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Wall Street Roundup: JPMorgan's soft underbelly. Canadian outrage.

Wall sign -- stan honda afp getty images Gold: Trading now at $1,527 per ounce, up 1.0% from Tuesday. Dow Jones industrial average: Trading now at 12551.66, down 0.1% from Tuesday.

Blaming the raters. European Union officials are attacking American credit ratings agencies for contributing to the ongoing financial crisis there. 

JPMorgan's soft underbelly. JPMorgan has been seen as the success story of Wall Street over the last few years, but its push abroad has exposed some of the bank's weakness.

Canadian outrage. Seventeen Canadian bank executives included generous severance packages for themselves in a deal to sell their company to another Canadian bank, generating anger up North and serving as a cautionary tale for us down South.

The Big Board's decline. A long look at how the New York Stock Exchange lost its preeminent position as the place to trade American stocks.

-- Nathaniel Popper

Credit: Getty Images / Stan Honda

 

Wall Street Roundup: Bernanke's move. Twitter army.

Gold: Trading now at $1,504 per ounce, unchanged from Friday. Dow Jones industrial average: Trading now at 12,454.70, down 0.4% from Thursday.

Bernanke's move. All eyes are on the Federal Reserve and its chairman, Ben Bernanke, who will meet this week to decide on the fate of the so-called QE2 stimulus plan, and will then hold a press conference to discuss it for the first time. 

Nasdaq spencerplatt getty Facing the jury. The trial of Raj Rajaratnam, who stands accused of insider trading, is likely to go to the jury Monday.

Twitter army. Banks are enlisting their customers on Twitter to help them fight against limits on debit card transaction fees.

New savings. In an effort to defend itself against a hostile takeover bid from Nasdaq, the New York Stock Exchange is finding new support for its deal with Germany's leading stock exchange company.

-- Nathaniel Popper

Credit: Getty Images / Spencer Platt

 

L.A. billionaire Udvar-Hazy's aircraft leasing firm raises $802.5 million in IPO

Hazy

On a gloomy day for the stock market, investors gave a warm welcome Monday to the initial public  offering of Air Lease Corp., the Century City aircraft leasing company founded by Los Angeles billionaire Steven Udvar-Hazy.

Air Lease, or ALC, sold 30.3 million shares at $26.50 each of Class A common stock, raising $802.5 million, according to Reuters data. The company had planned to sell 25 million shares for $25 to $28 each.

The stock will begin trading Tuesday on the New York Stock Exchange under the symbol AL.

ALC, which buys planes and rents them to airlines, already has 46 aircraft and anticipates that its fleet will grow to about 100 planes by the end of the year. The company has said it will use the money raised in the IPO to purchase more aircraft.

Alclogo Udvar-Hazy, 65, launched ALC in February 2010, less than two weeks after he left his former business, International Lease Finance Corp., or ILFC.

Udvar-Hazy co-founded ILFC in 1973 and built it to be the world’s largest airliner-renting enterprise. He became a billionaire and one of the richest men in Los Angeles when he sold ILFC to AIG in 1990. AIG allowed him to continue running the company.

But in 2008, AIG was on the brink of collapse and received commitments of up to $182.5 billion in bailout money from the federal government. As part of the bailout, the government began overseeing AIG operations, including that of ILFC, which Udvar-Hazy said hamstrung his ability to manage the company.

Fed up, he left the company to start ALC, tapping contacts made over 40 years in the business. He raised capital from some high-profile investors, including Ares Management and financier Wilbur Ross, and recruited top ILFC executives.

ALC officers and directors own 37% of the stock in the company.

RELATED:

L.A. billionaire Udvar-Hazy's aircraft leasing firm preps IPO 

Steven Udvar-Hazy hopes to set a new course for his jet-leasing firm

-- W.J. Hennigan

twitter.com/wjhenn

Photo: Air Lease Corp. CEO Steven Udvar-Hazy. Credit: Lai Seng Sin / Associated Press

L.A. billionaire Udvar-Hazy's aircraft leasing firm preps IPO for next week

  Hazy

Next week, Los Angeles billionaire Steven Udvar-Hazy's new aircraft leasing venture is headed for a multimillion-dollar arrival on the New York Stock Exchange. 

Century City-based Air Lease Corp., started last year by industry pioneer Udvar-Hazy, is set to go public with a stock offering that will fuel the company's buying power to add to its fleet of new passenger jets.

The deal also will boost the company's ability to take on larger global competitors, including Udvar-Hazy's former firm, International Lease Finance Corp., owned by insurance behemoth American International Group Inc.

Air Lease, or ALC, could sell as many as 28.75 million shares of Class A common stock at $25 to $28 a share, raising as much as $805 million. The company will list on the NYSE under the symbol AL.

In its roadshow presentation for the IPO, the executive team said it intends to use the money raised to fund acquisitions of commercial aircraft and for general corporate purposes.

ALC already has 46 aircraft and anticipates that its fleet will grow to about 100 planes by the end of the year.

“In the leasing business, the more planes you have, the higher your revenue is going to be,” said Nick Einhorn, analyst at IPO tracker Renaissance Capital in Greenwich, Conn.

ALC’s business is similar to leasing an automobile. ALC leases planes to airlines and then sells or re-leases them after a fixed period. Airlines like leasing because they can get new planes at a lower cost than buying them outright. Alclogo

For ALC, it buys planes in bulk and gets the kind of discounts few airlines can get on their own.

According to ALC’s prospectus for the IPO, the start-up has announced deals to buy 153 new aircraft and 10 additional used aircraft through 2017.

Continue reading »

Wall Street Roundup: What now? Wall Street victorious.

Gold: Trading now at $1,470 per ounce, down 0.3% from Friday. Dow Jones industrial average: Trading now at 12,424.18, up 0.4% from Friday.

What now? In the wake of last week's federal budget compromise, and anticipating the fight over the debt ceiling, there is a fierce debate about where the economy is heading -- could the recent good times be reaching their end?

Washington on wall - carolyn cole Not over. A day after the New York Stock Exchange's board rejected Nasdaq's takeover offer, Nasdaq is considering its options, including going directly to the NYSE's shareholders.

Wall Street victorious. New York magazine dedicates most of its new issue to chronicling just how thoroughly Wall Street won in the wake of the financial crisis.

Winning from losing. A new lawsuit accuses JPMorgan of allowing its customers to keep money in one of the bank's struggling investment vehicles while traders at the bank made money off the vehicle's collapse.

Inside China. Unlike in the United States, trading on inside information is an accepted part of the investing game in China.

-- Nathaniel Popper in New York

Photo credit: Carolyn Cole / Los Angeles Times

Steven Udvar-Hazy's Air Lease expects to raise as much as $805 million in IPO

Alc

Air Lease Corp., the Century City aircraft leasing company started last year by Los Angeles billionaire Steven Udvar-Hazy, said it planned to raise as much as $805 million in its initial public offering.

In a filing with the Securities and Exchange Commission on Monday, the company revealed it was selling 25 million shares of Class A common stock at $25 to $28 per share. Underwriters will have the option to buy up to an additional 3.75 million shares.

Air Lease, also known as ALC, plans to list its shares on the New York Stock Exchange under the symbol "AL." The company did not disclose when the stock sale will take place.

The company, which buys passenger planes and rents them out to airlines, said in January that it was planning an IPO. At that point ALC said it wanted to raise $100 million.

The company said it would use the money to fund its acquisition of commercial aircraft and for general corporate purposes.

Udvar-Hazy, 65, founded ALC in February 2010, less than two weeks after he left Century City-based International Lease Finance Corp., or ILFC, the company he co-founded and grew to be the world's largest airliner-renting enterprise. 

Udvar-Hazy set up his new company down the street, recruited other ILFC top executives and within weeks struck a deal with Air Berlin to lease an Airbus A320.

As of March 15, ALC had acquired 46 aircraft, but the firm anticipates growing its fleet to about 100 planes by the end of 2011, according to the SEC filing.

The start-up has announced deals to buy 153 new aircraft through 2017 and 10 more used aircraft. It is leasing planes to 25 airlines in 15 countries.

RELATED:

Steven Udvar-Hazy to buy 54 Boeing 737s for new aircraft leasing firm

Udvar-Hazy launches new jet leasing firm

Steven Udvar-Hazy hopes to set a new course for his jet-leasing firm

-- W.J. Hennigan

twitter.com/wjhenn

Photo: Air Lease Corp. President John L. Plueger, left, with John Leahy of Airbus and Air Lease CEO Steven Udvar-Hazy, announce the start-up's multibillion-dollar deal to buy 51 Airbus airliners in July 2010. Credit: Airbus

Wall Street Roundup: The power of ICE. Barney Frank fires back.

Gold: Trading now at $1,437 per ounce, up 0.5% from Friday. Dow Jones industrial average: Trading now at 12,393.40, up 0.1% from Friday.

Wachovia in the crosshairs. Wachovia, the North Carolina-based bank bought by Wells Fargo, may be facing a lawsuit from the Securities and Exchange Commission over the way it sold mortgage Wall sign -- stan honda afp getty images bonds before the financial crisis, the Wall Street Journal reports.

The power of ICE. Nasdaq got all the press for its hostile bid for the New York Stock Exchange, but  the junior partner in the bid, InterContinental Exchange, may have the most to gain in the deal. 

The German response. Deutsche Boerse, the German stock exchange operator that has signed an agreement to acquire the NYSE, says it won't raise its bid in response to Nasdaq's offer.

Frank fires back. Barney Frank, a co-author of last summer's financial reform bill, took to the pages of the Financial Times to attack Alan Greenspan's article in the paper last week attacking Frank's bill.

-- Nathaniel Popper

Credit: Getty Images / Stan Honda

 

Wall Street Roundup: Goldman's little lie. The richest of the rich.

Gold: Trading now at $1,426 per ounce, down 1.0% from Thursday. Dow Jones industrial average: Trading now at 12,416.57, up 0.8% from Thursday.

Nasdaq plays spoiler. Nasdaq has teamed up with InterncontinentalExchange to make an $11.3-billion bid to snatch NYSE Euronext away from Germany's leading stock exchange.  

Bull -- spencer platt getty Jobs jolt. A good employment report gave stock markets a boost.

Goldman's little lie. Newly released documents show that Goldman Sachs used emergency borrowing privileges from the Federal Reserve five times during the financial crisis, not one time as a top executive said in testimony last year.

Subprime returns. Bonds combining subprime residential mortgages appear to be making a comeback after being blamed for causing the financial crisis.

Richest of the rich. Absolute Return + Alpha is out with its annual list of the highest-earning hedge fund managers, and John Paulson is again at the top with $4.9 billion.

-- Nathaniel Popper in New York

Photo credit: Spencer Platt / Getty Images

 

Nasdaq makes rival bid for Big Board [Updated]

Nasdaq has put together an $11.3-billion bid for the New York Stock Exchange, trying to break up the Big Board's recently announced sale to Germany's leading stock exchange.

Nasdaq OMX Group Inc. has reportedly been trying to put together a rival offer for NYSE Euronext Foggy wall -- justin lane epa since mid-February, when NYSE announced that it was being purchased by Deutsche Boerse AG for $9.5 billion.

In the new deal, Nasdaq teamed up with a leading operator of derivatives exchanges, Atlanta-based IntercontinentalExchange Inc., to offer what it says is a 19% premium over the German company's bid.

[For the record at 8:53 a.m.: A earlier version of this post refered to IntercontinentalExchange as InternationalExchange.]

"We do have to admit that we'd never planned on having the opportunity to bid for NYSE," the chief executive of Nasdaq, Robert Greifeld, said during a Friday call with analysts.

"Not only can we unlock more synergies in each of the businesses but we can offer more growth and more certainties," ICE's CEO,   Jeffrey Sprecher said during the call.

The NYSE said it had received the unsolicited proposal and would review it.

Deutsche Boerse said in a statement that it "continues to strongly believe that the envisaged merger of Deutsche Borse AG and NYSE Euronext is the best possible combination for both shareholder groups and the stakeholders of the companies."

Nasdaq and ICE offered $14.24 in cash, and fractions of both Nasdaq and ICE stock for each NYSE share. Deutsche Boerse made its offer all in stock.

Under the proposed deal, Nasdaq would acquire the NYSE's stock-listing business, and ICE would acquire its derivatives exchange, with both companies continuing to operate independently.

The NYSE's earlier merger announcement was seen as putting Nasdaq, its most notable American competitor, at a big disadvantage in an exchange industry in which scale is all important.

In recent months several global exchange companies have announced mergers and acquisitions.

Nasdaq's bid will have to pass a number of high hurdles to succeed, given that the NYSE's board has already approved the sale to the German company. The agreement the two companies signed would require a $337-million fee to break up.

But the new deal would offer the advantage of keeping the management of the Big Board, one of the icons of American capitalism, squarely in the U.S. Since the German deal was announced, U.S. politicians have expressed concern about the split European-American headquarters of the proposed new company.

Nasdaq and ICE also said that they would be in a better position to fend of competitive concerns from European regulators, who are likely to review the size of the Deutsche Boerse-NYSE combination.

NYSE stock rose 12.8%, or $4.50, to $39.67 at midday Friday.

-- Nathaniel Popper in New York

Photo credit: Justin Lane / EPA

Japanese crisis drives down global stock prices

Mounting fears about the earthquake-induced crisis in Japan pushed down stock prices around the world.

The Dow Jones industrial average was down 200.79 points, or 1.7%, to 11,792.52 points at midday Tuesday. This represents the sharpest drop since a massive earthquake hit Japan last week.

"The sanguine initial reaction of global financial markets to the earthquake that struck Japan last Friday has been short-lived," John Higgins, an economist with Capital Economics, wrote to clients on Tuesday.

In Japan, the Nikkei stock index fell 10.5% Tuesday, making for its sharpest two-day drop since 1987.

Leading indexes were down 4.7% in Germany and 3.5% in France.

Investors reacted to the broadening nuclear power crisis that has followed the quake off the Japanese coast. Authorities struggled on Tuesday to contain new radiation leaks at a nuclear reactor 150 miles north of Tokyo.

Shares in insurance companies that may be forced to cover Japanese losses were particularly hard hit on Tuesday.

In the United States, the Dow has fallen three of the last four days, driven both by the earthquake damage in Japan and the continuing unrest in the Middle East, where Saudi Arabian military forces have entered Bahrain.

The Standard & Poor's 500 index was down 20.75 points, or 1.6%, to 1275.68 on Tuesday.

-- Nathaniel Popper in New York

Wall Street Roundup: Reducing the regulators. Jamie Dimon's pay raise.

Gold: Trading now at $1,385 per ounce, unchanged from Thursday. Dow Jones industrial average: Trading now at 12,333.01, up 0.1% from Thursday.

Washington on wall - carolyn cole Reducing the regulators. In the midst of the budget battle, Republicans voted to sharply reduce the Securities and Exchange Commission's funding -- taking it back to where it was before the financial reform bill was passed. An amendment to the budget legislation would kill the salaries of a number of top financial regulators, including the head of the Consumer Financial Protection Bureau.

Ignoring risk. A new study from an accounting firm found that most banks still have not changed their pay practices to reflect the riskiness of the investments their employees make.

Merger mania. Nasdaq and the InterncontinentalExchange appear to be talking about joining forces, and BATS Global Markets and Chi-X Europe have struck a deal in the days after the New York Stock Exchange agreed to sell itself to its large German rival.

Dimon's pay raise. JPMorgan Chase & Co. Chief Executive Jamie Dimon's pay for 2010 jumped to $17 million, more than his rivals at other big banks.

-- Nathaniel Popper in New York

Photo: The New York Stock Exchange. Credit: Carolyn Cole / Los Angeles Times

 

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