Financial Biz Recap: Alibaba’s Loan, Canadian Bank Downgrade
Credit Suisse (NYSE:CS), DBS Bank, Deutsche Bank (NYSE:DB) and Mizuho Corporate Bank are arranging a $4 billion loan for Alibaba (ALIBIY.PK), sources say. Alibaba is considering acquisition options related to Yahoo (NASDAQ:YHOO). They are trying to bring in some Chinese lenders to the group to help underwrite the loan and spread the risk of the facility.
BMO Financial Group (NYSE:BMO), The Bank of Nova Scotia (NYSE:BNS), Canadian Imperial Bank of Commerce (NYSE:CM), Manulife Financial Corporation (NYSE:MFC), Royal Bank of Canada (NYSE:RY), Sun Life Financial Inc. (NYSE:SLF) were all downgraded by Barclays’ John Aiken. The Canadian financial services sector was downgraded to neutral, expecting domestic and global headwinds to cut into earnings growth. “The steam is dissipating from the Canadian economic engine, with greater downside risk (than forecast),” he writes.
Investing Insights: Bank of America Upgrade Pushes Shares Up 7%.
State Street (NYSE:STT) is called by Goldman Sachs (NYSE:GS), a buying opportunity on valuation, with the pace of 2012 earnings per share revisions stabilizing more quickly than the overall sector. Goldman sees a “modest” downside to Northern Trust (NASDAQ:NTRS), whose cost-cutting program “will take several years to implement.”
Citigroup’s (NYSE:C) Keith Horowitz states a Buy rating on Bank of America (NYSE:BAC). Up to an additional $32 billion could be needed to address mortgage-related losses, but “when you factor in the earnings power and the time it will take to resolve these issues, it appears to be manageable.” Shares are already pricing in a large equity offering, Horowitz adds.
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