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Cash rich lenders bankroll Japan Inc's shopping spree

Flush with cash from the Bank of Japan (Tokyo Stock Exchange: 8301.T-JP)‘s (BOJ) stimulus effort, lenders won’t be put off from financing Japan Inc’s habit of paying too much for overseas acquisitions, even as a weaker yen makes those deals more expensive, analysts say.

“The banks need someone to lend to and M&A (merger and acquisition) financing is one of the few growth areas for them,” said Barclays (London Stock Exchange: BARC-GB) bank analyst Shinichi Tamura. As long as a company “looks creditworthy enough to pay back the loan, the banks will be happy to back the deal.”

Deal volumes sank to a twelve-year low in 2014, but a recent flurry of M&A deals suggests Japanese companies are ready to shop overseas again.

Last week, Japan Post made a $5.12 billion bid for Australia’s Toll Holdings (ASX: TOL-AU). On Monday, chemicals company Asahi Kasei (Tokyo Stock Exchange: 3407.T-JP) announced it would buy U.S.-based Polypore (NYSE: PPO)‘s energy storage business for $2.2 billion. On Tuesday, Hitachi (Tokyo Stock Exchange: 6501.T-JP) announced it would buy Finmeccanica (Milan Stock Exchange: FNC-IT)‘s transportation operations for 800 million euros ($909 million).

Whether the companies pay too much for overseas acquisitions is not the banks’ problem, according to Japan Macro Advisors chief economist Takuji Okubo: “That’s the company’s problem – the banks only care about the creditworthiness of the acquirer’s parent company.”

Desperate for borrowers

Japanese banks have faced a predicament for years: despite low interest rates, they can’t find enough borrowers.

The situation took a turn for the worse after the BOJ launched an unprecedented asset purchase program in April 2013. The program involves buying government bonds – the main source of yield income in the past for banks. Yields have trended ever lower but failed to stimulate any new demand for loans.

As a result, margins on bank loans in Japan continue to skim record lows. For example, the lending rate on domestic loans at Mitsubishi UFJ Financial Group (Tokyo Stock Exchange: 8306.T-JP), one of the country’s biggest banks, slipped to 1.10 percent in the last three months of 2014, from around 1.3 percent in early 2013, before the BOJ started its massive asset purchase program.

Read More Is Japan Post overpaying for Toll?

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Flush with cash from the Bank of Japan’s stimulus effort, lenders will keep on financing Japan I …

That makes shorter M&A financing package loans that carry higher risk premiums and yields more attractive for banks, said Barclays’ Tamura. A typical loan will be rolled over into a three- to five-year syndicated loan, he said.

“The banks are desperate and are willing to take on the risks,” said Japan Macro Advisors’ Okubo.

But banks aren’t overly concerned about the risk factor.

“Private sector banks believe the loans carry implicit government guarantees” because public sector banks like Japan Bank for International Cooperation lead the M&A financing consortiums, Okubo said.

Race against time

Japanese companies may not need to worry about financing their overseas shopping sprees, but they should worry about the potential for further yen weakness, analysts said.

Prime Minister Shinzo Abe’s economic policies, dubbed Abenomics, and the BOJ’s quantitative easing efforts have weakened the yen by over 40 percent since Abe returned to power in December 2012. Many analysts expect the yen to weaken further.

“It makes sense for companies to be pre-emptive and do deals before the yen weakens anymore,” said BNP Paribas chief credit analyst Mana Nakazora.

Given strong cash balance sheets and a shrinking domestic market, that appears likely, according to PwC Corporate Finance director Gregory Bournet. He expects the number of outbound M&A deals to rise to 20 percent of all deals in fiscal 2015 from 10 percent in 2014.

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Angola Taps Goldman Sachs for Cash as Low Oil Price Cuts Revenue

Angola, Africa’s largest crude producer after Nigeria, is turning to international lenders including Goldman Sachs Group Inc. for cash as it struggles to adapt to the lowest oil prices in more than five years.

The southwest African country secured $250 million each from the New York-based investment bank and Gemcorp Capital LLP of London in separate deals within the past week, the state-run Jornal de Angola reported on Monday, citing decrees by President Jose Eduardo dos Santos.

The Finance Ministry has reduced spending on education, imposed a government hiring freeze and is preparing to cut outflows by a further 20 percent this year to offset the impact of sliding oil prices. Dos Santos has said some large infrastructure projects will be delayed, without specifying which ones. Angola, sub-Saharan Africa’s third-largest economy, depends on oil for about 75 percent of tax revenue and almost all exports.

“For an average price of $60 a barrel, tax revenues will decrease to $32.8 billion compared with $45 billion for 2013,” Manuel Jose Alves da Rocha, chief economist at the Catholic University of Angola in Luanda, the capital, said by e-mail. “There are storm clouds in the behavior of world oil demand.”

The borrowing from Goldman and Gemcorp follows a $2 billion loan to state-oil company Sonangol from China Development Bank, while negotiations are under way with the World Bank about an aid package. Brent crude, the international benchmark, rose as high as $115.71 a barrel in June, before slumping this month to $45.19, the lowest since 2009.

New Projects

Amilcar Xavier, a spokesman for Angola’s Ministry of Finance, didn’t reply to phone calls, e-mails and text messages seeking comment. Joe Stein, a spokesman for Goldman Sachs based in London, said the company declined to comment.

Goldman Sachs owns 1 percent of Cobalt International Energy Inc. (CIE), the Houston-based oil explorer with wells offshore Angola and ties to Vice President Manuel Vicente that prompted a Securities and Exchange Commission investigation. Goldman owns about a 10th of the shares it did when it bought into Cobalt in March 2012, according to data compiled by Bloomberg.

Angola, a member of the Organization of Petroleum Exporting Countries, pumped about 1.62 million barrels of crude a day in December and is targeting 1.83 million barrels this year as projects by U.S.-based Chevron Corp. (CVX) come on stream.

Oil Wealth

Net foreign reserves fell to $26 billion in November from a mid-year $30 billion. Inflation rose to 7.5 percent from 6.9 percent in the same period.

The Finance Ministry estimates public debt could reach $47 billion this year if the 2015 budget based on an $81 oil price isn’t revised. The World Bank estimates Angola’s 2013 gross domestic product at about $124 billion.

Luanda is displaying the benefits of recent oil wealth with a new skyline of office and apartment buildings around a renovated bay as it recovers from a 27-year civil war that ended in 2002. Some builders, such as Mota-Engil SGPS SA and Teixeira Duarte SA, may now have to scale back plans, Portugal’s main construction-industry association, Aecops, said last week.

To contact the reporter on this story: Colin McClelland in Luanda at cmcclelland1@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net John Bowker, Emily Bowers

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[…]

Rangers considering using Ibrox as security against new loan

LONDON (Reuters) – Scotland’s Rangers football club, battling to raise cash to stay afloat, said on Monday it was in talks to agree new funding which could use the club’s Ibrox stadium as security.

Rangers, the 54-times Scottish champions who had to reform as a fourth-tier club in 2012 after being wound up, said it was in talks with two of its stakeholders about raising funds to bolster the team, and that part of a deal could include using Ibrox as protection.

“Such a decision would not be taken lightly,” said the club.

According to media reports, two stakeholders – Sports Direct founder and Newcastle United owner Mike Ashley, and a wealthy consortium called the Three Bears – are separately ready to provide 10 million pound loans, with Ashley reported to want Ibrox as protection.

Rangers, which have also recently rejected two takeover deals, said it continued to need further, urgent short-term funding but that at the current time its assets, cash flow and business did not support a significant financing, leaving the stadium deal as an increasingly viable option.

It said it could also not issue shares in the club in the timeframe required.

In a separate statement, former Rangers director Dave King, whose New Oasis Asset Management vehicle owns almost 15 percent of the club, called for a general meeting to put forward resolutions for the removal of several directors.

King wants Chairman David Somers, CEO Derek Llambias, Finance Chief Barry Leach and James Easdale to be removed and himself and two others to be appointed directors. Rangers said it intended to have the notice withdrawn to avoid extra costs.

“In the meantime the directors will not be distracted from the more important matter of securing the future of the business,” it said.

(Reporting by Kate Holton; Editing by Neil Maidment)

FinanceBoard & Management ChangesRangers football clubIbrox stadium […]

Cost of payday loans to fall as price caps kick in | Money | The …

More than 1m users of short-term loans are expected to see the cost of their borrowing fall as a result of new price caps on payday lenders taking effect on Friday.

However, early indications are that many of the sector’s bigger players will be charging the maximum amount they are allowed under the new regime, rather than setting their fees well below the cap.

Interest and fees on all high-cost short-term credit loans are now capped at a daily rate of 0.8% of the amount borrowed. Meanwhile, if borrowers do not repay their loans on time, default charges must not exceed £15. In addition, the total cost including fees and interest is capped at 100% of the original sum. According to the Financial Conduct Authority, which has introduced the new rules, this means no borrower will ever pay back more than twice what they borrowed.

The price caps mean someone taking out a £100 loan for 30 days and paying it back on time will pay no more than £24 in fees and charges.

Stella Creasy, the Labour MP and prominent campaigner for payday loan reform, warned that the default charges encourage companies to continue pushing households into debt. “Little wonder despite intense scrutiny many of these firms can still make nearly three-quarters of a million pounds a week from British customers,” she said.

Payday lending is a multibillion-pound sector: the Competition and Markets Authority said there were 1.8 million payday loan customers in 2012-13, while the FCA has estimated that in 2013, 1.6 million customers took out around 10m loans. However, some lenders have quit the market ahead of the changes taking place; these include Minicredit, which ceased its lending activities on 10 December.

Consumer organisation Which? said the new regime “comes not a moment too soon”. Richard Lloyd, Which? executive director, said: “The regulator has clearly shown it’s prepared to take tough action to stamp out unscrupulous practices, and they must keep the new price cap under close review.”

Which? carried out research into the amounts that payday lenders were charging just before Christmas, to see if they had cut the cost of borrowing ahead of the price caps taking effect. It found that some of the bigger payday lenders had already brought their charges in line with the price caps. Wonga, QuickQuid, PaydayUK and MyJar were charging the maximum £24 to borrow £100 for 30 days, with default fees charged at £15.

Which? said London Mutual credit union was the only payday loan provider it looked at that charged less than the maximum allowed under the cap, with borrowers having to pay just £3 in interest on a loan of £100 over one month, and no default fees.

The payday loan industry trade body, the consumer finance association, warned that fewer people will get short-term loans and the number of lenders will fall. “We expect to see fewer people getting loans from fewer lenders and the loans on offer will evolve but will fully comply with the cap. The commercial reality is that the days of the single-payment loan are largely over – payday loans are being replaced by higher-value loans over extended periods.”

Martin Wheatley, chief executive of the FCA, said the new caps would make the cost of a loan cheaper for most consumers. “Anyone who gets into difficulty and is unable to pay back on time, will not see the interest and fees on their loan spiral out of control – no consumer will ever owe more than double the original loan amount,” he added.

However, it appears the new regime will not spell the end of the huge annualised interest rates quoted on payday loan websites. Despite the changes, Wonga is still able to charge a representative “APR” of 1,509%, while QuickQuid’s site was promoting an APR of 1,212%.

New rules covering payday loan brokers also take effect on Friday after the regulator was deluged with complaints over practices such as imposing charges that consumers often knew nothing about until they checked their bank account.

These firms cannot now request an individual’s bank details or take a payment from their account without their “explicit consent” first. Payday loan brokers will also have to include their legal name, not just their trading name, in all advertising and other communications with customers, and state prominently in their ads that they are a broker, not a lender.

[…]

Christmas conmen target hard-up families by setting up BOGUS payday loan companies

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Hard-pressed families ­desperate for Christmas cash are being cruelly ripped off by ­bogus payday loan companies.

Victims are duped into handing over an upfront fee of up to £60 to process applications for online loans which never materialise.

They are then redirected to the web page of an authorised lending site – but the owners of the legal sites turn out to be in the dark about the trickery.

It is also believed unscrupulous sites trick “borrowers” into handing over bank details and other personal information which can be exploited or sold.

The Sunday People can reveal the crooks use slick online adverts, complete with pictures of smiling Santas, snowmen and presents, to lure the unwary with ­offers of short-term loans, offered without checks and ­supposedly paid out the same day.

They promise festive fun on the cheap with tempting slogans like: “Spread the cost of Christmas – how much would you like to borrow?”

Dodgy: The sites are designed to dupe the unsuspecting and desperate

In reality many of these websites are part of a shameful world-wide scam which tries to fleece people who are often already struggling for cash.

In one con, police had to be called to a genuine business address which had been used as a front for a rip-off loan website – after angry victims turned up demanding their “admin fee” back and asking why loans had never been paid out.

Debt experts believe 1.4 million Britons will take out payday loans to cope with the cost of Christmas.

Even when the loans are for real, interest rates can be an ­extortionate 3,000% a year.

Lending industry bosses last night urged regulators the Financial Conduct Authority to investigate what it called a “plague” of dodgy websites that promise easy cash with no checks.

Russell Hamblin-Boone, of the Consumer Finance Association, warned: “A plethora of risky Christmas-themed sites have sprung up to trap unsuspecting ­borrowers with promises of loans that offer no protection.

“The result is that people have their money stolen by illegal lenders.”

A few clicks on Google brings up a string of genuine-looking sites advertising Christmas loans at sky-high rates.

PaydayXmas promises “quick cash” with an APR of 3,257% and asks: “How much do you need?”

The website, registered in Douglas, Isle of Man, claims to be a trading brand of an authorised lending broker licensed by the Financial Conduct Authority.

An investigator sent to the broker’s registered address at an ­accountancy office in Wanstead, East London, was told police had been called to control people ­angrily complaining that they had not received loans.

The accountancy firm said the scam had been traced to an ­address in Birmingham, where the money had been banked and then sent to India.

Xmas Loans for People with Bad Credit

At another lending website, Christmas Loans Poor Credit, potential customers are offered payouts ranging from £100 to £1,000 and told: “Apply now and you can enjoy your festive season with full joy.”

The site adds: “Make Christmas more amusing with instant Christmas loans.” But borrowing £225 over 28 days will cost a total of £292.50, an equivalent APR of 2,857%.

People who apply are directed to a page for a genuine credit broker with a registered address in Southend-on-Sea, Essex.

Another site called Spread the Cost of Christmas asks: “How much would you like to borrow?”

Applicants are directed to another site called Little Loans, an authorised credit broker whose parent company Digitonomy is based in Chester.

Digitonomy director Daniel Ashton insisted his company was NOT ­involved in Christmas payday loans.

He said: “Our products are typically loans of around £2,000 over two years.”

His co-director Tim Moss added: “In terms of people borrowing to pay for Christmas, it is not something we would ever recommend.”

A “Need 12 Month Loans” site offers Christmas loans with a 1,990 APR, ­visitors are told: “Have a blast with your beloved ones this Christmas.” Elsewhere on the site, complete with an image of Santa and a Christmas tree, it says: “It is the season of joy.

“If you want to make this Christmas the most celebrated one and have funds in your pockets for the same, then just think of applying for Xmas payday loans. Have a blessed time with your loved ones without having to worry about your financial woes.”

Get Christmas Loans Today

The site is linked to another Financial Conduct Authority-licensed firm whose registered business address is a shop in Finchley, North London.

Another website, Get Christmas Loans, suggests it is linked to an ­authorised loan broker called Cash Lion, which is a trading name of ­legitimate UK company Loan Machine.

Loan Machine director Chris Burgoyne revealed that the Christmas Loans website was nothing to do with his company, based in Gorleston, Great Yarmouth, Norfolk. He said: “We don’t own that site. If they have got a link to us, they shouldn’t have and I will investigate it instantly. It could be a scam.

“We’ve had problems for years with people impersonating us and charging us fees and charging ­customer’s fees.”

Mr Burgoyne said his firm had been targeted so often a ­warning had been posted on the Financial Conduct Authority website, saying fraudsters commonly tried to use their registered name.He added: “We have been targeted for years, hence we got the FCA and the police involved.

“At the end of the day it is a waste of their time linking to us as we are not going to pay them any money. We try and do everything above board.

“We have not got any Christmas sites at all. If people are using our name, then it is very immoral.”

Industry leaders believe that ­unofficial websites, with promises of no credit checks and instant cash, are all in breach of industry rules.

Rudolph’s Readies

The Consumer Finance Association, which represents major short term lenders, has reported a string of Christmas loan websites to the regulator.

Russell Hamblin-Boone, chief executive of the Consumer Finance Association, said Google had taken down some of the sites.

But he added: “As quickly as you get them taken down others crop up under different names. They are duping people. Our advice is simple. Never give your details to a website that you don’t know to trust.”

Debt charities say no one should ever pass over details to sites unless they are certain they are genuine.

But they say regulators need to do more to crack down on some practices in the high cost sector.

Debt-stricken families are advised to seek help from credit unions – regulated co-operatives whose members can borrow from pooled deposits at rates of around 12% a year.

An estimated 1.8 million people use payday lenders, typically taking out six loans a year, at £260 a time.

The Money Advice Trust said: “If you’re struggling to cope with Christmas costs, the best thing you can do is seek free advice from a charity-run service like National Debtline as soon as possible.”

National Debtline can be ­contacted on 080 8808 4000 or www.nationaldebtline.org.uk

And new legal lenders are exploiting Christmas desperation

Alarm has also been raised about new legal payday lenders exploiting ­families desperate to afford Christmas.

The firms, set up because established lenders are scaling back before a New Year crackdown, charge huge interest.

“The sole purpose of the sites is to entice people into applying for credit they may not be able to afford,” said the Consumer Finance Association’s Russell Hamblin-Boone.

“There are no credit checks and no health warning about the risks. All this is in breach of the regulations.”

Jane Tully, of the Money Advice Trust ­charity, said: “Lenders and credit brokers should not be trying to exploit the festive season in a cynical attempt to market loans and several websites have been reported to regulators.”

Under Financial Conduct Authority rules from January 2, lenders ­cannot charge more than 0.8% a day in interest and fees and also cannot charge more than £15 should ­borrowers default.

The FCA said it is aware of the new Christmas loan websites.

Have you been the victim of a pay day loan scam? Please get in touch and email feedback@people.co.uk

[…]

Payday loan charges cap announced

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BBC News – Payday loan charges cap announced by FCA

FCA’s Martin Wheatley: It “may be the case” there will be no High Street payday lenders in a year’s time

“For most of the borrowers who do pay back their loans on time, the cap on fees and charges represents substantial protections,” he added.

The price cap plan – which includes both interest and fees – remains unchanged from proposals the regulator published in July.

‘Tighter checks’

The confirmed measures will see:

Initial cap of 0.8% a day in interest charges. Someone who takes out a loan of £100 over 30 days, and pays back on time, will therefore pay no more than £24 in interest A cap of £15 on the one-off default fee. Borrowers who fail to pay back on time can be charged a maximum of £15, plus a maximum of 0.8% a day in interest and fees Total cost cap of 100%. If a borrower defaults, the interest on the debt will build up, but he or she will never have to pay back more than twice the amount they borrowed

Russell Hamblin-Boone, chief executive of the Consumer Finance Association, said the payday loans industry had already put in place higher standards of conduct.

“We’ve restricted, for example, extending loans, rolling over loans, [and] we’ve got tighter checks on people before we approve loans,” he told BBC Radio Four’s Today programme.

“This [cap], if you like, is the cherry on a rather heavily-iced cake,” he said.

The £2.8bn industry was expected to shrink as a consequence of the cap, which could make people vulnerable to loan sharks, he added.

“We’ll inevitably see fewer people getting fewer loans from fewer lenders,” Mr Hamblin-Boone said. “The fact is, the demand is not going to go away. What we need to do is make sure we have an alternative, and that we’re catching people, and that they’re not going to illegal lenders.”

Zoe Conway, Reporter, BBC Radio 4 Today: The view from Byker, Newcastle

In the High Street in Byker, there are pawn shops, and brightly coloured Money Shops and Cash Converters. It does not take long to meet someone struggling with debt.

Kevin, behind on a loan from a doorstep lender, says people have very few options. “I’ve actually been approached in the street,” he says. “It was one of those ‘legs broke if you don’t pay’ sort of things.”

There is concern in this community that if it gets harder for people to access payday loans, the loan sharks will take over. That is certainly the view at the Byker Moneywise Credit Union. They offer payday loans at much lower rates but few people locally know about them and, admits manager Christine Callaghan, the Union is not big enough to meet the demand for short-term loans.

At The Big Grill, the owner, John, is making bacon sandwiches. He is worried that people may have to resort to stealing to make ends meet. “They’ll turn to crime to get what they want especially for their kids,” he says.

It is a view shared by resident Alison who thinks the government needs to step in to give people more options and better places to turn to.

Responsible lending

Mr Wheatley, of the FCA, said that the regulator’s research had shown that 70,000 people who were able to secure a payday loan now would not be able to do so under the new, stricter rules. They represent about 7% of current borrowers.

However, he disputed the industry’s view that many of these people would be driven into the arms of illegal loan sharks. He said most would do without getting a loan, some would turn to their families or employers for help, and only 2% would go to loan sharks.

He added that he wanted to see a responsible, mature industry for short-term loans.

Gillian Guy, chief executive of Citizens Advice, said: “People who are in a position to borrow need a responsible short-term credit market. A vital part of this is greater choice. High Street banks should seize the opportunity to meet demand and offer their customers a better alternative to payday loans.

“The FCA should monitor the cap, including whether it is set at the right level, to make sure it is working for consumers. They must also keep a close eye on whether lenders are sticking to the rules.”

Earlier this year, the government legislated to require the FCA to introduce a cap on the cost of payday loans. Chancellor George Osborne said the decision would “make sure some of the absolutely outrageous fees and unacceptable practices are dealt with”.

Meanwhile, Cathy Jamieson, Labour’s shadow financial secretary to the Treasury, said she was glad that action was being taken.

“However, we believe these changes will need to be regularly monitored to ensure they are effective. That is why we want to see a review by the end of 2015 – much earlier than is currently being recommended by the FCA,” she said.

More on This Story

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Infineon completes syndication of â¬1.55 billion loan facilities for International Rectifier acquisition

Infineon Technologies AG announced that it has successfully fully syndicated its €1.55 billion committed acquisition loan facilities. Proceeds from the loan facilities, together with cash-on-hand will be used to fund the acquisition of International Rectifier Corporation.

“The significant oversubscription by a diversified syndicate of banks, as well as the long term loan commitment reflect the trust of the banks in the prospects of Infineon and this important acquisition,” says Dominik Asam, chief financial officer of Infineon Technologies AG.

The €800 million and $934 million facilities, which were underwritten by Bank of America Merrill Lynch International and Citibank, London Branch have terms of up to two years and five years respectively. The acquisition of International Rectifier, which was announced on August 20, 2014, is expected to close late in the calendar year 2014 or early in the calendar year 2015.

The loan facilities were syndicated among 13 domestic and international banks. Bank of America Merrill Lynch International Limited and Citigroup Global Markets Limited acted as coordinators and bookrunners on the transaction, which was substantially oversubscribed, thus leading to a corresponding scale-back of the bank commitments.

The syndication of the acquisition loan facilities is Infineon’s largest to date, its first in ten years and establishes the company’s future group of core-banks.

Share this story

CS International 2015 will provide timely, comprehensive coverage of every important sector within the compound semiconductor industry.

The fifth CS International conference will build on the success of its predecessors, with industry-leading insiders delivering more than 30 presentations spanning six sectors.

Together, these talks will detail breakthroughs in device technology; offer insights into the current status and the evolution of compound semiconductor devices; and provide details of advances in tools and processes that will help to drive up fab yields and throughputs.

Attendees at this two-day conference will gain an up-to-date overview of the status of the CS industry, and have many opportunities to meet many other key players within this community.

[…]

Infineon completes syndication of EUR 1.55 billion loan facilities for International Rectifier acquisition

Infineon Technologies AG announced that it has successfully fully syndicated its €1.55 billion committed acquisition loan facilities. Proceeds from the loan facilities, together with cash-on-hand will be used to fund the acquisition of International Rectifier Corporation.

“The significant oversubscription by a diversified syndicate of banks, as well as the long term loan commitment reflect the trust of the banks in the prospects of Infineon and this important acquisition,” says Dominik Asam, chief financial officer of Infineon Technologies AG.

The €800 million and $934 million facilities, which were underwritten by Bank of America Merrill Lynch International and Citibank, London Branch have terms of up to two years and five years respectively. The acquisition of International Rectifier, which was announced on August 20, 2014, is expected to close late in the calendar year 2014 or early in the calendar year 2015.

The loan facilities were syndicated among 13 domestic and international banks. Bank of America Merrill Lynch International Limited and Citigroup Global Markets Limited acted as coordinators and bookrunners on the transaction, which was substantially oversubscribed, thus leading to a corresponding scale-back of the bank commitments.

The syndication of the acquisition loan facilities is Infineon’s largest to date, its first in ten years and establishes the company’s future group of core-banks.

Share this story

CS International 2015 will provide timely, comprehensive coverage of every important sector within the compound semiconductor industry.

The fifth CS International conference will build on the success of its predecessors, with industry-leading insiders delivering more than 30 presentations spanning six sectors.

Together, these talks will detail breakthroughs in device technology; offer insights into the current status and the evolution of compound semiconductor devices; and provide details of advances in tools and processes that will help to drive up fab yields and throughputs.

Attendees at this two-day conference will gain an up-to-date overview of the status of the CS industry, and have many opportunities to meet many other key players within this community.

[…]

Money Talks: payday loans, Wonga ad banned and how to become …

Image 2640b63f-3566-4413-b117-cde7dcb50542-460x276.jpeg

Hello and welcome to this week’s Money Talks – a roundup of the week’s biggest stories and some things you may have missed.

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Wonga writes off debts for 330,000 customers | Business | The …

Wonga, the controversial payday lender, has been forced by the new City regulator to write off £220m of loans to 375,000 borrowers that it now admits should never have been given loans.

The company, which charges annualised interest rates of up to 5,853% a year and has been accused by MPs of “legal loan sharking”, said it would entirely wipe out loans to 330,000 people, and scrap interest and charges owed by a further 45,000 customers.

Some of the loans are understood to be more than a year old and have ballooned from a few hundred pounds to thousands.

Wonga’s new chief executive, Andy Haste – who has been brought in to overhaul the tarnished brand – said the company had been wrong to lend money to people who could never afford to pay it back.

“We are taking action to address the failing of the past. This business had been too focused on growth and cared more about the loan outcome than the customer outcome. We are clearly very sorry for what’s happened to our customers and are doing everything to put that right.”

He said Wonga lacked experienced credit professionals and “lent to people we should not have lent to”, adding: “The checks were not sophisticated enough and not strong enough.”

Wonga was forced to take action by the City watchdog, the Financial Conduct Authority, in an unprecedented crackdown on the payday loans industry. FCA officials have investigated Wonga’s practices at its offices in Camden, north London, and have hauled in Haste and other bosses to its head office in Canary Wharf.

Wonga was required to write off the debts because the FCA found that it had granted the loans without checking people could afford the repayments. The checks were found to be so poor that many borrowers had no chance of ever repaying the loan because of their dire financial circumstances, with many living on unemployment or disability benefits.

“We are determined to drive up standards in the consumer credit market and it is disappointing that some firms still have a way to go to meet our expectations,” said Clive Adamson, the FCA’s director of supervision. “This should put the rest of the industry on notice – they need to lend affordably and responsibly.”

The latest FCA action comes just months after Wonga was censured by the regulator for sending threatening letters to its customers from fake law firms named after its employees.

Wonga will write off all the outstanding debts of 330,000 people who are more than 30 days in arrears. A further 45,000 people who are less than 30 days in arrears as of 2 October can repay their loans without interest or charges. The customers affected will be notified by 10 October.

Wonga refused to state the original value of the loans or how long they had been outstanding. It estimated the write offs – which are more than five times its annual profits – will cost it about £35m as it has already made provisions for many of the loans never being repaid.

Haste, a respected City veteran who joined the company in the summer, said he would “not apportion blame” to Wonga’s founder Errol Damelin, who quit the firm in June.

Damelin described Wonga’s interest rate as a “great deal” and called for tougher regulation to “keep the bad guys out”. The lender, he claimed, used sophisticated algorithms to ensure it did not lend to people who couldn’t afford to repay.

Damelin, who founded Wonga in 2006, had hoped to collect a £100m windfall from floating Wonga on the stock market at a suggested £1bn valuation. Sources at the company said plans for a float have been scrapped.

Haste said the company, which has been accused by the Archbishop of Canterbury of destroying lives, needs an urgent image overhaul and may even change its name.

MPs on Thursday called for Haste, Damelin and other Wonga bosses past and present to be hauled before parliament.

John Mann, a Labour MP on the Treasury select committee, said: “I welcome today’s latest step to crack down on irresponsible payday lenders … this is a company that has taken advantage of people in dire financial circumstances.

“Sadly, it comes as no surprise to learn that Wonga knowingly lent money to people who will never be able to afford to repay a loan and it is morally right that they have been forced to write off these loans.

Fellow Labour MP and Treasury select committee member Pat McFadden, said: “These findings drive a coach and horses through the claim that Wonga has been lending responsibly.”

Andrew Tyrie, the Conservative chairman of the Treasury committee, said: “Many consumers are still being treated badly by financial firms – new cases just keep coming. We will want reassurance that these firms have cleaned up their act, and Wonga may well be one of them.”

Stella Creasy, the Labour MP who has campaigned against payday lenders’ practices and was subjected to personal attacks from Wonga staff, welcomed the FCA’s crackdown but said writing off the loans “does not go far enough to make up the damage and misery caused to so many lives … The FCA are clearly turning over stones and finding some very unpleasant things underneath”. “They will have my full support if they see something criminal and want to take action.”

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Wonga said it intended to make good affected customers’ credit ratings and was contacting credit reference agencies.

The company could be forced to make further payouts in the future as the FCA searches for other Wonga customers who should not have been granted loans but did manage to pay them off.

Wonga said it had changed its lending criteria immediately to put greater scrutiny on customers finances and their “loan to income ratio”. It will also prevent people who have been in arrears or rejected for a loan from reapplying for at least 30 days. Previously someone who had made late repayments, but then paid off a loan could immediately apply for another one.

Wonga warned investors, already reeling from a 53% fall in profits announced on Tuesday, that the changes will lead to “a material drop in the number of loans to new and existing customers”.

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