Short-term T-bill interest rates jump
WASHINGTON -- Interest rates on short-term Treasury bills rose in Monday's auction, with rates on three-month bills reaching their highest level in more than seven years.
The Treasury Department auctioned $31 billion in three-month bills at a discount rate of 0.350 percent, up from 0.275 percent last week. Another $26 billion in six-month bills was auctioned at a discount rate of 0.480 percent, up from 0.370 percent last week.
The three-month rate was the highest since those bills averaged 0.355 percent on Nov. 10, 2008, at the height of the financial crisis. The six-month rate was the highest since those bills averaged 0.510 percent on March 14.
The auction followed a clear signal by the Federal Reserve last week that an interest rate increase is likely next month if the economy keeps improving. The disclosure of minutes of the Fed policymakers' most recent meeting in late April tipped bond prices sharply lower, raising long-term interest rates.
The discount rates at Monday's auction reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,991.1, while a six-month bill sold for $9,975.6. That would equal an annualized rate of 0.355 percent for the three-month bills and 0.488 percent for the six-month bills.
-- The Associated Press
Court revives Libor-tied antitrust suit
NEW YORK -- A federal appeals court in Manhattan on Monday reinstated a civil antitrust case accusing 16 banks of hurting investors who bought securities tied to the London Interbank Offered Rate by manipulating the interest-rate benchmark.
Bank of America Corp. and Citigroup Inc. are among the defendants sued in the civil lawsuit in Manhattan. The appeals court overturned a 2013 ruling by U.S. District Judge Naomi Reice Buchwald who said the investors had failed to show an antitrust injury that would permit them to sue under U.S. law.
The investments tied to the rate, commonly called by its acronym Libor, included asset swaps, collateralized debt obligations and forward rate agreements.
About a dozen firms have paid almost $9 billion in fines to resolve investigations around the world into the rigging of the key benchmark.
-- Bloomberg News
Georgia OKs $7.5M for seaport in S.C.
SAVANNAH, Ga. -- The Georgia Ports Authority approved $7.5 million on Monday for the first big steps toward building a new seaport terminal on the Savannah River, to be operated jointly with South Carolina.
Both states have spent years discussing, studying and debating the proposed $4.5 billion Jasper Ocean Terminal, which would occupy 1,500 acres in Jasper County, S.C., not far from downtown Savannah. South Carolina is expected to commit its $7.5 million share, and together that money will be spent preparing for the required permits over the next three years.
"It's a huge step," said Curtis Foltz, executive director of the Georgia Ports Authority. "This gets a very important phase of the project going forward. It's a strong voice of confidence."
A joint board overseeing the project already asked the Army Corps of Engineers to begin the permitting process for construction at the site as well as widening and deepening the shipping channel.
The Jasper terminal would be a long-term investment for both states. Consultants say the first phase alone would take more than a decade to build at a cost of more than $2 billion.
-- The Associated Press
Tribune rejects Gannett's takeover bid
CHICAGO -- Tribune Publishing Co., infused with a $70.5 million investment from Los Angeles billionaire Patrick Soon-Shiong, rejected Gannett Co.'s latest takeover offer, escalating the battle between the newspaper publishers.
Gannett's revised proposal is "clearly inadequate" to control the owner of the Los Angeles Times and the Chicago Tribune, Tribune Chief Executive Officer Justin Dearborn said in a statement Monday. The $15-a-share proposal from Gannett, the publisher of USA Today, was 22 percent more than its original bid of $12.25 offered publicly on April 25.
In rebuffing Gannett a second time, Tribune is issuing 4.7 million common shares to Soon-Shiong's Nant Capital at $15 apiece, according to a separate statement Monday. Following the deal, Soon-Shiong will become vice chairman on the board and Nant Capital will have a 12.9 percent stake, making it Tribune's second-largest shareholder. That would put it ahead of Oaktree Capital Management, which called last week for a board committee free of top shareholder Michael Ferro's influence to consider Gannett's offer. The moves are the most aggressive yet by Ferro to fend off Gannett.
Gannett said Monday that Tribune was maneuvering behind the backs of shareholders to gain disproportionate control of the company, according to a statement.
Soon-Shiong, 63, is chief executive officer of California-based NantKwest Inc., a cancer-research firm that went public last year. A medical doctor and entrepreneur, Soon-Shiong became a billionaire after selling drug companies APP Pharmaceuticals Inc. in 2008 and Abraxis BioScience Inc. in 2010.
-- Bloomberg News
U.S. banker: U.K. vote won't alter policy
BEIJING -- Federal Reserve Bank of St. Louis President James Bullard said he doesn't see the U.K.'s vote on European Union membership influencing the U.S. central bank policy makers' meeting that will be held the week before the referendum.
Bullard, a voting member of the policy-setting U.S. Federal Open Market Committee this year, said that even if the U.K. decides to leave, "the next day nothing happens" and the country will enter into departure negotiations bound to go "very slowly."
"I also see the probability of an exit vote as having fallen somewhat recently," Bullard told an audience at a monetary and financial institution forum in Beijing on Monday. "Because of these factors, I feel it won't influence the [committee's] decision."
The Federal Open Market Committee meets on June 14-15. On June 23 the U.K. holds its referendum on whether to leave the EU.
-- Bloomberg News
Business on 05/24/2016