Business news in brief

T-bill rates take fall at weekly auction

WASHINGTON -- Interest rates on short-term Treasury bills fell in Monday's auction, with rates on three-month bills dropping to their lowest point since late 2011.

The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 0.010 percent, down from 0.015 percent last week. Another $23 billion in six-month bills was auctioned at a discount rate of 0.040 percent, down from 0.045 percent last week.

The three-month rate was the lowest since three-month bills averaged 0.005 percent on Dec. 19, 2011. The six-month rate was the lowest since these bills averaged 0.030 percent on Sept. 16, 2013.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,999.74 while a six-month bill sold for $9,997.98.

-- The Associated Press

Banks earn $300 million in Alibaba IPO

Alibaba Group Holding Ltd.'s underwriters raked in $300 million in fees after completing the largest initial public offering in history last week.

The banks received 1.2 percent of the proceeds in fees, according to a regulatory filing. The total IPO size increased to $25 billion, the company said Monday, after the underwriters exercised the option to purchase 15 percent more shares.

Pulling off Alibaba's IPO is a coup for the five lead banks, which were all given an equal stake in the deal's success. The fee structure is different from typical IPOs in the U.S., where one lead manager is awarded much of the fees. Alibaba also used an incentive bonus to coax better performance from underwriters.

Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley each took home 15.7 percent of the fees, while Citigroup Inc.'s share represented 7.9 percent, according to a regulatory filing Monday. Alibaba's 28 other underwriters earned 1 percent or less each, the filing shows.

Alibaba said its underwriters bought an additional 48 million shares from the company at the IPO price of $68 each. Alibaba was able to surpass the current IPO record held by Agricultural Bank of China Ltd.'s $22.1 billion sale in 2010.

-- Bloomberg News

Apple sells 10 million iPhones in debut

Apple Inc. sold a record of more than 10 million iPhones the first weekend two new versions hit stores, helping Chief Executive Officer Tim Cook in a push to narrow Samsung Electronics Co.'s lead in bigger-screen smartphones.

Sales surpassed last year's 9 million units when the iPhone 5s and 5c were introduced, the Cupertino, Calif.-based company said in a statement Monday. The devices went on sale Friday in the same countries as the 2013 rollout, with the exception of mainland China, which had sparked concern that this year's debut might fall short of the record.

"While our team managed the manufacturing ramp better than ever before, we could have sold many more iPhones with greater supply, and we are working hard to fill orders as quickly as possible," Cook said in the statement.

Cook is using the iPhone 6, which has a 4.7-inch display, and iPhone 6 Plus, with a 5.5-inch screen, to push into the turf of Samsung, HTC Corp. and other manufacturers of large smartphones.

-- Bloomberg News

RadioShack in talks with 'major vendor'

RadioShack Corp., the electronics retailer trying to avoid bankruptcy, said it's holding talks with a "major vendor" that could help the company restructure its finances.

The negotiations involve some of RadioShack's largest creditors, the Fort Worth, Texas-based company said Monday in a regulatory filing. While no agreement has been reached, the talks are continuing, the retailer said.

"The company continues to explore how to optimize its various commercial relationships," RadioShack said. "There can be no assurances that any such discussions will result in modifications to the company's commercial arrangements."

RadioShack, with its cash dwindling, has been working to bolster its balance sheet and revamp operations to better compete against e-commerce rivals. RadioShack warned this month that it could be forced to seek bankruptcy if the efforts fail. On Sept. 11, the company said its second-quarter loss widened to $137.4 million and comparable-store sales dropped about 20 percent.

"I take this as a very bad sign," Anthony Chukumba, an analyst at BB&T Capital Markets in New York, said Monday in an interview. "They said, 'We want better terms so we don't have to go bankrupt,' and the vendor said no."

-- Bloomberg News

Clorox exits Venezuela over price rules

OAKLAND, Calif. -- Clorox is shutting down all operations in Venezuela, citing restrictions by the government, supply disruptions and economic uncertainty.

The consumer products company said that for almost three years, its affiliate, Corporacion Clorox de Venezuela S.A., had to sell more than two-thirds of its products at prices frozen by the Venezuelan government. During that same time span, there was a sharp rise in inflation that resulted in significantly higher costs for Clorox.

The Clorox Co. affiliate met repeatedly met with government authorities and said it had expected significant price increases would be allowed earlier in 2014.

However, Clorox said the price increases that were approved were "nowhere near sufficient," and the company would be forced to continue selling products at a loss.

-- The Associated Press

21 deaths said eligible for GM payout

DETROIT -- The death toll from crashes involving General Motors small cars with faulty ignition switches has risen to at least 21.

Compensation expert Kenneth Feinberg wrote in an Internet posting he received 143 death claims as of Friday. He has determined that 21 are eligible for compensation so far. Last week, 19 death claims were deemed eligible for payments.

Feinberg also has received 532 injury claims. Of those, 16 are eligible for compensation thus far. The rest are still being reviewed.

GM has admitted knowing about the ignition switch problem in small cars like the Chevrolet Cobalt for more than a decade. Yet it didn't begin recalling the cars until February.

The switches can unexpectedly shut off the engine and cause crashes.

GM hired Feinberg to compensate crash victims.

-- The Associated Press

Business on 09/23/2014

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