VIP Vimpel Comms: Court freezes Altimo's stake in Vimpelcom
WSJ reports in a move that could raise fears about Western creditors' ability to enforce claims in Russia, a Siberian court Monday froze a large stake in a Russian mobile-phone company, effectively blocking a margin call on some of those shares from a group of Western banks. An affiliate of Altimo, the telecommunications unit of Russia's Alfa Group, failed to put up additional collateral Friday, after a decline in the value of the shares backing $2 billion in its debt caused it to default.
Deutsche Bank provided the financing last year in two tranches of loans, secured by Altimo's entire 44% stake in OAO Vimpel Communications, Russia's No. 2 mobile-phone company. The German bank syndicated out the loans to a group of other lenders.
Vimpelcom's share price has plunged with the rest of the Russian market, losing more than half its value. Monday, the Eighth Arbitrage Appellate Court in Omsk issued an order freezing all of Altimo's Vimpelcom shares in a separate court case.
That ruling makes it impossible for Deutsche and the other creditors to enforce their right to the shares under the loan agreement, according to people close to the creditors.
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STI SunTrust Banks on Conference Call (40.13 ) -Update-
Earnings power is being impacted by the slower economic environment and it appears as though this 'pressure is unlikely to abate for at least the next quarter or two'... Tier 1 capital ratio is estimated to be 8.15% up 68 basis points from the Second Quarter level of 7.47%... said during earnings call last quarter that while they didn't think they needed significant additional capital, they would continue to evaluate the Capital Markets to determine if regulatory capital could be raised in a cost effective manner.
The public Markets were not condusive to raising capital during the majority of the Third Quarter and so did not access the market.
Given the progress they have made in increasing regulatory capital, are in a position of strength and do not have a deep need for TARP capital... current outlook for the economy has deteriorated significantly in the past 30-45 days... three pillars asset backed Commercial Paper conduit has been able to fund on behalf of Commercial clients daily despite this liquidity crunch... Has seen margin decline this quarter relative to both last quarter and last year. Industry factors including competition for CDs that played a role in not meeting expectations for a stable to increasing margin; however there were a number of items that simply did not anticipate that drove margin down this quarter.
One of those relates to the significant spike in LIBOR that occurred during September. That sharp increase had a negative impact due to the fact that loans based on LIBOR typically reprice early in the month while LIBOR based liabilities repriced throughout the month. Additionally, the accrued interest reversal on new non-performing loans was slightly larger than anticipated as the mix of new NPLs shifted to construction and Commercial. Furthermore, two additional events occurred late in the month that negatively impacted margin.
First, were notified at the end of September that the Atlanta federal home loan bank had decided to lower its dividend, and second, based on recent court resolutions with other industry participants, STI made a decision to modestly increase reserves associated with the very few leverage leases or LILOs that have on books. Clearly, margin has been difficult to predict given the volatility of the interest rates and competitive positioning for deposits. currently believe that margin has stabilized and has more upside opportunity than downside.