Petroleum Geo-Services ASA: Second Quarter and First Half 2010 Results

July 30, 2010 By Leave a Comment

July 29, 2010: OSLO, NORWAY – Petroleum Geo-Services ASA (“PGS” or the “Company”)
reported an EBITDA of $71.4 million (33 percent margin) in Q2 2010. The results were
impacted by significant investments in vessel upgrades and repositioning of vessels, as
earlier indicated. The upgrades further strengthen PGS’ fleet as the most cost effective
in the industry.

§ Group performance: Q2 2010 revenues were $214.9 million, with a corresponding EBIT of
$5.3 million, compared to revenues of $294.3 million in Q2 2009 and an EBIT of $32.9
million.

§ Marine: Q2 2010 revenues were lower compared to the same period last year, primarily
driven by more time spent steaming and at yard, lower prices for Marine contract work
with 2009 having benefited from activity priced before the credit crunch, and lower
MultiClient pre-funding revenues. Industry capacity additions scheduled for 2010
continue to put pressure on conventional streamer pricing.

§ Most of the 2010 GeoStreamer capacity sold: Strong customer interest for GeoStreamer
continues. Ramform Valiant was equipped with GeoStreamer in June and Ramform Explorer
completed the same upgrade in July.

§ GeoStreamer price uplifts: Relative pricing differentiation for GeoStreamer work
continues to improve with margins of more than 1000 basis points above conventional
streamer margins.

§ Order book increasing: Order book increased by approximately $90 million from Q1 2010
and total order book is now $499 million.

§ Two break-through contracts for OptoSeis: PGS has signed an agreement with Petrobras
to install a fiber-optic system at the Jubarte field, and a collaboration agreement with
Shell to develop an onshore fiber-optic exploration and reservoir monitoring system.

§ More flexible credit facility: The Company amended its revolving credit and Term Loan
B facility in May 2010 to increase financial flexibility.

§ Negative net financial items: Foreign exchange fluctuations and amendment and
redemption of credit facilities resulted in a cost of $18.2 million in Q2 2010.

§ Organizational changes implemented: Following sale of the Onshore business PGS
implemented its new organizational structure.

§ EBITDA guidance maintained: The Company maintains its full year EBITDA guidance of
$450 million, supported by GeoStreamer success and increased MultiClient pre-funding
revenues in the second half, offset by a weak contract market for conventional streamers
and some MultiClient late sales uncertainty.

Jon Erik Reinhardsen, Chief Executive Officer and President of PGS, commented:

“The upgrade of Ramform Explorer to become one of the most efficient vessels in the
industry will together with the GeoStreamer upgrade of Ramform Valiant and delivery of
the new PGS Apollo pave the way for increased efficiency and reduced exposure to the
industry cycles. The second quarter was impacted by repositioning of vessels and
significant investments in vessel and GeoStreamer upgrades. New industry capacity will
continue to put pressure on pricing in the second half, but we remain on track to meet
our current full year EBITDA guidance.”

Key Financial Figures Quarter ended Six months ended June 30, Year ended December 31, 2009
(In millions of dollars, except per share data) June 30, Audited 1)
2010 2009 2010 2009
Unaudited Unaudited Unaudited Unaudited
Revenues from continuing operations $ 214.9 $ 294.3 $ 474.3 $ 685.1 $ 1,350.2
Adjusted EBITDA (as defined) 71.4 154.1 170.7 360.5 672.1
EBIT excluding special items 2) 5.3 81.2 40.1 236.3 386.9
EBIT 5.3 32.9 39.6 137.5 233.3
Income (loss) before income tax expense (27.4) 40.2 (12.4) 129.8 228.1
Net income (loss) to equity holders (22.3) 41.0 (6.1) 95.2 165.8
Basic earnings per share ($ per share) (0.11) 0.22 (0.03) 0.53 0.88
Diluted earnings per share ($ per share) (0.11) 0.22 (0.03) 0.53 0.88
Net cash provided by operating activities 63.8 208.1 179.3 353.5 676.1
Cash investment in MultiClient library 51.7 56.7 103.8 101.6 183.1
Capital expenditures 52.7 56.8 100.6 150.5 231.2
Total assets (period end) 2,690.4 3,132.4 2,690.4 3,132.4 2,929.4
Cash and cash equivalents (period end) 159.8 168.1 159.8 168.1 126.0
Net interest bearing debt (period end) $ 616.3 $ 962.1 $ 616.3 $ 962.1 $ 774.0

1) Financial information for the full year 2009 is derived from the audited financial
statements as presented in the 2009 Annual Report.
2) Impairment charges of $0.5 million in Q1 2010 and $153.6 million for the full year
2009.

Complete Q2 2010 earnings release can be downloaded at www.newsweb.no
http://www.newsweb.no/ or www.pgs.com http://www.pgs.com/

FOR DETAILS, CONTACT:
Tore Langballe, SVP Corporate Communications

Phone: +47 67 51 43 75

Mobile: +47 90 77 78 41

Bård Stenberg, Investor Relations Manager

Phone: +47 67 51 43 16

Mobile: +47 99 24 52 35

US Investor Services

Phone: +1 281 509 8712

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian
Securities Trading Act)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

India’s cbank tightens monetary policy more than expected

July 28, 2010 By Leave a Comment

July 27 (Reuters) – India’s central bank raised interest rates more forcefully than expected on Tuesday in the face of inflation that has held stubbornly above 10 percent for the past five months.

The RBI lifted the repo rate, at which it lends to banks, by 25 basis points to 5.75 percent, which was in line with expectations, but raised the reverse repo rate, at which it absorbs excess cash from the system, by 50 basis points to 4.50 percent.

Economists and investors had expected a 25 basis point increase in the reverse repo rate.

As expected, it left the cash reserve ratio (CRR) for banks at 6.00 percent, amid ongoing tight liquidity in the banking system.

Inflation in India emerged last year in the wake of a poor monsoon that drove up food prices but has spread broadly throughout the economy, spawning protest against a government whose voter base is predominantly poor and rural.

New Delhi’s decision to increase fuel prices is expected to add nearly a percentage point to wholesale price index (WPI) inflation starting in July and led the opposition to call a one-day nationwide strike early this month.

The government is counting on normal summer monsoon rains to results in better crop yields and ease pressure on food prices, and has said inflation should decline to 6 percent by December, a figure private economists put closer to 8 percent. (Reporting by Tony Munroe)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

B/E Aerospace Second Quarter Results Exceed Expectations; EPS of $0.39 Up 11% (Exclusive of $0.02 Non-Cash Debt Prepayment Charge); 2010 Full Year Guidance Increased

July 28, 2010 By Leave a Comment

WELLINGTON, Fla.–(Business Wire)–
B/E Aerospace (Nasdaq: BEAV), the world`s leading manufacturer of aircraft cabin
interior products and the world`s leading distributor of aerospace fasteners and
consumables, today announced second quarter 2010 financial results.

SECOND QUARTER 2010 HIGHLIGHTS VERSUS SECOND QUARTER PRIOR YEAR

* Revenues of $483.9 million increased 1.9 percent.
* Operating earnings of $78.8 million increased 6.6 percent. Operating margin of
16.3 percent expanded 70 basis points.
* Earnings before income taxes, exclusive of the $2.5 million non-cash debt
prepayment charge, increased 14.6 percent.
* Net earnings and earnings per diluted share, exclusive of a $2.5 million or
$0.02 per share non-cash debt prepayment charge, were $39.0 million, or $0.39
per share, and increased 12.4 percent and 11.4 percent, respectively.
* Free cash flow was $46.5 million and represented a free cash flow conversion
ratio of 125 percent.
* The second quarter book-to-bill ratio was 1.1 to 1 and was in excess of one
for the third consecutive quarter.
* Full-year 2010 earnings per diluted share guidance raised by $0.05 per share
to approximately $1.50 per share (exclusive of non-cash debt prepayment
charge).

SECOND QUARTER CONSOLIDATED RESULTS

Second quarter 2010 revenues of $483.9 million increased $9.1 million, or 1.9
percent, as compared with the same period of the prior year. The increase in
consolidated revenues was due to a higher level of commercial aircraft segment
revenues.

Second quarter 2010 operating earnings of $78.8 million increased 6.6 percent on
the aforementioned 1.9 percent increase in revenues. Operating margin in the
current quarterly period was 16.3 percent and expanded by 70 basis points as
compared with the prior year period.

Second quarter 2010 earnings before income taxes, exclusive of the $2.5 million
non-cash debt prepayment charge, were $58.9 million and increased 14.6 percent
as compared with the prior year period.

Second quarter 2010 net earnings, exclusive of non-cash debt prepayment charge,
were $39.0 million, or $0.39 per diluted share, and increased 12.4 percent and
11.4 percent, respectively, as compared with the prior year period. During the
second quarter of 2010 the company prepaid $75 million of long-term debt
resulting in a $2.5 million non-cash debt prepayment charge (approximately $0.02
per diluted share). Second quarter 2010 earnings per diluted share, including
the non-cash debt prepayment charge, were $0.37.

Second quarter 2010 free cash flow was $46.5 million, representing a free cash
flow conversion ratio of 125 percent.

Commenting on the company`s recent performance, Amin J. Khoury, Chairman and
Chief Executive Officer of B/E Aerospace said, “Our second quarter earnings
growth was driven by significant margin expansion at both our consumables
management segment (CMS) and our commercial aircraft segment (CAS). Our CMS
operating margin expanded by 160 basis points to 19.8 percent while our CAS
operating margin expanded by 140 basis points to 15.5 percent. Overall,
operating earnings increased 7 percent on a 2 percent increase in revenues.
Exclusive of a $2.5 million or $0.02 per share non-cash debt prepayment charge,
pretax earnings, net earnings and earnings per share increased 14.6 percent,
12.4 percent and 11.4 percent, respectively. Our free cash flow conversion ratio
was 125 percent, we prepaid $75 million of long-term debt and for the third
consecutive quarter our backlog grew. This, together with an expected continued
increase in global passenger traffic, underscores our expectation for stronger
operating results in 2010 and significant improvements thereafter. As a result,
we are raising our 2010 EPS guidance by $0.05 per diluted share to approximately
$1.50 per diluted share (exclusive of the non-cash debt prepayment charge).”

Earnings before income taxes exclusive of non-cash debt prepayment charge, net
earnings exclusive of debt prepayment charge, adjusted earnings per diluted
share exclusive of debt prepayment charge, free cash flow and free cash flow
conversion ratio are non-GAAP financial measures. For more information see
“Reconciliation of Non-GAAP Financial Measures.”

SECOND QUARTER SEGMENT RESULTS

The following is a tabular summary and commentary of revenues and operating
earnings by segment:

REVENUES
Three Months Ended June 30,
($ in millions)
2010 2009 % Change
Consumables management $ 193.1 $ 196.6 -1.8 %
Commercial aircraft 236.4 223.9 5.6 %
Business jet 54.4 54.3 0.2 %
Total $ 483.9 $ 474.8 1.9 %

OPERATING EARNINGS
Three Months Ended June 30,
($ in millions)
2010 2009 % Change
Consumables management $ 38.2 $ 35.8 6.7 %
Commercial aircraft 36.6 31.6 15.8 %
Business jet 4.0 6.5 -38.5 %
Total $ 78.8 $ 73.9 6.6 %

Second quarter 2010 consumables management segment (CMS) revenues of $193.1
million were 1.8 percent lower as compared with the second quarter of 2009.
Sequentially, second quarter 2010 CMS revenues increased 3.8 percent as compared
with the first quarter of 2010. Second quarter 2010 CMS operating earnings of
$38.2 million increased 6.7 percent and operating margin of 19.8 percent
expanded 160 basis points as compared with the second quarter of 2009.

Second quarter 2010 commercial aircraft segment (CAS) revenues of $236.4 million
increased 5.6 percent as compared with the prior year period. CAS spares
revenues in the second quarter of 2010 increased at a double digit rate as
compared with the second quarter of 2009. CAS second quarter 2010 operating
earnings were $36.6 million, or 15.5 percent of revenues, an increase of 15.8
percent as compared with the prior year. Second quarter 2010 operating margin
expanded 140 basis points as compared with the prior year period primarily due
to a higher level of spares revenues and ongoing operational efficiencies.

Second quarter 2010 business jet segment revenues of $54.4 million were flat as
compared with the prior year period. Operating earnings of $4.0 million
decreased $2.5 million or 38.5 percent as compared with the prior year period
primarily as a result of an unfavorable mix of product revenues in the current
year period.

SIX-MONTH CONSOLIDATED RESULTS

For the six months ended June 30, 2010, revenues of $947.4 million declined 5.1
percent as compared with the prior year period as a result of lower revenues in
the first quarter of 2010 as compared with the first quarter of 2009.

For the six months ended June 30, 2010, operating earnings of $150.8 million
declined 2.5 percent as compared with the prior year period as a result of 5.1
percent lower revenues in the current period. Operating margin in the current
period of 15.9 percent expanded 40 basis points as compared to the prior year
period.

For the six months ended June 30, 2010, net earnings were $71.1 million, or
$0.71 per diluted share, as compared with $72.6 million, or $0.73 per diluted
share, in the prior year period. During the second quarter of 2010 the company
prepaid $75 million of long-term debt resulting in a debt prepayment charge of
approximately $0.02 per diluted share. Exclusive of the charge, earnings per
diluted share for the 2010 period were $0.72 per diluted share.

SIX-MONTH SEGMENT RESULTS

The following is a tabular summary and commentary of revenues and operating
earnings by segment:

REVENUES
Six Months Ended June 30,
($ in millions)
2010 2009 % Change
Consumables management $ 379.2 $ 436.0 -13.0 %
Commercial aircraft 466.5 449.8 3.7 %
Business jet 101.7 112.7 -9.8 %
Total $ 947.4 $ 998.5 -5.1 %

OPERATING EARNINGS
Six Months Ended June 30,
($ in millions)
2010 2009 % Change
Consumables management $ 75.0 $ 83.2 -9.9 %
Commercial aircraft 70.4 60.1 17.1 %
Business jet 5.4 11.3 -52.2 %
Total $ 150.8 $ 154.6 -2.5 %

For the six months ended June 30, 2010, CMS revenues of $379.2 million declined
13.0 percent as compared with the prior year period, primarily as a result of
lower revenues in the first quarter of 2010 as compared with the first quarter
of 2009. CMS bookings in the first half of 2010 increased more than 10 percent
sequentially as compared with the second half of 2009. First half 2010 operating
earnings declined 9.9 percent as compared with the prior year period. The first
half 2010 CMS operating margin of 19.8 percent increased 70 basis points as
compared with the prior year period primarily due to ongoing operational
efficiencies. CMS operating earnings in the first half of 2010 increased 10.6
percent on a 4.7 percent increase in revenues sequentially as compared with the
second half of 2009.

For the six months ended June 30, 2010, CAS revenues of $466.5 million increased
3.7 percent as compared with the prior year period. CAS spares revenues and
bookings in the first half of 2010 increased at a healthy double digit rate
sequentially as compared with the second half of 2009. First half 2010 CAS
operating earnings were $70.4 million, or 15.1 percent of revenues, an increase
of 17.1 percent as compared with the prior year period. Current period operating
margin expanded 170 basis points as compared with the prior year period
primarily as a result of a higher level of spares revenues and ongoing
operational efficiencies.

For the six months ended June 30, 2010, business jet segment revenues of $101.7
million declined 9.8 percent and operating earnings of $5.4 million decreased
$5.9 million or 52.2 percent as compared with the prior year period, as a result
of lower revenues, an unfavorable mix of product revenues and the negative
impact of reduced operating leverage in the current year period.

LIQUIDITY AND BALANCE SHEET METRICS

Second quarter 2010 free cash flow of $46.5 million represents a free cash flow
conversion ratio of 125 percent. During the second quarter of 2010 the company
prepaid $75 million of long-term debt and has prepaid $175 million of long-term
debt since the fourth quarter of 2009. Net debt as of June 30, 2010 was $819.5
million and the company`s net debt-to-net capital ratio was 35.5 percent, an
improvement of 610 basis points since June 30, 2009. The company has no
borrowings outstanding on its $350 million revolving credit facility and no debt
maturities until 2014.

BOOKINGS

Bookings during the second quarter of 2010 were strong at approximately $550
million reflecting solid bookings with respect to both new aircraft and
aftermarket programs. The book-to-bill ratio was 1.1 to 1 for the quarter, and
for the third consecutive quarter represented a book-to-bill ratio in excess of
one. Backlog at the end of the quarter was approximately $2.8 billion, an
increase of approximately 4 percent as compared with the company`s June 30, 2009
backlog and supplier furnished equipment programs awarded expanded to $2.62
billion. As a result, total backlog, booked and unbooked expanded to a record
$5.4 billion.

OUTLOOK

Commenting on the company`s outlook, Mr. Khoury stated, “As a result of our
better than expected performance during the first half of 2010, improving global
air traffic, and improving airline yields, we are raising our 2010 full year
earnings per share guidance by $0.05 per diluted share to approximately $1.50
per diluted share (exclusive of non-cash debt prepayment charge). 2010 revenues
are now expected to be about equal to 2009 revenues of approximately $1.94
billion. In addition, we expect to generate free cash flow in excess of 100
percent of net earnings for the full year 2010. Importantly, based upon our
expectation of a continued expansion in orders and backlog and a continued
recovery in our commercial aircraft segment spares and consumables businesses
during 2010 as well as higher levels of wide-body aircraft deliveries in 2011,
we expect a significant increase in revenues, earnings and cash flows beginning
in 2011.”

This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such forward-looking statements include, but are not
limited to, B/E Aerospace`s financial guidance and industry expectations for the
next several years and the expected benefits from the HCS acquisition. Such
forward-looking statements involve risks and uncertainties. B/E Aerospace`s
actual experience and results may differ materially from the experience and
results anticipated in such statements. Factors that might cause such a
difference include changes in market and industry conditions and those discussed
in B/E Aerospace`s filings with the Securities and Exchange Commission, which
include its Proxy Statement, Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K. For more information, see the section
entitled “Forward-Looking Statements” contained in B/E Aerospace`s Annual Report
on Form 10-K and in other filings. The forward-looking statements included in
this news release are made only as of the date of this news release and, except
as required by federal securities laws, we do not intend to publicly update or
revise any forward-looking statements to reflect subsequent events or
circumstances.

About B/E Aerospace

B/E Aerospace is the world`s leading manufacturer of aircraft cabin interior
products and the world`s leading distributor of aerospace fasteners and
consumables. B/E Aerospace designs, develops and manufactures a broad range of
products for both commercial aircraft and business jets. B/E Aerospace
manufactured products include aircraft cabin seating, lighting, oxygen, and food
and beverage preparation and storage equipment. The company also provides cabin
interior design, reconfiguration and passenger-to-freighter conversion services.
Products for the existing aircraft fleet – the aftermarket – generate
approximately 50 percent of sales. B/E Aerospace sells and supports its products
through its own global direct sales and product support organization. For more
information, visit the B/E Aerospace website at www.beaerospace.com.

BE AEROSPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

(In Millions, Except Per Share Data)

THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30, June 30, June 30,
2010 2009 2010 2009

Revenues $ 483.9 $ 474.8 $ 947.4 $ 998.5
Cost of sales 309.6 309.5 605.3 656.5
Selling, general and administrative 70.0 68.1 138.7 140.1
Research, development and engineering 25.5 23.3 52.6 47.3

Operating earnings 78.8 73.9 150.8 154.6

Operating earnings, as a percentage of revenues 16.3 % 15.6 % 15.9 % 15.5 %

Interest expense, net 19.9 22.5 40.7 45.0
Debt prepayment costs 2.5 — 2.5 —

Earnings before income taxes 56.4 51.4 107.6 109.6

Income taxes 19.1 16.7 36.5 37.0

Net earnings $ 37.3 $ 34.7 $ 71.1 $ 72.6

Net earnings per common share:

Basic $ 0.37 $ 0.35 $ 0.71 $ 0.74
Diluted $ 0.37 $ 0.35 $ 0.71 $ 0.73

Weighted average common shares:

Basic 99.5 98.3 99.5 98.3
Diluted 100.7 99.1 100.6 98.9

BE AEROSPACE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In Millions)

June 30, December 31,
2010 2009

ASSETS

Current assets:
Cash and cash equivalents $ 123.9 $ 120.1
Accounts receivable, net 251.2 222.5
Inventories, net 1,259.9 1,247.4
Deferred income taxes, net 0.4 12.1
Other current assets 23.4 20.5
Total current assets 1,658.8 1,622.6
Long-term assets 1,177.1 1,217.5
$ 2,835.9 $ 2,840.1

LIABILITIES AND STOCKHOLDERS` EQUITY

Total current liabilities $ 365.8 $ 335.7
Total long-term liabilities 980.6 1,056.9
Total stockholders’ equity 1,489.5 1,447.5
$ 2,835.9 $ 2,840.1

BE AEROSPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In Millions)

SIX MONTHS ENDED
June 30, June 30,
2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 71.1 $ 72.6
Adjustments to reconcile net earnings to net cash flows provided by
(used in) operating activities:

Depreciation and amortization 25.0 24.1
Provision for doubtful accounts 1.0 0.6
Non-cash compensation 13.9 11.5
Debt prepayment costs 2.5 —
Loss on disposal of property and equipment 0.5 1.8
Tax benefits realized from prior exercises of employee stock options (5.4 ) —
Deferred income taxes 24.7 26.4
Changes in operating assets and liabilities:
Accounts receivable (36.0 ) 24.3
Inventories (28.8 ) (130.6 )
Other current assets and other assets 2.4 20.9
Payables, accruals and other liabilities 25.4 (57.1 )
Net cash provided by (used in) operating activities 96.3 (5.5 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (17.0 ) (15.5 )
Other, net 0.1 (0.4 )
Net cash used in investing activities (16.9 ) (15.9 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock issued 1.4 1.6
Tax benefits realized from prior exercises of employee stock options 5.4 —
Principal payments on long-term debt (75.2 ) (3.2 )
Net cash used in financing activities (68.4 ) (1.6 )

Effect of foreign exchange rate changes on cash and cash equivalents (7.2 ) 1.3

Net increase (decrease) in cash and cash equivalents 3.8 (21.7 )

Cash and cash equivalents, beginning of period 120.1 168.1

Cash and cash equivalents, end of period $ 123.9 $ 146.4

BE AEROSPACE, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

This release includes the financial measures “earnings before income taxes
exclusive of the non-cash debt prepayment charge,” “net earnings exclusive of
the non-cash debt prepayment charge,” “net earnings per diluted share exclusive
of the non-cash debt prepayment charge,” “free cash flow” and “free cash flow
conversion ratio,” which are “non-GAAP financial measures” as defined in
Regulation G of the Securities and Exchange Act of 1934.

The company defines “earnings before taxes exclusive of the non-cash debt
prepayment charge,” “net earnings exclusive of the non-cash debt prepayment
charge,” and “net earnings per diluted share exclusive of the non-cash debt
prepayment charge,” as earnings before taxes, net earnings or net earnings per
diluted share reported under GAAP, as the case may be, less the amount of the
charge associated with the company`s prepayment of $75 million of its long-term
debt. The company believes these financial measures are relevant and useful for
investors because it allows investors to have a better understanding of the
company`s operating performance that were not affected by the debt prepayment
charge. These financial measures should not be viewed as a substitute for or
superior to earnings before taxes, net earnings and net earnings per diluted
share, respectively, which are the most comparable GAAP measures and as measures
of the company`s operating performance. The debt prepayment charge, which was a
non-cash charge,in the second quarter of 2010 was $2.5 million, or $0.02 per
share.

The company defines “free cash flow” as net cash flows provided by operating
activities, plus tax benefits from the exercise of stock options, less capital
expenditures. The company uses free cash flow to provide investors with an
additional perspective on the company’s cash flow provided by operating
activities after taking into account reinvestments. Free cash flow does not take
into account debt service requirements and therefore does not reflect an amount
available for discretionary purposes. The company defines “free cash flow
conversion ratio” as free cash flow expressed as a percentage of the company`s
net earnings. The company uses free cash flow conversion ratio to provide
investors with a measurement of its ability to convert earnings into free cash
flow.

Pursuant to the requirements of Regulation G, the company is providing the
following tables which reconcile the non-GAAP financial measures described above
to the most comparable GAAP measure.

RECONCILIATION OF EARNINGS BEFORE TAXES TO EARNINGS BEFORE TAXES
EXCLUSIVE OF NON-CASH DEBT PREPAYMENT CHARGE
(In Millions, Except Per Share Data)

Three Months Ended
June 30,
2010
Earnings before taxes, as reported $ 56.4
Debt prepayment costs 2.5
Earnings before taxes exclusive of non-cash debt prepayment $ 58.9

RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS
EXCLUSIVE OF NON-CASH DEBT PREPAYMENT CHARGE
(In Millions, Except Per Share Data)

Three Months Ended Six Months Ended
June 30, June 30,
2010 2010
Net earnings, as reported $ 37.3 $ 71.1
Debt prepayment costs 2.5 2.5
Income taxes on debt extinguishment costs (0.8 ) (0.8 )
(33.9% effective tax rate)
Net earnings exclusive of non-cash debt prepayment $ 39.0 $ 72.8

Net earnings per diluted share
exclusive of non-cash debt prepayment $ 0.39 $ 0.72

Net earnings per diluted share, as reported $ 0.37 $ 0.71

RECONCILIATION OF NET CASH FLOW FROM OPERATIONS TO FREE CASH FLOW
(In Millions)

Three Months Ended
June 30,
2010
Net cash flow provided by operating activities $ 48.8
Add back: tax benefits realized from prior exercises of employee stock options 5.4
Less: capital expenditures (7.7 )
Free cash flow $ 46.5

B/E Aerospace
Greg Powell, Vice President, Investor Relations
561-791-5000 ext. 1450

Copyright Business Wire 2010

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Indian shares flat; cbank review in focus

July 28, 2010 By Leave a Comment

MUMBAI, July 27 (Reuters) – Indian shares were trading
barely changed on Tuesday as investors were cautious ahead of
the central bank’s quarterly policy review announcement
expected at 0600 GMT.

A Reuters poll last week showed majority of economists
expect the Reserve Bank of India (RBI) to raise interest rates
by 25 basis points (bps) and tighten policy further in coming
quarters. [ID:nBMA008035]

By 10:47 a.m. (0517 GMT), the 30-share BSE index was
trading up 0.02 percent at 18,023.02 points, with two-thirds of
its components advancing.

“People are just nervous before the (central bank) policy,”
said Arun Kejriwal, director of research firm KRIS.

Kejriwal expects a 25 bps hike in key interest rates and a
hawkish stance from the central bank.

“Monsoon is improving which is good. But looking at the
recent earnings, we are seeing input cost pressures. For banks,
asset quality is getting to be a worry.”

Total rainfall since June 1, the start of the vital,
four-month monsoon season was 16 percent below normal on July
19, but the seasonal deficit narrowed to 7 percent on Monday,
data from the India Meteorological Department showed.
[ID:nSGE66P0IS]

The benchmark index is up 3.2 percent year to date.

Foreign funds have poured in $9 billion in Indian equities
so far in 2010, a portion of which was invested in primary
market.

Financials were mixed ahead of the central bank policy
announcement.

Leading lender State Bank of India (SBI.BO) rose 0.1
percent while rival ICICI Bank (ICBK.BO) dropped 1.3 percent.

Mortgage lender Housing Development Finance Corp (HDFC.BO)
was trading 0.1 percent lower.

Energy giant Reliance Industries (RELI.BO) led the gains
ahead of its quarterly earnings announcement.

Reliance Industries, which has the highest weight on the
main index, was up 0.5 percent. According to a Reuters poll,
Reliance may report a net profit of 48.3 billion rupees.
[ID:nSGE66M09E]

Top power producer NTPC (NTPC.BO) declined 0.9 percent as
it reported a 16-percent drop in its June quarter net profit,
after market hours on Monday. [ID:nBMA008082]

Top engineering and construction firm Larsen & Toubro
(LART.BO) was down 2.6 percent, as it details its June-quarter
earnings later in the day, while Hindustan Unilever HUL.BO,
which also declares its quarterly numbers, firmed 0.9 percent.

In the broader market, gainers led losers in a ratio of
1.1:1 in a volume of 82 million shares.

The 50-share NSE index was barely changed at
5,415.70 points.

STOCKS ON THE MOVE

* Software firm Tech Mahindra (TEML.BO) was down 3.4
percent at 712.50 rupees after it reported a 9.1-percent rise
in its June-quarter net profit which did not meet expectations,
dealers said. [ID:nBMA008081]

JPMorgan downgraded the stock to “neutral” from
“overweight”, while BNP Paribas cut its rating to “hold” from
“buy”.

* Mahindra Holidays (MAHH.BO) dropped 4.9 percent to 518.55
rupees, after the hospitality services provider said its June-
quarter net profit declined 61 percent.[ID:nBMB011070]

* Motorcycle maker Hero Honda (HROH.BO) bounced back 3.1
percent to 1,868.70 rupees, after it had dropped 7.5 percent in
the previous session.

MAIN TOP THREE BY VOLUME

* IFCI (IFCI.BO) on 2.8 million shares

* Shree Ashtavinayak (SACV.BO) on 1.4 million shares

* Resurgere Mines (RESU.BO) on 1.1 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee report
[INR/]
* Indian bond report
[IN/]
* Euro stalls near 2-month peak, meets resistance
[FRX/]
* Oil steady near $79; U.S. inventories seen mixed
[O/R]
* Asian stocks rise on US data, euro inches up
[MKTS/GLOB]
* Wall St gains on FedEx outlook, new home sales data
[.N]
* For closing rates of Indian ADRs
INADR
(Reporting by Ami Shah; editing by Malini Menon)

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UPDATE 1-Abu Dhabi’s Waha Q2 profit plunges, share rally stalls

July 26, 2010 By Leave a Comment

DUBAI, July 25 (Reuters) – Abu Dhabi-listed Waha Capital WAHA.AD, whose shares had surged ahead of a $1.5 billion bond issue, reported a 90-percent decline in second-quarter profit on Sunday as earnings in invested firms slumped.

Waha, which is involved in real estate and leasing for the oil and aviation sectors including deals for military planes for the UAE Armed Forces, reported a profit of 5.99 million dirhams ($1.63 million), down from 54.5 million a year earlier.

Profits from equity accounted investees, a reference to where Waha holds a significant stake in others, fell by more than half to 20.67 million dirhams.

The stock was down 3 percent at 0852 GMT, having been up as much as 6 percent in early trade.

It had gained more than 19 percent in the previous three sessions since early price guidance indicated a 10-year benchmark bond for unit Waha Aerospace would be priced at 225 basis points over 5-year U.S. Treasuries, with the issue expected to raise about $1.5 billion. [ID:nLDE66J0PJ]

The Abu Dhabi governement holds a 15 percent stake in Waha, according to Reuters data, and has unconditionally backed the bond.

“The headline (profit) number is quite weak, but the stock has rallied on the back of its bond issue, which is significant fundraising for the company,” said Ali Khan, managing director and head of brokerage at Arqaam Capital.

“To get a 10-year bond away at this price is not bad.”

The firm’s revenues for the three months ending June 30 were 76.7 million dirhams, down 20 percent.

(Editing by Jason Neely)

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QTC issues A$4.4 bln in 2011 & 2012 bond exchange

July 24, 2010 By Leave a Comment

(For the latest Australia and New Zealand bond news, double
click on [AU/CRD] and then double click on the ID number)

SYDNEY, July 23 (Reuters) – Queensland Treasury Corp, the
state’s funding arm, has issued a total of A$4.4 billion ($3.93
billion) in new 2011 and 2012 bonds in exchange for
government-guaranteed bonds, sole lead UBS said on Friday.

The borrower issued A$2.7 billion in June 2011 bonds with a
yield 14 basis points above the QTC 2011 Australia-guaranteed
line and A$1.7 billion in April 2012 bonds with a yield 15 bps
above the QTC’s 2012 Australia-guaranteed bonds.

(Reporting by Cecile Lefort)

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JGB 10-yr yield hits 7-yr low after Bernanke, auction

July 23, 2010 By Leave a Comment

TOKYO, July 22 (Reuters) – Japanese government bonds rallied on Friday, with the benchmark 10-year yield hitting its lowest in seven years, after testimony by Fed Chairman Ben Bernanke suggested low interest rates would remain in place for a long time.

Bonds were given a further boost after a sale of 20-year debt attracted strong demand.

The 10-year yield JP10YTN=JBTC dropped 3 basis points to 1.055 percent after brushing 1.045 percent, its lowest since August 2003.

September 10-year futures 2JGBv1 climbed 0.17 point to 141.87 after hitting 142.08, their highest in seven years.

“Bernanke’s testimony represented a new chapter for the bond market, as it suggested the Fed is bracing for tougher economic conditions than it anticipated,” said a fund manager at a domestic investment firm.

“Any resulting easing by the Fed would come at a time when central banks in Europe and Japan are strengthening their easing rhetoric. This will add to flattening pressure on the yield curve, possibly taking the (JGB) 10-year yield below 1 percent.”

Bernanke, delivering the Fed’s semiannual report to Congress on monetary policy on Wednesday, said the economy faced “unusually uncertain” prospects and the Fed was ready to take further steps to bolster growth if needed, but also that policy makers believed the economy was still on a path to recovery. [ID:nWALLIE6DU]

The Fed chairman’s testimony helped boost demand for the 1.1 trillion yen ($12.6 billion) of 20-year JGBs sold on Thursday, market players said.

The usual rules of engagement were reversed on Thursday as dealers bought superlong bonds ahead of the auction — instead of selling to hedge their positions as they usually do — to stock their inventories in anticipation of strong post-auction demand.

The auction’s bid-to-cover ratio, a gauge of demand, fell to 4.46 from a record high 4.60 at the previous offering in June, although this was still much higher than 3.31, the average from the past 12 sales. [ID:nMOFGV5002] TENDER01

The robust auction outcome reflected the wider variety of investors getting involved in superlong maturities, said Keiko Onogi, a senior JGB strategist at Daiwa Securities Capital Markets.

“The relatively low coupon didn’t appear to dampen demand from buyers getting involved in the superlongs for trading purposes. These investors represent a change in demographics, joining the traditional buy-and-hold investors of superlongs.”

The 1.8 percent coupon on the new 20-years was the lowest in six years.

Superlongs have long been the domain of buy-and-hold investors like life insurers, but recent data has pointed to a growing presence of investors like regional banks, “shinkin” co-op banks and agricultural institutions.

Bond investors such as domestic banks have been putting more money to work in superlongs recently to boost returns as yields at the shorter end have fallen to multi-year lows.

Superlongs also present investors with opportunities for potential capital gains due to increased volatility, traders said.

On a monthly basis, Japan’s benchmark 10-year yield has been declining since April, tugged lower by factors including Europe’s sovereign debt crisis, prospects of a global economic slowdown and hopes for fiscal austerity at home.

While the influence of the debt crisis and fiscal austerity hopes have receded, prospects of an economic slowdown have been kept alive following a string of downbeat indicators from the United States.

Market focus has recently shifted to the Federal Reserve and whether it will maintain a low rate policy longer than expected.

The 20-year yield JP20YTN=JBTC declined 4 basis points to 1.765 percent and the 30-year yield JP30YTN=JBTC also dropped 4 basis points, to 1.830 percent.

The five-year/20-year yield spread tightened by 3 basis points to 143.5 basis points. It has tightened by about 14 basis points over the past month. (Editing by Joseph Radford)

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EURO GOVT-Bunds higher after Bernanke

July 23, 2010 By Leave a Comment

July 22 (Reuters) – German Bunds rose on Thursday, tracking overnight moves in U.S. Treasuries after the Federal Reserve Chairman said that the world’s largest economy faced “unusually uncertain” prospects, prompting a sell-off in riskier assets.

Ben Bernanke said the Fed stands ready to ease monetary policy further if the budding U.S. economic recovery withers [ID:nN21165172].

Two year US Treasury yields US2YT=RR hit a record low in the wake of the testimony and ten-year yields US10YT=RR held near 15 month lows.

“Those looking for imminent quantitative easing were probably disappointed, but the ‘uncertain outlook’ and talk of taking action is pretty dovish,” a trader.

At 0603 GMT, September Bund futures FGBLc1 were 40 ticks higher at 129.30 having risen above the 21 day moving average at 129.10 at the market open.

Traders were looking to July’s high of 129.54 as the next key resistance level, to break out of the recent trading range.

Two-year bond yields DE2YT=TWEB were 1.8 basis points lower at 0.706 percent, with 10-year yields DE10YT=TWEB almost 4 basis points lower at 2.599 percent .

Euro zone flash manufacturing and services PMIs are released from 0658 GMT, with the regional manufacturing index expected to slip to 55.2 from 55.6 in June and the services index seen falling to 55.0 from 55.5.

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S.Africa’s rand steadies vs dlr, risk appetite low

July 21, 2010 By Leave a Comment

JOHANNESBURG, July 20 (Reuters) – South Africa’s rand recovered its footing against the dollar on Tuesday after touching near 2-week lows overnight but remained vulnerable to risk aversion as the global economic recovery continues to stutter.

The JSE’s blue chip Top-40 September futures contract ALSIc1 was up 0.54 percent ahead of the 0700 GMT start of trade, suggesting a bounce on the bourse after miners and banks pulled stocks lower on Monday.

At 0652 GMT the rand ZAR=D3 was at 7.62 to the dollar, up 0.46 percent from Monday’s close at 7.6550.

But traders said the currency could revisit the 7.68 area it dipped to overnight as investors fretted about sluggish prospects for the global economy after last year’s recession.

“We’ve seen the dollar strengthening yesterday against the majors and that’s also supported the dollar against the rand,” a trader based in Johannesburg said.

“The consensus is that guys are taking a bit of risk off. I think we should find support towards 7.61 and we’ll trade up to 7.67/68 for the day.

Government bonds edged higher, with the yield on the benchmark 2015 bond ZAR157= falling five basis points to 7.70 percent while that on the 2036 ZAR209= note was down 4.5 basis points to 8.875 percent.

(Reporting by Stella Mapenzauswa; Editing by John Stonestreet)

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UPDATE 1-Hungary rules out austerity to IMF/EU, markets fall

July 20, 2010 By Leave a Comment

BUDAPEST, July 19 (Reuters) – Hungary’s government insisted on a new financial sector tax this year and ruled out further austerity measures at talks with international lenders that were suspended at the weekend, the economy minister said on Monday.

The forint plunged about 2.7 percent in early trading on Monday to 289.70 versus the euro EURHUF=D2 after a review of Hungary’s funding agreement signed in Oct. 2008 fell through on Saturday when lenders said the new centre-right government needed to take tougher measures to rein in the budget deficit. [ID:nLDE66G0AP]

Government bond yields jumped 20-25 basis points after the open in illiquid trade.

Talks with the International Monetary Fund (IMF) and the EU ended prematurely on Saturday without concluding the country’s programme review.

This means Hungary will not have access to remaining funds of about 5.5 billion euros ($7.1 billion) in its 20 billion euro financing deal until the review is completed.

Even though the country is not under immediate financing pressure, it has been using the IMF/EU loan as a safety net this year so the lack of agreement risks damaging investor confidence. [ID:nLDE66I08V]

Economy Minister Gyorgy Matolcsy told public television m1 on Monday that the IMF and EU have voiced concerns over a 200 billion forint tax planned by the government to contain the budget deficit and a bill which would cut the central bank governor’s salary.

“Hungary has experienced a programme of austerity over the past five years, we inherited this from the previous governments and we would like to do away with the unfortunate consequences of these steps,” Matolcsy said.

“We have told our partners that further austerity packages were out of the question.” The IMF said in a statement on Saturday that Hungary will need to take additional measures to meet its deficit targets this year and in 2011, set out in its current financing deal and in line with the country’s obligations with the European Union.

In a separate statement, the European Commission said the reducing Hungary’s deficit by next year “will require tough decisions, notably on spending.”

Hungary’s new government has pledged to meet this year’s budget deficit target of 3.8 percent of GDP, which Matolcsy reaffirmed on television on Monday, but he said this should be done primarily with the help of the planned tax on banks.

“We will impose the bank tax, we know this is a significant extra burden but we also know that with this we can achieve the 3.8 percent deficit,” he said.

“It is either bank tax or austerity, these are the two ways of thought.”

For highlights of Matolcsy’s comments click [ID:nLDE66I07T]

(Reporting by Gergely Szakacs and Krisztina Than; Editing by Ruth Pitchford)

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Irish/German government bond yield spread widens

July 20, 2010 By Leave a Comment

July 19 (Reuters) – The premium investors demand to hold 10-year Irish government bonds rather than euro zone benchmark Bunds rose on Monday after ratings agency Moody’s Investors Service downgraded the sovereign’s debt.

Moody’s downgraded Irish debt by one notch to Aa2 from Aa1, but raised the outlook to stable from negative, capping the risk of further downgrades. [ID:nWLA8628]

Analysts also said that ahead of Irish bond supply on Tuesday, the country’s bonds were cheapening off, driving yields higher agains Bunds. [EURODEBT/O]

The 10-year Irish/German government bond yield spread IE10YT=TWEBDE10YT=TWEB widened by nine basis points since the Friday settlement close to 300 bps, its highest since July 2. (Reporting by George Matlock)

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Hungary bond yields jump as IMF/EU talks shelved

July 20, 2010 By Leave a Comment

July 19 (Reuters) – Hungarian government bond yields jumped by 20-25 basis points across the curve in illiquid trade at the open on Monday after government talks with international lenders ended inconclusively at the weekend.

Dealers said yields could rise further still and prevailing uncertainty in the absence of an agreement with the International Monetary Fund and the European Union would continue to weigh on the market. [ID:nLDE66G0AP]

(Reporting by Krisztina Than and Gergely Szakacs; editing by John Stonestreet)

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EURO GOVT-Bonds higher after Moody’s downgrades Ireland

July 20, 2010 By Leave a Comment

July 19 (Reuters) – German Bunds advanced nearly a fifth of a point early on Monday after Moody’s Investors Service downgraded Irish debt. [ID:nSYU010299]

Bunds had opened flat after Germany’s Finance Ministry said the euro zone’s biggest economy is likely to have grown more robustly in the second quarter than the first three months of the year.

The German prediction countered pre-market expectations of a safe-haven rally by Bunds in the face of news that Hungary failed to agree with lenders on its economic plans and risked putting Austrian debt yield spreads under pressure. [ID:nLDE66H021]]

Austria’s banking sector is highly exposed to Hungary.

By 0626 GMT, the September Bund future FGBLc1 was up 13 ticks at 129.29 since the settlement close on Friday.

The two-year Schatz yield DE2YT=TWEB was down 0.6 basis points at 0.779 percent.

Bunds are likely to be supported by expectations that equities will open weaker .FTEU3 at 0700 GMT as markets continued to absorb some poor U.S. earnings data.

On Friday, Bank of America (BAC.N), the biggest U.S. bank, slid more than 9 percent after its quarterly earnings disappointed and the S&P financial index .GSPF dropped 4.4 percent as investors fretted about how banks will make money going forward.

(Reporting by George Matlock; editing by John Stonestreet)

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Q+A: What next after IMF/EU suspend Hungary’s review?

July 19, 2010 By Leave a Comment

(Reuters) – The International Monetary Fund and the European Union have suspended a review of Hungary’s 20 billion euro ($26 billion) financing agreement, but left the door open for more talks with the new center-right Fidesz government.

The decision means Hungary, which uses the package as a safety net, will not have immediate access to undrawn funds of 5.5 billion euros from the financing deal slated to expire in October.

Here are some questions and answers on what lies ahead:

WILL THERE BE A MARKET BACKLASH?

The forint, central Europe’s second-worst performing currency behind the Serbian dinar this year, is bound to weaken, probably in excess of 1 percent, and government bond yields will rise when local markets reopen on Monday.

That will increase Hungary’s borrowing costs and heightened market volatility may also force the central bank, which will discuss interest rates at a regular rate meeting on Monday, into adopting a more hawkish line.

The bank kept interest rates at a record low of 5.25 percent at the past two meetings after 10 months of easing worth 425 basis points. All 25 analysts in a Reuters poll on Thursday expected the bank to hold fire again.

But some analysts said that after Saturday’s unexpected suspension of talks with lenders, the bank may consider a rate hike if markets plunge on Monday.

Falls in the forint will also put pressure on Hungarian households holding trillions of forints worth of foreign currency mortgages, primarily in the volatile Swiss franc, which hit record highs versus the forint in July.

With scarce details on the government’s plans for reforms and no clarity on its 2011 budget plans, a sustained period of uncertainty would have a negative impact on Hungarian markets.

WILL THERE BE AN AGREEMENT WITH LENDERS?

Analysts said despite the talks falling through this week, the government should eventually come to an agreement with the IMF and the European Union, but a deal may not materialize until local government elections due on October 3.

That will give more time for Fidesz to formulate plans on the 2011 budget and on how it wants to transform loss-making state transportation companies into viable businesses able to remain afloat without constant state support.

Analysts said the lack of agreement may also have been a tactical move by the government to postpone the announcement of painful budget cuts needed to cut the deficit below the EU’s 3 percent ceiling next year until after the October poll.

Hungary’s government must also seal a review of the current deal if, as announced earlier, it wants to secure a two-year precautionary agreement worth 10-20 billion euros to serve as a safety net in 2011-12.

DOES HUNGARY NEED IMF MONEY RIGHT NOW?

Hungary has been able to finance itself from the markets since last year and has all of its foreign issuance plans for this year already covered.

Earlier this week debt agency AKK sold all bonds on offer at an auction and raised its 10-year offer by 5 billion forints, with yields dropping about 25-30 basis points across the curve from the previous tenders two weeks earlier.

So far the state has drawn about 12.8 billion euros of the 20 billion available in the IMF/EU package and analysts have said it could safely finance this year’s budget deficit with the help of its available unspent IMF and EU funds worth about 3.5 billion euros. On top of this the central bank has called down 1.4 billion euros from the package and put it in its reserves.

CAN HUNGARY AFFORD TO ESCHEW AN IMF DEAL BEYOND 2010?

The government itself has said it would use a new agreement with the IMF and the EU as a safety net, and not rely on it to cover its funding needs for the next two years.

Analysts said not having a new agreement with international lenders after the current one expires in October would be risky as the deal would be an important credibility anchor but Hungary could still be able to finance itself from the markets.

In a worst case scenario, however, the lack of an agreement with lenders now may trigger a negative market reaction which would leave the government with no choice but to seek the IMF’s good graces again.

(Editing by David Holmes)

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UPDATE 1-Next Thai c.bank head sees 2 pct policy rate end-2010

July 17, 2010 By Leave a Comment

BANGKOK, July 15 (Reuters) – Incoming central bank chief Prasarn Trairatvorakul said on Thursday he expected Thailand’s policy rate to be at 2.0 percent at the end of this year after a 25 basis point increase to 1.50 percent on Wednesday.

“The policy rate will depend on the overall economy and inflation. I believe the central bank will gradually raise the rate,” said Prasarn, who is set to become governor of the Bank of Thailand in October.

“The rate should stand at 2 percent at the year-end,” he told reporters.

Commercial banks have started raising some of their rates in response to the central bank tightening, although Siam Commercial Bank SCB.BK said it would leave loan rates unchanged for now.

“The bank has raised deposit rates only, not lending rates. This is to help support economic growth,” President Kannikar Chalitaporn said in a statement.

It raised its deposit rates by 10-55 basis points, effective Thursday. Its three-month fixed deposit rate is now an annual 0.75 percent and its six-month rate 0.90 percent.

Its minimum lending rate stays at 5.85 percent.

Krung Thai Bank KTB.BK, Thailand’s second-largest lender, is raising its lending rates by between 12.5 and 15 basis points and pushing up rates on fixed-term deposits by 25 to 35 basis points, a senior executive who declined to be named told Reuters.

The executive did not give any new level for rates.

The Bank of Thailand’s rate increase was the first change in 15 months. It had held its key rate at a record low of 1.25 percent since April 2009 to help the economy out of a brief recession.

It said on Wednesday that the economy was recovering more quickly than expected and that political violence in April and May had had minimal impact. The euro zone’s debt problems had not hurt exports, either, it said. [ID:nSGE65103A].

A Reuters poll after the rate decision showed most economists expected another 25 basis point rise at the next meeting on Aug. 25 and, like the incoming governor, they thought the rate would stand at 2.0 percent by the end of the year. [ID:nSGE66D0C5]. (Reporting by Manunphattr Dhanananphorn, Orathai Sriring, Ploy Ten Kate and Khettiya Jittapong; Editing by Alan Raybould)

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Australia’s TASCORP prices A$750 mln 2014 notes

July 16, 2010 By Leave a Comment

(For the latest Australia and New Zealand bond news, double
click on [AU/CRD] and then double click on the ID number)

SYDNEY, July 15 (Reuters) – Tasmanian Public Finance
Corporation (TASCORP) has priced A$750 million ($663 million)
in a new 2014 note issue, the joint lead managers said on
Thursday. The 5.5 percent June 23, 2014 issue, initially
announced with a maximum size of A$500 million, will yield 5.47
percent or 77.75 basis points over the government bond due
2014.

The margin is the middle of preliminary pricing indications
of 75.75bp to 80.75bp over June 2014 Australian government
bond,

Commonwealth Bank of Australia and UBS jointly led the
issue.

The notes settle on July 21 and were issued at a reoffer
price of 100.521 including accrued interests of 0.421.

TASCORP is the state’s financing arm and is rated AA-plus
by S&P and Aaa by Moodys’s.
(Reporting by Cecile Lefort; editing by Balazs Koranyi)

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Thai c.bank sees more policy tightening

July 16, 2010 By Leave a Comment

July 15 (Reuters) – The Bank of Thailand is likely to tighten monetary policy further after Wednesday’s rate increase, Deputy Governor Bandid Nijathaworn said on Thursday.

“Yesterday’s policy rate rise will probably not be the only one … There is a chance that the rate will move higher in the future,” he told reporters.

“But we cannot tell what level it will go to, depending on economic indicators and inflation,” Bandid said.

The central bank raised its policy rate by 25 basis points to 1.50 percent from a record low of 1.25 percent on Wednesday, the first increase since the global financial crisis, citing the recovery in the economy and rising inflationary pressure across Asia. [ID:nSGE65103A]. (Reporting by Boontiwa Wichakul; Writing by Orathai Sriring; Editing by Alan Raybould)

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Germany’s KfW prices A$850 million bond increase

July 16, 2010 By Leave a Comment

(For the latest Australia and New Zealand bond news, double
click on [AU/CRD] and then double click on the ID number)

SYDNEY, July 15 (Reuters) – German state development bank
KfW [KFW.UL] has priced a A$850 million ($751.5 million)
December 2019 bond increase at 124.75 basis points over
government bond, a joint lead said on Thursday.

The margin is equivalent to 78 basis points over quarterly
swap, a source who has seen the terms said.

The issue was initially launched with a minimum size of
A$250 million.

TD Securities and UBS Investment Bank jointly led the
increase.

KfW is rated Aaa/AAA/AAA and is guaranteed by the Federal
Republic of Germany.

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TREASURIES-Edge higher, extend gains made on Fed minutes

July 16, 2010 By Leave a Comment

July 15 (Reuters) – U.S. 10-year Treasury notes edged higher in Asian trading on Thursday, extending gains made the previous day due to weak retail sales data and a pared-back economic outlook from the Federal Reserve.

* Ten-year notes rose about 4/32 in price to yield 3.034 percent US10YT=RR, down 1 basis point from late U.S. trading on Wednesday. Ten-year note futures rose 3/32 to 122-10.5/32 TYv1.

* Two-year notes were unchanged in price to yield 0.6089 percent US2YT=RR, down about 1 basis point from late New York trading and hovering near a record low of 0.590 percent hit in late June. On Wednesday, the two-year yield had slid nearly 7 basis points for its biggest one-day drop in about six weeks.

* While the 10-year yield may head lower in the near term, a sustained drop from current levels seems unlikely, said Junji Kojima, senior deputy manager of Sompo Japan Insurance’s global securities investment department.

* “If the economy weakens too much, that may spur speculation about the possibility of further monetary easing steps and could give a lift to equities,” Kojima said.

* On the other hand, if the U.S. economy holds up relatively well that could also bode ill for Treasuries, which look a bit over-bought, Kojima said.

* Minutes from the Fed’s June policy meeting showed officials felt they should be ready to consider additional steps to boost the U.S. economy if an already softening outlook took a noticeable turn for the worse. [ID:nN14148574]

* Data on Thursday showing that China’s economy slowed in the second quarter contained no surprises, and gave little reason to think that China’s economy was headed for a sharp slowdown that could prompt market players to revise down their outlook for the global economy, said Kojima at Sompo Japan. [ID:nTOE66D06L] (Reporting by Masayuki Kitano; Editing by Michael Watson)

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UPDATE 1-Next Thai c.bank head sees 2 pct policy rate end-2010

July 16, 2010 By Leave a Comment

BANGKOK, July 15 (Reuters) – Incoming central bank chief Prasarn Trairatvorakul said on Thursday he expected Thailand’s policy rate to be at 2.0 percent at the end of this year after a 25 basis point increase to 1.50 percent on Wednesday.

“The policy rate will depend on the overall economy and inflation. I believe the central bank will gradually raise the rate,” said Prasarn, who is set to become governor of the Bank of Thailand in October.

“The rate should stand at 2 percent at the year-end,” he told reporters.

Commercial banks have started raising some of their rates in response to the central bank tightening, although Siam Commercial Bank SCB.BK said it would leave loan rates unchanged for now.

“The bank has raised deposit rates only, not lending rates. This is to help support economic growth,” President Kannikar Chalitaporn said in a statement.

It raised its deposit rates by 10-55 basis points, effective Thursday. Its three-month fixed deposit rate is now an annual 0.75 percent and its six-month rate 0.90 percent.

Its minimum lending rate stays at 5.85 percent.

Krung Thai Bank KTB.BK, Thailand’s second-largest lender, is raising its lending rates by between 12.5 and 15 basis points and pushing up rates on fixed-term deposits by 25 to 35 basis points, a senior executive who declined to be named told Reuters.

The executive did not give any new level for rates.

The Bank of Thailand’s rate increase was the first change in 15 months. It had held its key rate at a record low of 1.25 percent since April 2009 to help the economy out of a brief recession.

It said on Wednesday that the economy was recovering more quickly than expected and that political violence in April and May had had minimal impact. The euro zone’s debt problems had not hurt exports, either, it said. [ID:nSGE65103A].

A Reuters poll after the rate decision showed most economists expected another 25 basis point rise at the next meeting on Aug. 25 and, like the incoming governor, they thought the rate would stand at 2.0 percent by the end of the year. [ID:nSGE66D0C5]. (Reporting by Manunphattr Dhanananphorn, Orathai Sriring, Ploy Ten Kate and Khettiya Jittapong; Editing by Alan Raybould)

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