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Council chief hits back in £4m Old Trafford hotel loan row

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The leader of Trafford council has fought back after criticism over a potential £4m loan to Lancashire County Cricket Club for a new hotel.

The club announced that following a £5m cash injection, the plan for the four-star 150 bedroom hotel, replacing the current one at the Emirates Old Trafford, had moved a step closer.

Bosses say the £12m project will create £1m-worth of employment a year and bring in an extra £2.3m.

Greater Manchester’s combined authority has agreed to provide the £5m loan.

But the plan hinges on another loan, for £4m, from Trafford town hall. The club has already secured the remaining £3m.

Council bosses say the loan will be secured by the town hall at a preferential rate, before the cash is passed on to the cricket club.

It will be paid back, along with the combined authority loan, with interest, by 2021.

A decision will be made by the council at the end of the month.

Opposition Labour leader Andrew Western has expressed ‘concern’ over the arrangement, arguing that the council should not be taking out loans for private businesses in times of austerity.

In 2013, the council gave the club financial backing of £21m for a regeneration project by selling land to supermarket giant Tesco.

Trafford council leader Sean Anstee

Tesco bosses, struggling to secure planning permission for an extension of their Stretford store, offered to buy an unused plot at a nearby high school for £20m more than its worth – if the cash was ring-fenced for the cricket club.

The land-deal was met with fury by Labour councillors.

Coun Western said: “Once again, the council finds itself in the position of being asked to provide financial support to Lancashire County Cricket Club just a few years after gifting some £21m to the club to furnish its recent redevelopment.

“Although I appreciate that on this occasion, we would be talking about a loan rather than a gift, it does concern me that a private business should need to come to the council once more for assistance.

“If this proposal is as sound as is being suggested, the club would be able to source a bank loan for the amount required independently.

“I do not believe the council should be expected to help them out to the tune of millions of pounds yet again at a time of continued austerity.

“I would much rather see investment in the local economy used to support small and medium-sized enterprises who are struggling to access lending in what continues to be a difficult financial climate.”

The council has to cut £21.5m from the books this year.

Leader Sean Anstee said the project will create nearly 80 jobs and bring in an extra £2.3m a year for the borough.

He highlighted that the town hall will make money thanks to interest on the loan, and that council borrowing cannot be used to mitigate service cuts.

Coun Anstee, who also highlighted that the plan is backed by Labour leaders across the region, added: “The choice isn’t whether we want to borrow to fund services.

“It’s whether we use prudential borrowing to support and boost growth. We can continue in austerity and do nothing; or we can choose to lend this money, create jobs and bring an extra £2.3m in. This will cost the taxpayer nothing.”

Lib Dem leader Ray Bowker described the deal as a ‘win-win-win’.

[…]

8 On Your Side: Bill could remove payday loan protections

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LAS VEGAS – Taking out a payday loan is rarely a good idea. Many companies charge high interest rates, and customers can easily get in a trap where they spend years paying off the loans.

If you get a payday loan, be warned. These companies may soon have more leverage over customers. Nevada law offers consumers some protections from payday loan companies, but that could change.

If Senate Bill 123 passes, it would allow payday loan companies that offer long-term loans to sue customers who default on their loans.

“Somebody can get sued after paying for twelve to fourteen months on this loan, and then get sued at the end for more interest,” said consumer advocate Venicia Considine.

Considine says this can hurt payday loan customers who are already strapped for cash.

“The average income nationally of people who go to payday loan lenders is about $22,400 a year,” she said.

Considine says she feels the current laws obligate lenders to ensure anyone they give money to can pay it back. Senate Bill 123 would change that, and it could keep people trapped in a cycle of debt for a long time.

“It’s a lose-lose for the consumer,” she said.

You can voice your opposition to the bill by contacting your state lawmaker.

If you are in trouble with payday loans, the Legal Aid Center of Southern Nevada can help. Their services are free.

If you have a problem you want investigated, contact 8 On Your Side at 702-650-1907.

[…]

Greece says has no cash problem, to present plan next week

By Renee Maltezou

ATHENS (Reuters) – Greece said on Saturday it had no short-term cash problem and that it will hand its European Union partners a comprehensive plan next week for managing the transition to a new debt deal.

The EU has warned time is running out to avoid a financing crisis in Greece.

The new left-wing government in Athens has rejected the austerity that was forced upon the country by an EU/International Monetary Fund bailout and instead says it wants a “bridge agreement” until it has negotiated a new deal.

“We will present a comprehensive proposal on Wednesday,” Finance Minister Yanis Varoufakis said, referring to a meeting of euro zone finance ministers in Brussels on that day.

Varoufakis was attending a cabinet meeting called to prepare the government’s overall policy programme, which Prime Minister Alexis Tsipras will present to parliament on Sunday.

On Friday, Jeroen Dijsselbloem, who chairs the Eurogroup of euro zone finance ministers, told Reuters that Greece had to apply for an extension of its reform-for-loans plan by Feb. 16 to ensure the euro zone keeps backing it financially.

This is essentially an extension of the current bailout, something Greece has said it does not want and will not accept. It is due a 7.2 billion euro trance from the EU/IMF bailout, which it says it does not want because of the austerity strings attached.

Instead, Athens wants authority from the euro zone to issue more short-term debt to tide it over until a new deal is agreed, and to receive already-agreed profits that the European Central Bank and other central banks have gained from holding Greek bonds.

Greece faces interest rate payments of around 2 billion euros over February and should repay a 1.5 billion euro loan to the IMF in March.

That has raised concerns the country may suffer a cash crunch, but this was dismissed on Saturday by the Greek official in charge of the government’s accounts.

“During the time span of the negotiations there is no problem (of liquidity). This does not mean that there will be a problem afterwards,” Deputy Finance Minister Dimitris Mardas said on Mega TV.

Asked whether the state may suffer a cash crunch if talks drag on until May, the minister said he did not expect the negotiations over a new deal to last that long.

“Even if they did, we can find money,” he said.

(Writing by Jeremy Gaunt; editing by John Stonestreet)

Politics & GovernmentBudget, Tax & EconomyEuropean Union […]

IRRRB Loan Guaranty program gets cash infusion

EVELETH — The Iron Range Resources & Rehabilitation Board’s Loan Guaranty program for local businesses has received a $350,000 infusion from the agency’s Business Development Project Fund.

The program, which is an initiative of outgoing Commissioner Tony Sertich to provide more financial help for existing Iron Range small businesses, provides loan guarantees of up to $75,000 under certain guidelines.

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[…]

Should You Borrow From Your Life Insurance?

If you need money in an emergency, one place to look is your insurance policy. That is, if what you have is permanent life insurance – available as either “whole life” and “universal life ” (see Permanent Life Policies: Whole Vs. Universal).

Unlike term life insurance, which has a set time limit on its coverage period and does not accumulate cash value, universal life does have a cash component, especially later on. “In the early years of the policy, most of the premium goes to funding the indemnity benefit. As the policy matures, cash value increases,” says Luke Brown, a retired insurance lawyer in Tallahassee, Fla., who operates YourProblemSolvers to help consumers with insurance, healthcare and consumer issues. (For details, read How Cash Value Builds In A Life Insurance Policy.)

How Much, How Soon

As cash value builds in a whole or universal life insurance policy, policy holders can borrow against the accumulated funds. Life insurance policy loans have one distinct advantage: The money goes to your bank account tax-free.

Insurers generally make no promises as to how fast or to what extent the cash value will increase. So it’s hard to know exactly when your policy will be eligible for a loan. What’s more, insurers have varying guidelines outlining how much cash value a policy must have before you can borrow against it – and what percentage of cash value you can borrow.

Your policy is likely to have sufficient cash value to borrow against “typically after the 10th year the policy is in force,” says Richard Reich, president, Intramark Insurance Services, Inc. a life insurance agency in Glendale, Calif.

Something else to know: This loan isn’t taking money from your own cash value. “You are actually borrowing from the insurance company and using your policy’s cash value as collateral,” says Reich.

No Need to Repay

One attractive aspect of loans against cash value is that you don’t have to repay them – a huge benefit in an emergency.

If you do pay back all or a portion of the loan, options include periodic payments of principal with annual payments of interest, paying annual interest only or deducting interest from the cash value. “Loans have an interest rate like any other type of loan. It tends to be in the 7% to 8% range, which is high in our current environment,” says Reich. Interest will be fixed or variable, depending on your policy.

There is a good reason to repay the loan if you can. “If the loan is not paid back before death, the insurance company will reduce the face amount of the insurance policy when the claim is paid,” says Ted Bernstein, CEO, Life Insurance Concepts, Inc., a life insurance consulting and auditing firm in Boca Raton, Fla.

The accumulated interest can cut deeply into the benefit: “If the policy loan remains outstanding for many years, the amount of the loan grows and grows due to the added interest,” Brown cautions. “That puts the policy at risk of not providing beneficiaries any money upon the death of the insured.

“At the very least, interest payments should be made so that the policy loan does not effectively grow,” Brown adds. That gives you a better shot of having money left to pay out after your death.

When Life Insurance Loans Make Sense

Here are some financial situations when a life insurance loan might be a sensible choice:

You can’t qualify for a standard loan or need cash really, really fast. Because the money is already within the policy and immediately available, it’s a quick source of immediate funds for a new furnace, medical bills or another emergency, with no credit check required. Even if you qualify for a traditional loan from a bank or credit union, a life insurance loan could be a valuable stopgap if you t don’t have time to wait for your application to be processed. When the traditional loan comes through, immediately use it to repay the life insurance loan. You can’t afford your policy’s annual premium. Don’t let a life insurance policy lapse because you can’t afford the payment. A loan can keep the policy in effect as long as the death benefit is greater than the amount of the loan. Your only other loan options have much high interest rates. Before paying a higher interest rate for a loan or pledging additional collateral for a traditional loan, consider taking out a life insurance policy loan, says Bernstein. “Since there are no loan terms such as repayment dates, renewal dates or other fees, compared to traditional loans, life insurance policy loans can be very competitive,” he says.

The Bottom Line

Choosing if and when a life insurance loan is right for you is subjective, Reich says. “You have to look at which is more important; the immediate need for the cash or your family’s need for the death benefit. Understand that any outstanding policy loans will be deducted from the death benefit, resulting in a smaller benefit for your family.”

Before borrowing against your life insurance, it may be helpful to consult a financial advisor to weigh all possible options and outcomes based on your financial portfolio. For more, see What are the pros and cons of life insurance policy loans? and 6 Ways To Capture The Cash Value In Life Insurance.

[…]

Strapped for college cash? New ways to borrow

Private loans are often even higher. Many of the new products also target coding boot camps and other trade schools that aren’t accredited, and so not eligible for federal loans.

But nontraditional student loan models have been slow to catch on. “I remember easily half a dozen to a dozen companies that no longer exist because they weren’t able to make a go of it,” said Mark Kantrowitz, senior vice president at Edvisors.com. “Companies successful at this are no longer doing it.” For example, he said, peer-to-peer student lender Fynanz rebranded as LendKey last year, focusing on loans from the local and nonprofit financial institutions who were often investors under the old model.

Read MoreTo cut college costs, head abroad

Part of the difficulty is on the funding side. It’s not easy to gauge a student’s future earnings potential, let alone sell investors on that opportunity, said Jack Vonder Heide, president of Technology Briefing Centers. Pave’s new loans are a reimagining of its original income-share model, which let backers fund students in exchange for a portion of their post-graduation income rather than a set repayment amount. “We stopped issuing that product in April of this year because of the difficulty in scaling it from the investor side,” said co-founder Oren Bass.

Borrowers also tend to be less aware of the new offerings and more focused on established aid options. Often, rightly so. Current rates on federal subsidized and unsubsidized loans are 4.66 percent for all students, lower than the starting rates for start-ups’ best applicants. “It’s the rare student that is not able to get some aid from their college or the government,” said Vonder Heide. “They don’t really have to dig that deeply to find the money they need to make it work.”

Although Upstart offers loans for uses including paying for tuition and paying off outstanding student loans, since the company’s launch in May, much of the $20 million loaned out has been for other purposes, said Girouard. “The majority, frankly, is paying off credit card debt,” he said.

Read MoreBusiness schools are getting generous with aid

Students should exercise caution before signing on for loans from a start-up, said Kantrowitz. In most cases, it’s an avenue to explore only after traditional routes have been exhausted. “They are not a main way of paying for college,” he said. Fees can easily eat into savings, and some loans are variable rate—not a smart bet with interest rates expected to rise. Federal loans tend to be more flexible on repayment terms, especially if you run into financial trouble.

Sorry, borrowers, but even if the lending start-up goes under, you’ll still owe that outstanding balance. The start-ups have backup servicing companies in place. “There’s no way to make that debt magically disappear,” said Kantrowitz.

[…]

Putin Bailout Haunts Ukraine With Early Repayment Clause

The risk that Russia will seek early repayment of a $3 billion bond is adding to pressure on Ukraine as it races to secure more International Monetary Fund loans.

Russia has the right to call the Eurobond, bought a year ago to avert a default, if Ukraine’s public debt tops 60 percent of gross domestic product. The ratio may jump to 70 percent by Dec. 31, Moody’s Investors Service said Oct. 30.

While Russian President Vladimir Putin said last month he won’t use the redemption clause on the notes, part of a bailout package signed with deposed President Viktor Yanukovych, there’s no guarantee he won’t change his mind, said Paul McNamara at GAM UK Ltd. That could weigh on Ukrainian finances, strained by a war against pro-Russian separatists, political wrangling after October elections and uncertainty about further IMF aid.

“I wouldn’t rely on Russian officials’ statements about the bail bond,” McNamara said Dec. 3 by phone from London. “There’s a real prospect of a standoff between Russia and the IMF, which will find it hard to justify to the western countries the covering of an early repayment.”

Ukraine’s bonds lost 9.3 percent this quarter through yesterday, the most after Venezuela among 58 nations in the Bloomberg USD Emerging Market Sovereign Bond Index. (BEMS) The benchmark note due July 2017 fell 13 cents on the dollar in the period, touching a record-low 73.5 cents on Dec. 3. It traded at 74.3 cents by 10:13 a.m. in Kiev, yielding 22.8 percent.

IMF Requirements

The new government of Premier Arseniy Yatsenyuk, approved by lawmakers this week, needs to adopt a 2015 budget and tax laws complying with IMF requirements to qualify for the next $2.8 billion disbursement. Ukraine needs the cash, part of a $17 billion loan program, to repay other debt, buy heating fuel for winter and stem the hryvnia’s 46 percent slump this year.

Russia, which annexed Ukraine’s Crimea peninsula in March, has repeatedly denied accusations by NATO and the European Union that it’s supporting the insurgency across the border, which has killed more than 4,300 people and displaced 500,000.

The government in Moscow will determine whether Ukraine has crossed the 60 percent debt threshold based on IMF estimates expected early next year, Russian Finance Ministry official Andrey Bokarev said Nov. 27. The ministry didn’t immediately reply to an e-mail seeking comment yesterday.

‘Whole Amount’

The earliest Russia can try to call the bonds is after the ministry publishes preliminary 2014 GDP data in March, Halyna Pakhachuk, head of the Ukrainian Finance Ministry’s debt department, said yesterday. The government in Kiev has the right to wait with the payment until December 2015, when final GDP data is to be released, she said in a phone interview.

“Our 2015 budget will envisage the whole amount needed for the repayment,” Pakhachuk said.

Russia probably won’t call the bond early, according to Regis Chatellier, a London-based director of emerging-market credit strategy at Societe Generale SA, and Lutz Roehmeyer, a money-manager at LBB Invest in Berlin.

“Putin does not want to be seen as the one who triggered a default,” Chatellier said Dec. 3 by e-mail. SocGen has an underweight stance on Ukrainian debt. “The pressure on Ukraine would come very soon anyway as the bond matures next December.”

Towel ‘Thrown’

While Ukraine will probably avoid default, it will seek to re-negotiate debt terms in 2016 or 2017 to prolong maturities by three to five years, LBB’s Roehmeyer said Dec. 1 by phone. Current bond prices are already reflecting such a scenario, according to the money manager, who oversees $1.1 billion of debt from emerging markets including Ukraine.

“Investors are really fed up and most have thrown in the towel,” he said. “Everyone is realizing how far away from each other both sides are and that Russia keeps sending troops.”

Without more IMF payouts, Ukraine can’t stop the hryvnia depreciation that’s stoking bad loans and boosting the future costs of rescuing ailing banks, according to Marco Ruijer, who helps oversee $7.5 billion of emerging-market debt at ING Investment Management in The Hague.

“If the government implements reforms then the IMF will be willing to give them the benefit of the doubt and save them,” he said Dec. 1 by phone. “Russia could move forward the payment. It is a risk, but not one of my main risks.”

Should Russia call the bond, and if Ukraine is unable or unwilling to repay early, this could trigger a restructuring affecting other debt, according to Timothy Ash, London-based chief emerging-markets economist at Standard Bank Group Ltd. Potential losses for Russia on the $3 billion bond may not be a concern for Putin, Ash said Dec. 2 by e-mail.

“This is small change for Russia in the bigger scheme of things, and given its ambitions in Ukraine,” Ash wrote. “You have to ask why it included the debt-to-GDP trigger in the documentation anyway.”

To contact the reporters on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net; Natasha Doff in London at ndoff@bloomberg.net; Volodymyr Verbyany in Kiev at vverbyany1@bloomberg.net

To contact the editors responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net; Daliah Merzaban at dmerzaban@bloomberg.net Chris Kirkham

Press spacebar to pause and continue. Press esc to stop.

[…]

Leveraged Loan Fund Outflows Expand To $511M, Led By Mutual Funds

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Cash outflows from bank loan funds widened to $511 million for the week ended Dec. 3, from $412 million in the previous week, according to Lipper. The latest reading represents the 21st consecutive weekly withdrawal and the 32nd outflow in the past 34 weeks, for a net redemption of $19.2 billion over that span.

The current reading reflects mutual fund outflows of $507 million, plus a negligible $4 million outflow from exchange-traded funds. The influence of ETFs represents just 1% of the outflow for the week, down from 11% last week.

The trailing four-week average is negative $424 million, compared to negative $375 million last week. This reflects the omission of the $1.66 billion outflow reading from six weeks ago. Recall that was the third-largest outflow on record and the highest since $1.3 billion in the week ended Aug. 31, 2011.

The year-to-date fund-flow reading pushes deeper into negative territory, at roughly $12.1 billion, and it’s mostly mutual funds, with ETFs slightly negative at $110 million for the year. In the comparable year-ago period, inflows totaled $50.6 billion, with 10% tied to ETFs, or roughly $5.3 billion.

The change due to market conditions was negative $128 million, with total assets at $95.1 billion at the end of the observation period. The ETF segment comprises $7.3 billion of the total, or approximately 8%. – Joy Ferguson

[…]

Leveraged Loan Fund Outflows Ease Slightly To $374M For The Week

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Cash outflows from bank loan funds eased slightly to $374 million for the week ended Nov. 19, from $398 million in the previous week, according to Lipper. The latest reading represents the 19th consecutive weekly withdrawal and the 30th outflow in the past 32 weeks, for a net redemption of $18.3 billion over that span.

The current reading reflects mutual fund outflows of $343 million, plus a $31 million outflow from exchange-traded funds. The influence of ETFs represents 8% of the outflow for the week, unchanged from the 8% last week and up slightly from 7% two weeks ago.

The trailing four-week average is negative $379 million, versus negative $699 million last week. This reflects the omission of the $1.66 billion outflow reading from four weeks ago. Recall that was the third largest outflow on record and the highest since $1.3 billion in the week ended Aug. 31, 2011.

The year-to-date fund-flow reading pushes deeper into negative territory, at roughly $11.1 billion, and it’s mostly mutual funds, with ETFs slightly negative at $61.4 million for the year. In the comparable year-ago period, inflows totaled $49.4 billion, with 10% tied to ETFs, or $5.2 billion.

The change due to market conditions was negative $79 million, versus total assets of $96.1 billion at the end of the observation period, for roughly a 0.08% gain. The ETF segment comprises $7.3 billion of the total, or approximately 8%. – Joy Ferguson

[…]

NephroGenex Announces Closing of $12 Million Term Loan Facility

RESEARCH TRIANGLE PARK, N.C.–(BUSINESS WIRE)–

NephroGenex, Inc. (NRX), a pharmaceutical company focused on the development of therapeutics to treat kidney disease, announced today that it has closed on a $12 million term loan facility with East West Bank. Funds from the term loan will be utilized for working capital purposes, including the advancement of the Company’s clinical development programs.

Terms of the $12 million loan facility include an immediate $7 million draw, with the additional $5 million available upon the achievement of certain milestones before the end of May 2015. Following the closing of the loan, management expects the Company’s cash position to be approximately $31 million, extending its cash runway further into 2016. The bank facility matures in 2018.

“We are taking this opportunity to strengthen our balance sheet at attractive terms, as we execute on our pivotal Phase 3 program with Pyridorin in diabetic nephropathy,” said Chief Executive Officer Pierre Legault. “This financing gives the Company greater flexibility in reaching an expected successful interim analysis and evaluating options for additional financing or partnering during 2016.”

For more information regarding the term loan facility, see the Company’s Current Report on Form 8-K filed on November 20, 2014.

About Diabetic Nephropathy

Diabetic nephropathy is a chronic, degenerative disease of the kidney caused by diabetes. There are approximately 6 million patients with diabetic nephropathy in the United States (approximately 33% of diagnosed diabetics) and this population is expected to grow. Patients suffering from diabetic nephropathy progress to End Stage Renal Failure (and require dialysis) or death. There are currently no adequate treatments for this disease.

About Pyridorin®

Pyridorin inhibits pathogenic oxidative chemistries, which are collectively elevated in diabetic patients and induce pathological changes implicated in the development of diabetic nephropathy. Pyridorin inhibits a broad range of these chemistries which we believe accounts for its effectiveness in slowing the progression of nephropathy in diabetic patients as shown in our Phase 2 studies. Our lead drug candidate was also found to be safe and well tolerated in these same studies.

About NephroGenex, Inc.

NephroGenex (NRX) is a clinical-stage pharmaceutical company focused on developing therapeutics to treat kidney diseases caused by pathogenic oxidative chemistries. Since our inception, we have collaborated with the leading scientific experts in pathogenic oxidative chemistries to build a strong portfolio of intellectual property and novel acting drug candidates. Our clinical program has been done in collaboration with world leading clinical investigators in kidney disease. Our product pipeline includes an oral formulation of Pyridorin, which is being developed as a chronic, therapeutic agent to slow the progression of diabetic nephropathy, as well as an intravenous formulation of Pyridorin to treat specific types of acute kidney injury.

Cautionary Note on Forward-Looking Statements

This press release contains certain statements that are, or may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will,” or words of similar meaning and include, but are not limited to, statements regarding the outlook for our future business and financial performance. Forward-looking statements are based on our current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially from those in the forward-looking statements due to global political, economic, business, competitive, market, regulatory and other factors and risks, including the items identified under “Part I—Item 1A—Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the Securities and Exchange Commission (“SEC”) on March 31, 2014, as well as in other filings that we may make with the SEC in the future. The forward-looking statements contained in this press release reflect our current views with respect to future events, and we do not undertake and specifically disclaim any obligation to update any forward-looking statements.

HealthDisease & Medical Conditionskidney diseasediabetic nephropathypharmaceutical company Contact: Investors

The Trout Group

Michael Levitan, 646-378-2920

mlevitan@troutgroup.com

or

Media

BMC Communications

Susan Duffy, 646-513-3119

sduffy@bmccommunications.com […]