air-lines-dell-initiated/http://www.bloggingstocks.com/2007/05/30/analyst-initiations-5-30-07-delta-air-lines-dell-initiated/#commentsFiled under: , , ,

MOST NOTEWORTHY: PennantPark (PNNT), Delta Air Lines (DAL) and several insurance companies were today's noteworthy initiations:
  • PennantPark Investment Corp. (NASDAQ: PNNT) was initiated with a Buy rating and $17 target at Jefferies. The finds shares compelling given the potential dividend growth and book multiple expansion. PennantPark was also initiated at Keefe Bruyette with an Outperform rating and $18 target, at Banc of America with a Buy rating and $16 target and at Friedman Billings with an Outperform rating and $17 target.
  • Delta Air Lines Inc. (NYSE: DAL) was initiated at Bear Stearns with a Peer Perform rating and at Cathay Financial with an Outperform rating.
  • Banc of America initiated RenaissanceRe Holdings Ltd. (NYSE: RNR) with a Buy rating and Montpelier Re Holdings Ltd. (NYSE: MRH) and IPC Holdings Ltd. (NASDAQ: IPCR) with Neutral ratings.
OTHER INITIATIONS:
Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Analyst initiations 5-30-07: Delta Air Lines, Dell initiated originally appeared on BloggingStocks on Wed, 30 May 2007 11:38:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>avery dennisonAveryDennisonavydaldelldelta air linesDeltaAirLinesfllfull house resortsFullHouseResortsipcipcrlacolake entertainmentLakeEntertainmentmcrimntgmonarch casinoMonarchCasinomontpelier reMontpelierRemrhmtr gamingMtrGamingpennantparkpnntrenaissancere rnrRenaissancereRnrsteel dynamicsSteelDynamicsstldWed, 30 May 2007 11:38:00 EST