Saudi Arabia planning Free Trade Zone with Iraq- Barclays private clients launches inded bon in the gulf
- Additional restructuring program launched to revive Alcatel
India's first on-tap securitisation programme from Citibank
Mumbai: June 26, 2002. CRISIL has assigned a "P1+ (so)" (pronounced 'P One Plus Structured Obligation') rating to the short-term PTCs and a "AAA (so)" (pronounced 'triple A structured obligation') rating to the long-term PTCs issued under the on-tap securitisation programme structured by Citibank.
This rating marks yet another innovation by CRISIL in the area of structured finance ratings and represents CRISIL's ability to provide relevant solutions to issuers without compromising investor interest.
As compared to traditional securitisation, under the on-tap programme, the seller has the flexibility to issue PTCs dovetailed to suit market conditions at short notice. The securitised pool would however need to meet certain pre-specified conditionalities laid down by CRISIL. CRISIL has stipulated a rigorous pool selection criteria for the programme after carefully analysing the outstanding portfolio of CFIL and Citibank. Stringent checks and balances have also been put in place to maintain the integrity of the structure and the securitised pool of assets.
The credit enhancement levels have been derived by modelling the credit loss under various simulated stress scenarios. Adequate margin has also been built-in to the credit enhancement to provide for the inclusion of indirect and portfolio purchased contracts under the programme. In addition, the payouts to the PTC holders would be staggered so as to enhance the temporal distribution of credit losses over a larger time frame.
The PTCs would be backed by commercial vehicle & construction equipment hire purchase and loan receivables. The ratings are based on the pool selection criteria, credit enhancement mechanism, the legal opinion indicating the true sale of receivables to be furnished by CFIL/Citibank, and the payment mechanism designed to ensure full and timely repayment of the financial obligations.
Under the on-tap programme, CFIL/Citibank would securitise upto Rs. 500 crore of receivables. Each pool securitised would consist of contracts originated by CFIL/Citibank through their own network (direct) or through a group of franchisees (indirect) and portfolios purchased from other players. The first issue under the on-tap programme, structured in the form of four strips of varying maturities, has already been opened by CFIL. The future payouts for the first issue amount to Rs. 539 million with a green option for another Rs. 276 million.
Saudi Arabia planning Free Trade Zone with Iraq
Dubai: keralamonitor.com Saudi Arabia is likely to establish a free-trade zone agreement with Iraq to improve inter-Arab trade. As against a hostile policy followed by the conservative regimes in the Middle East towards Saddam Hussain, Saudi rulers are now seriously thinking of taking various measures to improve economic relationship with Saddam Hussain - an untouchable for western countries.
Even though the so-called UN sanctions prevent business dealings with Iraq, Arab countries have started doing business with Iraq.
Saddam Hussain has already signed free-trade accords with Algeria, Egypt, Lebanon, Oman, Qatar, Sudan, Syria, Tunisia, the United Arab Emirates and Yemen. All these countries maintain economic links with Iraq, one of the largest countries in the region. There are various multibillion reconstruction projects coming up in Iraq and once the UN sanctions are removed, western firms are keen to get business. However, Iraq government has been doing business mainly with overtly neutral countries like France and India.
Saudi companies presently export foodstuffs, chemicals, medicines, pharmaceutical products and spare parts of agricultural equipment to Iraq as part of the oil-for-food and medicine program approved by the United Nations. Many Arab companies are vying to get contracts for reconstructing Iraq, but the UN Sanctions Committee restrictions adversely affect their business interests. Despite the UN restrictions and the western hostility towards Iraq, Iraqi delegates often visit trade shows and exhibitions conducted in the Arab world.
A number of Iraqi businessmen will visit Saudi Arabia to explore prospects of launching industrial and economic ventures. Arab businessmen are in contact with their Iraqi counterparts for cooperation. Due to the anti-American feeling prevailing in the Arab world due to the Palestine issue, there has been a considerable fall in the sale of US products. Reports suggest that there is a considerable fall in the volume of US-Saudi bilateral trade. American brands like Coco Cola, Mc Donald's, Burger King etc. have been facing sharp fall in sales due to their alleged pro-Israeli policy. American companies are also losing out some of the big contracts in the Arab world, due to its pro-Israeli policy.
BARCLAYS PRIVATE CLIENTS LAUNCHES SECOND HOUSE PRICE INDEX BOND INTO THE GULF
Dubai; June 26, 2002.keralamonitor.com Barclays Private Clients, one of the world's leading wealth management service providers, has launched into the GCC the second edition of its House Price Index (HPI) Tracker Bond, a highly innovative product giving investors the chance to share in UK real estate gains without having to own property.
The second House Price Index (HPI) Tracker Bond is a combination of high interest savings plus an index-linked account that tracks the Halifax House Price Index. "London property is very popular, especially among GCC locals and we are giving them and UK expatriates the opportunity to safely invest in one of the world's most coveted property markets," said Robert Clark, Barclays Head of Premier and Personal Banking Middle East and East Mediterranean.
"Investors can opt to either cash in their investment with an inflated return or buy that property in the future and manage it through Barclays' existing property management service," said Clark.
This bond is split into two separate accounts. Half the investment is placed in a High Interest Cash Deposit Account earning a fixed rate of nine per cent over 12 months. The remaining half is invested in an Index Linked Account, which tracks the Halifax House Price Index. Investors will benefit from 80 per cent of any growth in the Index after five years, and regardless of the property market's performance, investors will get their original investment back in full.
"Both accounts start from September 9, 2002. The High Interest Cash Deposit account runs for 12 months with interest and the cash repaid on September 9, 2003 and there are no restrictions or penalties for early withdrawals from this account," said Clark.
"This is another opportunity for our international clients to benefit from a product that has no downside in terms of capital, offering good interest and potential for capital returns. We believe this will be just as popular as the first bond."
The minimum investment in the bond is £10,000 and the maximum is £1 million. Customers who invest before the start date will receive a rate applicable to one tier above the rate investors would normally receive on a Barclays one month fixed deposit account calculated on a daily basis until the bond begins.
Savers interested in this bond can find out more by calling Barclays Bank IBU in Cyprus on 00 357 22 654443 or go to www.internationalbanking.barclays.co.uk
Additional restructuring program launched to revive AlcatelParis, June 26, 2002 - Alcatel (Paris: CGEP.PA and NYSE: ALA) today
announced that despite further deterioration in market conditions seen in
recent weeks, with second quarter sales about flat sequentially, income
from operations for the second quarter should as previously forecasted
improve by more than 100 million Euro compared to the first quarter. This
is largely the result of on-going reduction of the fixed cost base. In the
current difficult environment, Alcatel continues to further bolster its
balance sheet. Operating working capital should decline by more than 800
million Euro during the second quarter to under 4.5 billion Euro. Operating
cash flow for this second quarter should be positive.For the second half of the year, the increased spending constraints of
service providers, as noticed in their last announcements and expected
future market softness should lead to lower than previously expected
business volume. As a result, second half income from operations should not
contribute to reduce first half loss from operations. Operating working
capital should be reduced further during the second half. OWC /sales ratio
should be in the low twenties at the end of the year. Alcatel is confident
to be able to reduce its net debt at year-end compared to December, 31
2001.Due to the on-going reduction of the fixed cost base of Alcatel, the
quarterly break even cost which had been targeted at 4.7 billion Euro for
end 2002 is now seen under 4.5 billion Euro. On top of it, given the
continued deterioration of the business environment, Alcatel is today
launching additional restructuring moves to accelerate the pace of costs
reduction. The new restructuring effort will lead to a quarterly break even
cost structure below 4 billion Euro on average in 2003. Alcatel intends to
book provisions related to the additional restructuring, leading to a total
amount of restructuring charges of approximately 1.2 billion Euro recorded
in 2002.
