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Posts tagged ‘BP’

Irish Credit-default swaps surge

Ireland Says They Want To Go Back To The Bond Market As 10-Year Yield Surges Past 9%

The National Treasury Management Agency has today said it will resume borrowing on the state’s behalf from international money markets as soon as conditions allow, saying Ireland may not necessarily have to draw down the bailout funds provided.

NTMA chief executive John Corrigan this morning said the agency was still monitoring market conditions, and that it would move to issue new Irish bonds – which the current bailout funds are being provided in substitute for – whenever conditions were better than the fixed rates offered by the EU and IMF.

The terms of the agreement reached with those two bodies, Corrigan said, did not “preclude the NTMA from seeking to fund in the markets itself”, the Wall Street Journal quotes.

“It was important from a debt management perspective to avoid a situation whereby Ireland would be faced with a “funding wall” upon the conclusion of the programme,” Corrigan said in the NTMA’s end-of-year statement.

The €67.5bn worth of 7.5-year loans being provided by Brussels and Washington are being offered at an average rate of 5.83%; at present, second-hand Irish bonds maturing in eight years’ time are trading at 8.625% this afternoon.

Ireland was forced to negotiate funding deals with the EU and IMF after the market costs for Irish borrowing spiralled beyond levels considered sustainable by the Irish state in September; the NTMA cancelled scheduled auctions for October and November, citing that the high interest rates were beyond what Ireland was willing to pay.

This afternoon, the interest rate being demanded by the markets for Irish 10-year loans – considered the benchmark measure among investors of a country’s ability to meet its obligations – continued to rise above 9%, a level around which it has hovered since before Christmas.

Elsewhere in the NTMA’s end-of-year report, the agency said the cost of paying interest to service Ireland’s national debt – which stood at €93.4bn at the start of the year – had risen to €4.8bn last year, the equivalent of over 15% of Ireland’s tax take for the year when compared to exchequer returns released on Wednesday.

That bill for serving Ireland’s borrowings was, however, €320m below the amount budgeted for.

Fine Gael finance spokesman Michael Noonan described the €4.8bn interest bill as the “toxic legacy of 13 years of Fianna Fáil government”.

Read more: http://www.businessinsider.com/ireland-bond-market-9-percent-2011-1#ixzz1AZROSd6f 


Without coming clean and stop telling lies and a clean out of the current personal in the Department of Finance, NTMA and NAMA they have no chance and the market will let them know soon enough and they did see below.



By Abigail Moses

Jan. 10 (Bloomberg) — Portugal and Ireland led a surge in the cost of insuring against default on European sovereign debt to record levels on concern government funding costs are becoming unsustainable.

Credit-default swaps on Portugal jumped 11 basis points to a peak of 549, according to CMA. Ireland soared 26.5 basis points to an all-time high 682 and Belgium was 7 higher at a 255. That helped push the Markit iTraxx SovX Western Europe to a record 223 basis points.

Investors are bracing for debt sales this week from Portugal, Spain and Italy. Portuguese bonds fell today amid mounting speculation the nation will have to tap the European Union’s 750 billion-euro ($966 billion) rescue facility if its yields remain above 7 percent.

“As yields rise, markets will get more concerned Portugal will have to tap EU/IMF funding,” said Harpreet Parhar, a credit strategist at Credit Agricole SA in London. “The positive for Portugal is that it’s not locked out of the market yet. It can access funding, but at a cost.”

Credit-default swaps on Spain increased 4.5 basis points to 361.5, approaching the Nov. 30 record of 364, and Italy climbed 2 to 255, close to the 268.5 basis-point peak, according to CMA. Greece was up 14 basis points at 1,060.

Sovereign concerns also undermined confidence in the region’s banks, with the cost of insuring financial company bonds at the highest levels in almost two years.

Financial Swaps

The Markit iTraxx Financial Index of credit-default swaps on the senior debt of 25 banks and insurers rose as much as 6 basis points to 210, matching the March 12, 2009 record closing price, according to JPMorgan Chase & Co. The gauge was trading at 206 at 10:30 a.m. in London.

Markit Group Ltd.’s subordinated index jumped as much as 12 basis points to 375, before trading at 366.5. Swaps on the senior debt of Commerzbank AG surged 36 basis points to a record 277, according to CMA. That’s up from 142.5 basis points Jan. 4.

The Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings climbed 12.5 basis points to 451. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings increased 2.5 basis points to 114.25, JPMorgan prices show.

Swaps on BP Plc jumped to a more than five-week high after a leak two days ago at its Trans-Alaska Pipeline System that carries 15 percent of U.S. crude output. Contracts on BP rose 11 basis points to 98, according to CMA.

A basis point on a credit-default swap contract protecting 10 million euros of debt from default for five years is equivalent to 1,000 euros a year. Swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements. An increase signals deterioration in perceptions of credit quality.

–Editors: Michael Shanahan, Paul Armstrong

To contact the reporter on this story: Abigail Moses in London at Amoses5@bloomberg.net

To contact the editor responsible for this story: Paul Armstrong at Parmstrong10@bloomberg.net


This only goes to show that the Markets do not believe a word the Irish Finance Minster says and they just don’t trust him or any of his cronies in the NTMA or NAMA .Despite the denials coming from the Banks and NAMA the huge losses in their Derivative positions will have to be publicly acknowledged sooner or later! We might then get a clearer picture of the scale of the problem, we the taxpayers are expected to solve and the inevitable default on the private debts of the corrupt banks will be the obvious outcome .How many times must I repeat myself ? You cannot fool the Markets Mr.Lenihan!


Gulf of Mexico real story

Lindsey Williams, who once served as a chaplain for the oil companies operating in Alaska, shared what he claimed to be the “real story” behind the Gulf oil crisis. He explained that, in the 1970’s, Russia drilled over 40,000 feet into the ground and discovered abiotic oil, i.e. oil which replenishes itself via an as-yet-unknown chemical process. The off-shore drilling done by BP in the Gulf of Mexico, Williams said, was their attempt to create a similar super-deep well and access this same abiotic oil. However, according to his sources, the pressure from this pocket of abiotic oil in the Gulf was so great that it burst all the safety valves on the floating platform.

If this happens in America

If this can happen in America
What hope have we here in Ireland if something goes wrong with Shell in the west of Ireland?
Here in sleepy old Ireland we don’t have anything like of this kind of investigative media / journalism
Just to prove the point did you know the country’s growth exports this year are “our chemical industry exports “and these companies are not Irish but US corporate giants
Recently we heard that the BP oil spill was capped and that the oil was “dispersed “
But exactly what does that mean? I remember hearing them say they were using some chemicals to do this job and then no more news.
Obama Comes on TV and tell the world that it’s all over and America has overcome this challenge once again
well now here we have a chemical called Corexit 9500 that BP is using to Disperse this oil but already we are getting reports about the toxic fallout of this chemical from (Corexit has started eating through boats in the Gulf)(PDF)
This company is like a state within a state and its track record leaves a lot of questions unanswered
The controls that are supposed to be in place have to be questioned ?
When you consider the controls that were supposed to be in place for the financial sector
as a sector that is supposed to spearhead the Irish exports you could argue that the government is likely to bow to pressure from these chemical giants to lay off with the regulation
to thrust them is one thing but control is better don’t you think ?


Max Keiser and BP

On this edition of Keiser Report, Max and co-host Stacy Herbert look at the latest round of threats by bankers to take down the global economy; Citibank reassures investors that BP could survive multiple Deepwaters… at least, financially, but then there is that small matter of “US bloodlust”; and the revolution was not twittered. In the second half of the show, Max talks to Mike Ruppert about peak oil, the Gulf of Mexico oil spill, and his movie “Collapse

That BP oil Spill

BP : Un- loved by the market!

BP (BP) has stolen the headlines over recent weeks, since the explosion and sinking of its Deepwater Horizon rig off the coast of Mexico on the 21st April. Thousands of barrels of oil are gushing into the sea everyday from what is said to be the worst oil spill since the Exxon Valdez disaster off the coast of Alaska in 1989.

As can be seen from the above chart of BP, the share price has plunged around 17% since the explosion, wiping over £20 billion off the company’s market value.

Efforts to contain the leak are costing BP more than $6 million a day and significant litigation and reputable damage is likely to follow. It is difficult to accurately estimate the final costs, but analysts are forecasting a final bill of around $5 to $7 billion, which is well below its reduction in market value.

Recent first quarter results on the 27th April came in comfortably ahead of consensus forecast. The clean replacement cost of supplies, a keenly watched figure that strips out gains or losses from inventories and other non-operating items, for the three months ended 31st March totalled $5.65 billion, which was ahead of estimates of $4.8 billion and well above the $2.58 billion in the first quarter of 2009.

The strength can be largely attributed to the continuing success of the restructuring programme launched by CEO Tony Hayward when he took over in July 2007. Furthermore, following the first quarter results and the initial impact from the oil spill, the chairman of BP, Carl-Henric Svanberg personally bought over £1 million worth of shares above £6 per share.

At the current reduced price, BP yields a generous 7% and due to the growing costs relating to the oil spill there is a fear that the high dividend may not be sustainable. However, the dividend is almost twice covered by earnings and although it is hard to predict the impact of the spill on cash flow, I do not believe the dividend is at risk. The shares trade on less than 8x earnings, with over 13% of growth expected next year, putting them on an attractive PEG of 0.53.

Technical analysis suggests that after the near 20% sharp falls experienced recently, the share price appears to be stabilizing. The moving average convergence divergence (MACD) histogram is stepping higher and the corresponding moving averages appear to be bottoming out, indicating that a new trend could be in the making. Similarly the RSI is levelling off deep within oversold territory, indicating that the selling momentum could be exhausted.

Despite the ongoing uncertainty surrounding the leak, I believe the weakness in the share price is out of proportion to the costs surrounding the incident. The environmental impact is likely to affect the group’s reputation, which will take a while to disperse, but BP is supported by strong fundamentals and I feel the weakness offers a good medium/long term buying opportunity.

At the time of writing the share price is 547.6p and near term targets are seen at 583.5p, 598.75p and 631p, with a stop loss marginally below secondary support at 496.5p.

By Mark Allen
source http://seekingalpha.com/article/205182-oil-stained-bp-a-trading-opportunity?source=hp


I was thinking the very same thing on Friday as BP has now been kicked about for the last two weeks and appears to be un-loved by the market in general I too think the sell off is way over done and the current price is a good place to dip your toe back into this good yield paying stock

I will be dipping in with small amounts with this one!

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