Wednesday 30th July 2014
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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.

IOSCO consults on internal controls and procedures of credit rating agencies

Friday, 25 May 2012
IOSCO consults on internal controls and procedures of credit rating agencies The Technical Committee of the International Organisation of Securities Commissions (IOSCO) has published a consultation report, Credit Rating Agencies: Internal Controls Designed to Ensure the Integrity of the Credit Rating Process and Procedures to Manage Conflicts of Interest. This Consultation Report describes certain internal controls and procedures that credit rating agencies (CRAs) use to promote the integrity of the credit rating process and address conflicts of interest, with a view to promoting a better understanding of these practices. The views of stakeholders and CRAs on these questions will assist the IOSCO with further analysis of the internal controls and procedures used by CRAs. http://www.ftseglobalmarkets.com/

The Technical Committee of the International Organisation of Securities Commissions (IOSCO) has published a consultation report, Credit Rating Agencies: Internal Controls Designed to Ensure the Integrity of the Credit Rating Process and Procedures to Manage Conflicts of Interest. This Consultation Report describes certain internal controls and procedures that credit rating agencies (CRAs) use to promote the integrity of the credit rating process and address conflicts of interest, with a view to promoting a better understanding of these practices. The views of stakeholders and CRAs on these questions will assist the IOSCO with further analysis of the internal controls and procedures used by CRAs.

The report is based on an IOSCO review of CRAs that focused on the internal controls established by CRAs to enhance the integrity of the credit rating process and on the procedures to manage conflicts of interest. The review was motivated by the role of CRAs in the 2008 financial crisis, which raised concerns about the quality of credit ratings and credit rating methodologies, the timeliness of adjustments to credit ratings, and, more generally, the integrity of the credit rating process.  The 2008 financial crisis also raised concerns about how conflicts of interest are being managed by CRAs.

The internal controls and procedures described by the Consultation Report are divided into six categories.

 Internal Controls:

Quality of the rating process

Structural support to ensure the quality of the rating process

Monitoring and Updating

Integrity of the Rating Process

Procedures:

Managing Firm-Level Conflicts

Managing Employee-level Conflicts  

Despite concerns about their performance during the crisis, CRAs continue to play an important role in most modern capital markets. Issuers and corporate borrowers rely on the opinions of CRAs to raise capital. Lenders and investors use credit ratings in assessing the likely risks they face when lending money to, or investing in, securities of a particular entity.  Institutional investors and fiduciary investors, likewise, use credit ratings to help them allocate investments in a diversified risk portfolio.  Finally, laws and regulations use credit ratings to distinguish creditworthiness.

This report seeks to describe the operational practices of the CRAs that are designed to give effect to the relevant provisions of the IOSCO Code of Conduct Fundamentals for Credit Rating agencies, which was published in December 2004 and revised in May 2008.

The closing date for responses to the consultation is on Monday  July 9th 2012.

  

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