BP has eye on BHP Billiton shale assets
BP PLC is weighing an acquisition of some of BHP Billiton Ltd.'s energy assets as the British oil company seeks more U.S. shale, according to people familiar with the matter.
The London-based company is working with Morgan Stanley to advise on the plans, said the people, asking not to be identified as the matter is private. BP is weighing teaming up with other suitors or swapping conventional assets -- where oil and gas typically flow more easily to the surface than shale -- with BHP, they said.
No final decisions have been made, and BP could decide against proceeding with a formal bid, the people said. Spokesmen for BP, BHP and Morgan Stanley declined to comment.
BHP is selling 800,000 net acres in the Eagle Ford, Permian, Haynseville and Fayetteville shale basins it has said are worth at least $10 billion. It is preparing to sell those assets in up to seven packages, including three in highly prized Permian, people familiar with the matter said this month. It's not clear which of those assets BP wants to buy.
BP held Permian properties until 2010, when it sold a number of such assets to raise cash for expenses tied to its Gulf of Mexico oil spill.
-- Bloomberg News
30-year mortgage rate slips to 4.55%
WASHINGTON -- The key long-term U.S. mortgage rate declined slightly this week, after a steady rise for most of April that pushed the rate to its highest level in more than four years.
Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year, fixed-rate mortgages slipped to 4.55 percent from 4.58 percent last week. By contrast, the benchmark rate averaged 4.02 percent a year ago.
The average rate on 15-year, fixed-rate loans ticked up to 4.03 percent from 4.02 percent last week.
Despite higher borrowing costs and home prices, demand for home purchases has grown as the economic outlook has continued to improve and bolstered consumer confidence.
First-time homebuyers accounted for 46 percent of mortgage loans taken out from January through April, up from 43 percent in the first four months of last year, according to Freddie Mac's data.
To calculate average mortgage rates, Freddie Mac, the Federal Home Loan Mortgage Corp., surveys lenders across the country between Monday and Wednesday each week.
The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. The fees on 30-year and 15-year fixed-rate mortgages were unchanged from last week at 0.5 point and 0.4 point, respectively.
-- The Associated Press
Municipal bonds rally after Fed meeting
Municipal bonds rallied Thursday, pushing yields down by the most in three weeks, after the Federal Reserve signaled it will allow inflation to run slightly above its target, a less hawkish tone than some investors expected.
Yields on top-rated 10-year bonds dropped 3 basis points to 2.47 percent, while those on some longer-dated securities posted a 4-basis-point decline, according to Bloomberg's benchmark indexes.
The move came after municipal debt yields rose relative to Treasurys last week, making state and local bonds more attractive by comparison. Treasurys also gained after Wednesday's Fed meeting.
"Munis underperformed across the curve and looked cheaper," said Peter Block, managing director at Ramirez & Co., a New York-based brokerage.
-- Bloomberg News
Opioid-makers said to favor going to trial
Drug companies including Johnson & Johnson and McKesson Corp. are preparing to take their chances in court rather than pay billions of dollars to settle lawsuits blaming them for opioid addictions that claim the lives of more than 100 Americans daily, according to six people familiar with settlement talks.
With the first trial over opioids just 10 months away, the companies are counting on narrowing or defeating lawsuits by 17 states and hundreds of counties and cities, which would lower or eliminate their settlement costs. But if the defenses fail, the cost of a deal could rise.
Settlement talks sponsored by state attorneys general have been going on since last year, and companies seemed willing to consider a quick global deal to put the litigation behind them without risking bankruptcy. But as negotiations pressed forward in law-firm conference rooms in Dallas and Chicago, the companies lately have shown more confidence in their legal defenses, the people said, speaking on condition of anonymity because the talks are private.
As a result, negotiations with the states have largely stalled, the people said. That comes as talks with local governments have also hit a snag, according to the judge overseeing the separate set of lawsuits.
-- Bloomberg News
U.S. worker productivity up 0.7% in 1Q
WASHINGTON -- U.S. productivity grew at an annual rate of 0.7 percent in the first three months of this year, a weak reading but a slight improvement from the previous quarter.
The first-quarter increase followed an even weaker 0.3 percent gain in the fourth quarter of last year, the Labor Department reported Thursday. Labor costs rose at a 2.7 percent rate in the first quarter, the fastest gain in a year.
Productivity, the amount of output per hour of work, is a key factor determining how fast the economy can grow and how much living standards can increase. Gains in productivity allow companies to pay their workers more without having to boost the cost of their products, a move that can increase inflation.
Productivity gains have been lackluster for most of this recovery, increasing just 1.3 percent for all of 2017. Economists are uncertain why productivity has been so tepid.
From 1947 through 2017, productivity has turned in average annual gains of 2.1 percent. But between 2007 through 2017, growth has slowed to about half that pace with average annual gains of just 1.2 percent.
In 2016, productivity had failed to grow at all, marking the poorest performance in 35 years.
-- The Associated Press
Business on 05/04/2018