Financial Service News

Penn Treaty American Corp. has hired a consultant to help chart the company's future, which could include a sale or a merger.

The Salisbury Township insurer said Monday it has retained Friedman, Billings, Ramsey and Co., an Arlington, Va., investment banking firm, to consider ''strategic partnerships, business combination transactions or the sale of certain assets.''

In addition, Penn Treaty said it is conducting a review to determine if it has enough claims reserves. Based on a preliminary report, the company believes it will need to increase the reserves to pay possible claims from existing policies and for projected new business. Read more

A state lawmaker who is suing payday lenders on behalf of clients says now he wants to pass legislation that would ban the industry in South Carolina. via WBT-AM Charlotte

Dutch insurer Aegon said Monday it completed the acquisition of Merrill Lynch's life insurance subsidiaries for $1.25 billion in cash, including excess surplus of about $425 million. via Money

“Until the company has remedied the shortfall of regulatory capital, it may have to restrict new lending volumes and may be unable to pay a final dividend in respect of the year ended 31 October 2007.”

London Scottish Bank warned it may have to axe its dividend as it said it would take a 22 million hit from bad debts.

The sub-prime lender, which specialises in lending money to people with poor credit histories, said the bad debts had mainly occurred in its unsecured consumer credit division.

At the same time it warned that it was facing a 13 million shortfall in the amount of regulatory capital it is required to hold and as a result it may have to restrict new lending volumes.

The Manchester-based group said it was having to increase the regulatory capital held as part of transitional arrangements for the introduction of new regulations, which come into force on Sunday, known as Basel II. Read more

“The multi-billion cash injection from Temasek was not enough and Thain is taking calls from a host of other potential saviors, which are understood to include sovereign fund investors from the Gulf and China”

Merrill Lynch & Co is in talks with Chinese and Middle Eastern sovereign wealth funds that could lead to the sale of another big stake in the U.S. bank, British newspaper The Observer reported, citing sources ... via Earth Times

Delta Petroleum Corporation , an independent energy exploration and development company, said on 31 December that the company has entered into a USD684m strategic financing agreement with Tracinda Corporation, ... via M2.com

U.S. stocks headed for a modestly higher open Monday as investors awaited a report on home sales and looked to close a volatile and difficult year.

In addition, investors found some reason to hope Wall Street would in 2008 be able to put to rest some of its financial troubles. The U.K.'s Observer newspaper reported that Merrill Lynch & Co. was in talks over the weekend to line up capital from investors in China and the Middle East in exchange for portions of the Wall Street firm.

Merrill, like many other financial houses, has been troubled by misplaced bets on mortgages and is now holding assets it finds difficult to unload in a nervous credit market. Read more

“They would likely choose based on analyst coverage in that area, prior underwriting (history), and performance”

WARWICK: Merrill Lynch has bumped Goldman Sachs from the number one spot on an annual ranking of US IPO bookrunners. via Gulf Daily News

“The sale of stock by the members of the executive committee is in line with what each of them has done in the past”

Bear Stearns Cos. chairman-CEO James Cayne sold US$15.4 million of the investment bank's stock this month, at the end of a year in which he found himself at the forefront of a global credit crisis. via Canadian Business Magazine

“Host for the parasites of the world". It's one of the reasons we choose cremation. ”

The Associated Press PORTLAND-- A federal judge ordered a former Oregon man accused of defrauding investors through an online stock scheme to pay almost $2 million. via Daily News

“In addition to airplanes and ships, the new company will lease facilities for rail transport and power generation”

Beijing, Dec 28 China's biggest financial leasing company, a joint venture between China Construction Bank and Bank of America, was officially established here Friday. via Asia Pacific News .Net

“We have no desire for control over the business operations of the bank. We are a long-term thinking financial investor, that is only led by commercial considerations”

The Singapore government, which recently bought a 9 percent stake in UBS, does not aim for operational control over the Swiss bank, a Swiss newspaper reported on Sunday. via WTNZ-TV Knoxville

“This strategic initiative enables us to convert a large non-earning asset into an earning asset in the form of loans, providing earnings and increased liquidity”

Harleysville National Bank has closed on its previously announced sale-leaseback agreement with New York City-based American Realty Capital LLC. via GlobeSt.com

“What you'll see over the next few quarters is more short-term pain, but at the same time, it is a damage control situation.”

The credit crisis that walloped Wall Street this year shows no signs of abating in early 2008, but investors can take some comfort in the fact that the new year brings with it a battle plan. via San Jose Mercury News

“This action is consistent with our ongoing efforts to reduce the ABCP exposure in our liquidity funds in light of current stresses in the credit markets”

- Legg Mason Inc. (NYSE: LM) said it has reduced its asset-backed commercial paper investments in two of its non-U.S. liquidity funds - one in Ireland and the second in Canada.

As a result, the Baltimore-based global asset management firm said Friday it would take a charge in the quarter ended Dec. 31 of $89.7 million.

The company said the amount will be $22.2 million, or 15 cents per diluted share, after tax and including related adjustments to a revenue sharing agreement with a subsidiary. All figures in U.S. dollars. Read more

“While there is no material impact on (Indian) stocks, investors' sentiment is definitely hurt.”

The assassination of Pakistan's moderate opposition leader Benazir Bhutto is unlikely to derail fund flows into neighboring India and other emerging markets in Asia, fund managers said Friday. via InYork

UBS AG, shaken by the U.S. subprime crisis, said Friday it would drop its plans for acquiring India's Standard Chartered Bank. via PR-inside.com

“Taxpayers can also file their return earlier by not claiming the credits being blocked until Feb. 11, and then filing an amended return later to claim the additional credits.”

More than 3 million people will have to wait until February to get their tax refunds because of Congress' late fix to the alternative minimum tax, the IRS said Thursday. via The Daily Gazette

“I think for advertisers one of the conclusions is you don't make decisions to advertise either on television or the Internet when you want to hit all the demographics, but rather you need to have a multiplatform strategy”

Americans more wired, new-media survey finds Journalists test an Apple iPhone following its introduction in Berlin September 19, 2007. via Scientific American

“Any capital new to the space for reinsurance would be a net positive”

Town governments, school districts and other municipalities looking to borrow money got a new option Friday when trying to insure their bonds: billionaire investor Warren Buffett.

Buffett's formation of a bond insurance company provided some validation to an industry that has been battered by fears of collapse in recent weeks.

'If I was thinking of investing in financial guarantors, this would give me comfort,' said Donald Light, a senior analyst with Celent. Light owns Berkshire Hathaway shares. Read more