Business Desk

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun
NY Sun
NEW YORK SUN CONTRIBUTOR

CREDIT


MASTERCARD PLANS IPO TO TAKE ON VISA


MasterCard, the no. 2 American credit card company, plans to sell half of itself to the public to pay off 1,400 owner banks and obtain $650 million to revive competition with rival Visa International. Members of the public will own 49% of MasterCard’s equity and 83% of its voting rights. Common shares representing 10% of equity and the remainder of its voting rights will be held by a newly created MasterCard charitable foundation, the company said in a filing. A remake of 39-year-old MasterCard through an initial public offering, capital infusion, reduced bank voting rights, and a new board with an independent majority follows an erosion of its market share over the past decade. MasterCard, with 718.3 million cards, had 33% less in card sales than Visa last year, a wider gap than the 18% difference 10 years ago, according to the Nilson Report, a credit card newsletter.


– Bloomberg News


CREDIT REPORTS TO BE FREE IN N.Y. BEGINNING TODAY


WASHINGTON – Beginning today, people from coast to coast will be able to request free credit reports through a government-mandated program.


Overseen by the Federal Trade Commission, the program has been phased-in across the country, beginning last December in 13 Western states.The rollout then moved to the Midwest, South, and, today, it extends to 14 Eastern states, the District of Columbia, Puerto Rico, and all American territories.


The program allows consumers to request a free credit report each year from any of the three major credit bureaus – Equifax, Experian Information Solutions, and TransUnion. The free reports were mandated by Congress as part of consumer privacy legislation. They are intended to help consumers looking to buy homes or apply for loans or those worried about identity theft.


The last 14 states the program will include today are: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia.


– Associated Press


PROVIDIAN SHAREHOLDERS ACCEPT $6.5B WASHINGTON MUTUAL BID


SAN FRANCISCO – Providian Financial’s shareholders accepted Washington Mutual’s $6.5 billion takeover bid yesterday, brushing aside concerns that one of the nation’s last independent credit-card lenders could have been sold for a higher price. A total of 197.5 million Providian shares, or 67% of the common stock outstanding, supported the deal, clearing the way for Washington Mutual to complete the acquisition October 1.


– Associated Press


TRADE


AMERICA LOSES 2.4% OF JOBS DUE TO TRADE DEFICIT


The American economy lost no more than 2.4% of its jobs as of 2003 because imported goods and services exceeded exports, according to estimates by staff economists at the Federal Reserve Bank of New York. The figure represents the “net effect of trade on the nation’s employment,” or the difference between the number of American workers that would be required to produce all imports and those needed to produce exports, economists Erica Groshen, Bart Hobijn, and Margaret McConnell wrote in an article published today by the New York Fed.


– Bloomberg News


AMERICA, CHINA END TRADE NEGOTIATIONS WITHOUT AGREEMENT


BEIJING – American and Chinese trade negotiators ended two days of talks yesterday without an agreement resolving the dispute over widening volumes of Chinese-made textiles reaching America, a key source of friction between the two countries. Sources briefed on the talks said the two sides made little if any progress, with both governments unwilling to yield. China has demanded that the Bush administration lift emergency caps it imposed in May on eight categories of clothing and textiles. America has signaled it would do so only if Beijing agrees to accept slightly looser limits that would apply to a broader range of products. America has pushed for a deal that would run through 2008; China has called for a shorter pact.


The failure to compromise ensures that textiles will remain a primary irritant between the two countries. It also ensures that trade groups in America will intensify their campaign to restrict Chinese imports, leaving the textile industry in confusion: Major American retailers are now reluctant to place too many clothing orders with Chinese factories lest their shipments get ensnared in trade politics.


– The Washington Post


HEDGE FUNDS


BAYOU AND ITS FOUNDER ARE SUED


Bayou Management LLC and Samuel Israel III, founder of the Connecticut-based hedge fund, were sued by an investor and a creditor seeking at least $4.5 million in unpaid debts authorities say may be part of a $440 million fraud. South Cherry Street LLC, a Denver-based investor, claims in an August 26 complaint that Bayou didn’t return its $1.5 million in the Bayou Accredited Fund LLC as promised in letters in July and August. Separately, Steven Starker claims Mr. Israel failed to repay a $3 million promissory note that came due July 15. Mr. Israel had borrowed the money a month earlier, according to the suit Mr. Starker filed on August 19.


– Bloomberg News


BONDS


HAWAII SOLD $10 BILLION IN BONDS WITHOUT COMPETITIVE BIDDING


As the city and county of Honolulu planned to sell $153 million of bonds last month, there was no question about who would set interest rates on the debt: Citigroup and UBS AG, the investment banks it had hired to sell bonds without using competitive bidding for the work. Hawaii, the ninth smallest American state by population, and its cities and authorities have sold more than $10 billion of bonds for roads, schools, and other projects since 1997, not once seeking bids at a public auction, according to data compiled by Bloomberg. That’s a stretch unrivaled by any other state. The practice may have cost taxpayers $6 million at Hawaii’s latest state sale alone, the data show.


– Bloomberg News


IN BRIEF


Ford will probably reduce its employee-pricing offers on 2006 models … India’s rupee had its biggest monthly drop since May last year on speculation record oil prices will increase the purchase of dollars by importers … The Pentagon’s largest bullet supplier, Alliant Techsystems said it will appeal a $1.2 billion award to rival General Dynamics for small-arms ammunition, claiming it offered a lower price … TIAA-CREF, the largest American retirement fund, said it may close as many as nine mutual funds after investors rejected fee increases that the company said were needed to make them profitable … Bank of America, the no. 2 American bank by assets, picked Omnicom Group for its advertising campaigns, dropping Interpublic Group of Companies after three years … Tiffany & Co., the world’s second-biggest luxury jewelry retailer, said second-quarter profit rose 53% after sales in Japan rose for the first time in two years.


– Bloomberg News

NY Sun
NEW YORK SUN CONTRIBUTOR

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.


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