Thursday 31st July 2014
slib33
TICKER - WEDNESDAY - JULY 30th: Avanti Mining Inc has entered into a debt financing mandate letter with a syndicate of six lenders to provide secured debt finance facilities worth $612m to develop the Kitsault molybdenum mine. Lenders include BNP Paribas, Caterpillar Financial Services Corporation, Export Development Canada, Korea Development Bank, Mizuho Bank and UniCredit Bank. The facility set out in the term sheet is comprised of $500m senior debt for a term of 10.5 years, $42m in equipment finance for a term of 5 years and $70m in the form of standby cost over-run facilities for a term of 8 years. The interest rate is LIBOR based, loan repayments are semi-annual or quarterly (for equipment finance) and there are mandatory prepayment provisions of a portion of excess free cash flow. The facility will include customary provisions for a financing of this type, including fees, representations and warranties, covenants, events of default and security customary for this type of financing - Jupiter Fund Management reports strong investment performance with assets under management rising to £33.1bn, with the asset manager benefitting from net mutual fund inflows of £875m over the first half of this year. The firm says it has maintained operating margins above 50%. Maarten Slendebroek, chief executive, says “We are pleased with the progress being made on the implementation of our growth strategy during the first half of 2014. The Board’s intention to increase cash returns to shareholders through a combination of ordinary and special dividends reflects this progress and confidence in our future growth potential. We believe this approach will allow shareholders to participate in our organic growth story while receiving an attractive yield.” There will be an analyst presentation to discuss the results on July 30th at 9.00am at FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD and is also accessible via a live audiocast for those unable to attend in person - CME Clearing says it will remove the Exchange-For-Swap (EFS) identifier for all NYMEX, COMEX and DME exchange futures executed in accordance with CME Rule 538 (Exchange for Related Positions). CME products were removed from EFS eligibility in October of 2010, and CBT products were removed from EFS eligibility in July of 2012. With this final transition, EFS will no longer be a supported transaction type at CME. The EFS transaction type has been harmonized into, and falls under, the Exchange for Risk (EFR) transaction referenced in Rule 538. EFR transactions are privately negotiated transactions (PNT) and include the simultaneous exchange of an Exchange futures position for a corresponding OTC swap or other OTC instrument. In addition, NYMEX, COMEX and DME exchange products will continue to be eligible for Exchange for Physical (EFP) and Exchange of Options for Options (EOO) privately negotiated transactions. Currently, an EFS transaction is represented as a TrdTyp=”12” on TrdCaptRpt messages. Effective on the above date, the TrdTyp value for these transactions should be submitted as “11” (EFR). CME Clearing will reject any NYMEX, COMEX, or DME exchange privately negotiated futures message sent as an EFS. The trade will subsequently need to be resubmitted with a valid transaction type to CME Clearing. Additionally, CME Clearing will re-categorize the Exchange of Options for Options (EOO) transaction type for all CME, CBOT, NYMEX, COMEX, and DME products. Currently, an EOO is represented as an option on an exchange for swap (EFS) in clearing and on FIXML TrdCaptRpt messages. Going forward, an EOO transaction will be represented as an option on an Exchange for Risk (EFR) - Chi-X® Japan Limited, a wholly owned subsidiary of alternative market operator Chi-X® Global Holdings LLC, says local brokers Yamawa Securities Co., Ltd. and Ark Securities Co Ltd., have commenced trading on Chi-X Japan, bringing the total number of trading participants to 23. Yamawa Securities and Ark Securities will access its market centre through Intertrade’s platform - The upgrade of the cities of Bogota and Medellin by Moody’s follows the upgrade on Colombia's sovereign ratings and reflects the close economic and operational links that these cities have with the central government. The rating action also reflects Bogota and Medellin's relatively solid financial metrics and moderate debt levels. The ratings assigned to both Bogota and Medellin are supported by their strong economic position in Colombia that includes a high level of own-source revenues and diversified local economies. The positive prospects of economic growth in the country translate in supportive conditions for both cities through higher local economic growth and own-source revenue growth. The assigned ratings also consider the close oversight that Colombia's central government exerts over the country's regional and local governments. Bogota and Medellin show solid governance and management practices that have supported historical low to moderate debt levels and moderate cash financing requirements, says the ratings agency. Between 2011 and 2013, Bogota's cash financing requirements averaged -5.7% of total revenues and net direct and indirect debt averaged 18.4% of total revenues. Medellin's cash financing requirements over the same period averaged -5.8% of total revenues and debt levels averaged 17.6% of total revenues.
Mark Wiedman, global head of BlackRock’s iShares brand. Mark Wiedman, global head of BlackRock’s iShares brand. Photograph kindly supplied by iShares, November 2011.

20-20: Turning BlackRock's ETF fortunes

Thursday, 15 December 2011
20-20: Turning BlackRock's ETF fortunes Mark Wiedman’s appointment as global head of BlackRock’s iShares brand is a concerted effort to sharpen the focus of the consortium of exchange-traded funds launched by BGI in May 2000 that combines index fund-style diversification with the liquidity of stock trading. To date, iShares accounts for roughly half of the estimated $1.1trn in US-based ETF assets. While AUM continues to grow at a steady clip, competitors have gradually whittled away at the company’s domestic market share (currently around 43%). Can Wiedman buck the trend? David Simons reports. http://www.ftseglobalmarkets.com/media/k2/items/cache/bd3eebf32e04c907d6d9fc42f4213df5_XL.jpg

Mark Wiedman’s appointment as global head of BlackRock’s iShares brand is a concerted effort to sharpen the focus of the consortium of exchange-traded funds launched by BGI in May 2000 that combines index fund-style diversification with the liquidity of stock trading. To date, iShares accounts for roughly half of the estimated $1.1trn in US-based ETF assets. While AUM continues to grow at a steady clip, competitors have gradually whittled away at the company’s domestic market share (currently around 43%). Can Wiedman buck the trend? David Simons reports.

During a recent earnings conference call, Laurence Fink, BlackRock’s chairman and chief executive, likened the recent run-up in ETF product innovation to the pre-crisis market for mortgage-backed instruments. BlackRock, said Fink, “needs to be very assertive as a firm” in order to prevent “a lack of disclosure on these products”.

To help address issues such as transparency—while also enhancing its ETF product line—BlackRock in September 2011 announced it had tapped Mark Wiedman, managing director in charge of corporate strategy, to serve as the new global head of  iShares, the ETF provider acquired by BlackRock as part of the 2009 buyout of Barclays Global Investors (BGI). Wiedman succeeds Mike Latham, who will continue as iShares chairman. Having served as an adviser to global financial institutions on balance-sheet issues at the height of the crisis, as well as heading up corporate strategy for BlackRock, Wiedman got a “crash course” in understanding clients’ problems and mobilising BlackRock’s capabilities in order to solve them. “I worked closely with iShares throughout the BGI integration and on iShares strategy work, so I stepped into the role with some familiarity with the businesses and the terrific leadership team,” says Wiedman.

ETFs appear to be still in their infancy, and have benefited from factors that include greater use of fixed-income and commodity-based products, increased uptake among fee-based advisers, as well as new product launches within the major exchanges. These conditions will likely pave the way for larger ETF fund allocations over the near term. Wiedman claims: “ETFs are one of the top two or three socially productive financial innovations of the past 40 years, with a value proposition that speaks to a galaxy of clients, from sovereign wealth funds to retail investors. ETFs deliver efficient exposure to global markets using the most democratic, transparent, and liquid vehicle yet devised.”

From the perspective of iShares, key growth drivers over the near term include fixed-income ETFs (which currently represent only a fractional amount of total outstanding bonds within the US), as well as equity income. Meanwhile, the potential for across-the-board ETF uptake exists in nearly every market around the world, says Wiedman.

Unifying US and foreign ETF platforms was a priority for BlackRock following the acquisition of iShares, and the ability to offer both US and European product lines to investors around the globe has been one of iShares’ greatest strengths to date.  “Some 15% of the assets in domestic ETFs are currently held outside the US and in Europe in 2011, we’ve seen over 15% organic growth, in part driven by buyers from Asia. As we look forward, our UCITS-compliant European product line could possibly become the de facto global standard,” says Wiedman.

The rise in ETF fund flows has coincided with a marked increase in product complexity, and, in some instances, has sparked concerns over opacity. For its part, the SEC continues to take a dim view of derivatives-based ETF products, compelling many providers to back away from such offerings.  

Wiedman notes: “We would call products that trade on an exchange ‘exchange-traded products’ or ‘ETPs’ while reserving the label ‘ETF’ for a sub-category that meets certain agreed standards of simplicity and transparency, including backing by underlying securities, rather than derivatives. We understand that regulators around the world will have different views. However, we believe that a standardised classification system could help regulators develop appropriate rules in each jurisdiction.”

The proliferation of so-called “cheap beta” ETF products—or, in some instances, ETFs that are totally commission-free—has had a dramatic impact on the business as a whole. Rather than attempt to compete on price, however, iShares has instead turned its attention toward product development, including active ETFs, which mimic the performance of hedge funds at a fraction of the cost. In August 2011, the company sought the SEC’s permission to launch a set of actively-managed equity ETFs, each based on proprietary BlackRock benchmarks.

“If there is a one thing I learned from my past experience at BlackRock, it’s that iShares will succeed by doing what we do best—not by playing on others’ terms,” offers Wiedman. “We are the sole global player competing against regional players in every market. No one can match our global presence, scale, or brand. Capitalising on that unique position is where our future lies.”

Tweets by @DataLend

DataLend is a global securities finance market data provider covering 42,000+ unique securities globally with a total on-loan value of more than $1.8 trillion.

What do our tweets mean? See: http://bit.ly/18YlGjP

Related News

Related Articles

Related Blogs