Interest rates mixed at Treasury auction
WASHINGTON -- Interest rates on short-term Treasury bills were mixed in Tuesday's auction with rates on three-month bills falling to the lowest level since late April while rates on six-month bills were unchanged.
The Treasury Department auctioned $28 billion in three-month bills at a discount rate of 0.025 percent, down from 0.030 percent last week. Another $24 billion in six-month bills was auctioned at a discount rate of 0.050 percent, unchanged from last week.
The three-month rate was the lowest since these bills averaged 0.020 percent on April 28.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.37 while a six-month bill sold for $9,997.47. That would equal an annualized rate of 0.025 percent for the three-month bills and 0.051 percent for the six-month bills.
The Treasury bill auction, normally held on Monday, was delayed until Tuesday this week because of the Labor Day holiday.
Separately, the Federal Reserve said Tuesday the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, was 0.11 percent last week, unchanged from the previous week.
-- The Associated Press
Darden rides backlash, shuffles board
Darden Restaurants Inc., the owner of Olive Garden and LongHorn Steakhouse, nominated eight new directors to its board in an attempt to ward off criticism that its management had become too insular.
The full slate of 12 directors includes four current members, four new company nominees and four others backed by activist investor Starboard Value LP, which has undertaken a proxy battle to gain control of the board, Darden said in a statement Tuesday.
Darden irked Starboard by selling its Red Lobster chain to Golden Gate Capital this year and ignoring the investor's requests to split off its real estate. Starboard proposed its own board slate in May, saying management had shown "contempt for shareholder interests." Since Darden completed the Red Lobster sale in July, its tone has become more conciliatory. Chief Executive Officer Clarence Otis, who had been criticized by Starboard, has agreed to step down this year.
Starboard's plan to replace all 12 nominees with its own slate would give control of the company to an investor with a stake of only about 8.8 percent, Darden said. The nominees proposed Tuesday address the desire for independent voices while letting the turnaround effort continue, the company said.
-- Bloomberg News
Halliburton OKs payments for '10 spill
HOUSTON -- Halliburton has agreed to pay $1.1 billion to settle what it calls "a substantial portion" of plaintiff claims arising from the 2010 BP oil spill in the Gulf of Mexico.
The settlement, if approved by a federal court, would allow businesses and property owners who were hurt by the oil spill to collect punitive damages from Halliburton through a fund to be administered by a court-appointed representative. These plaintiffs will receive or have already received compensation for their economic loss through a separate settlement with BP.
Halliburton and the plaintiffs had been waiting on the court to decide to what extent Halliburton was responsible for the blowout of the Macondo well and the subsequent explosion of the Deepwater Horizon drilling rig. Halliburton was BP PLC's cement contractor on the project. The accident killed 11 workers and led to the biggest oil spill in U.S. history.
"It's a very reasoned compromise to a set of complex legal question at a time of uncertainty," said Joe Rice of the law firm Motley Rice, which has been working for the plaintiffs.
-- The Associated Press
Norwegian drops $3 billion on luxury buy
NEW YORK -- Norwegian Cruise Line is sailing into the luxury sector, spending about $3 billion in cash and stock to acquire the high-end Prestige Cruises International.
It's a huge deal for Apollo Global Management LLC, which acquired a majority stake in Prestige in 2007. Apollo also owns about 20 percent of Norwegian, which saw its shares rocket 13 percent higher before the opening bell Tuesday.
Should certain performance targets be reached, Apollo would be due another $50 million in cash according to terms of the sale.
The two other big Norwegian shareholders, Genting Hong Kong Ltd. and TPG Capital, have already signed off on the deal.
Prestige operates Oceania and Regent Seven Seas cruise lines. The deal will give Norwegian access to Prestige's eight ships and its big-ticket vacation packages. Norwegian owns 13 ships.
Norwegian Cruise Line Holdings Ltd., based in Miami, values the deal at $3.025 billion when debt is included.
The deal is expected to close in the fourth quarter.
-- The Associated Press
British pound slips after U.K. union poll
LONDON -- The British pound slipped sharply Tuesday after an opinion poll showed those advocating Scottish independence from the United Kingdom have gained ground, a little more than two weeks before the vote.
A YouGov poll released Tuesday showed support for Scottish independence running at 47 percent. As a result, the 'no' camp -- those supporting the continuation of the union with England, Wales and Northern Ireland -- only has a 6 percent lead in the poll.
That represents a significant narrowing in the 'no' lead. Less than a month ago, the equivalent poll lead was over 20 points.
The narrowing echoes other findings that the 'yes' campaign has gained ground over the past week or so after its leader, Scotland First Minister Alex Salmond, was widely judged to have bested Alistair Darling, the head of the "Better Together" campaign, in a televised debate.
"A close finish looks likely, and a 'yes' victory is now a real possibility," said Peter Kellner, YouGov's president. "Even if 'no' finally wins the day, it now looks less likely that it will win by a big enough margin to deliver a knockout blow to supporters of independence."
The poll, which was based on interviews with 1,063 people, spooked some traders, and the pound traded 0.6 percent lower at $1.6525. The Scottish independence vote takes place Sept. 18.
-- The Associated Press
Business on 09/03/2014