BUSINESS BRIEFS
Freddie, Fannie shares soar as bank shares fall
Associated Press
WASHINGTON — Shares of Fannie Mae and Freddie Mac soared yesterday in a respite from their battering in recent days, while some regional banks saw their stocks sink on worries they could be swept up in the turmoil surrounding the mortgage finance giants.
Freddie completed a $2 billion debt sale, and a Wall Street analyst said a government bailout of the mortgage finance giants may not be inevitable.
But a few regional banks with significant holdings in Fannie and Freddie preferred stocks followed the rest of the market down amid questions over whether federal regulators would step in to rescue the two government-sponsored companies.
DELTA BORROWS $1B TO BUY NORTHWEST
Delta Air Lines Inc. said yesterday it has drawn $1 billion from a credit line to give it more financial flexibility as it heads toward completion of its buyout of Northwest Airlines Corp.
The Atlanta-based company, which disclosed that its liquidity declined by $600 million in July, also said it has reached a deal to extend an agreement with one of its credit card processors.
Delta's stock-swap deal to buy Eagan, Minn.-based Northwest is expected to close by the end of the year.
In a memo to employees late yesterday, Delta president and chief financial officer Ed Bastian said Delta had $3.7 billion in liquidity at the end of July, which compares with $4.3 billion at the end of June. The liquidity figures included the $1 billion credit line revolver, which Delta has now tapped.
CARIBBEAN STORM PUSHES OIL TO $115
NEW YORK — Oil prices ended a choppy session slightly higher yesterday, edging back above $115 a barrel after Tropical Storm Gustav formed in the Caribbean.
Light, sweet crude for October delivery rose 52 cents to settle at $115.11 a barrel on the New York Mercantile Exchange after earlier falling as low as $113.68. Trading was light heading into the Labor Day holiday now a week away, adding to the volatility that has characterized the market in recent days. Prices swung between $12 Thursday and Friday.
PRECISION DRILLING BUYS GREY WOLF
Canada's Precision Drilling will buy Grey Wolf in a cash and stock deal worth more than $2 billion, the companies said yesterday, apparently ending an extended fight for control of the Houston gas driller.
Grey Wolf shareholders had earlier spurned a rival offer from Basic Energy Services Inc., a well-site services company in Texas, that would have created a $2.9 billion company.
Under the new agreement, Precision will pay $1.12 billion in cash and 42 million shares valued at $896.7 million, based on Friday's closing stock price. The new offer involves less cash, but would give Grey Wolf shareholders a larger stake in the new company through a fatter share offering.
MORTGAGE FRAUD REPORTS UP 42%
NEW YORK — Reported incidents of mortgage fraud jumped 42 percent nationwide, with Florida reporting the most cases, according to industry data released yesterday.
Properties in the Sunshine State accounted for nearly a quarter of all mortgage fraud incidents, the Mortgage Asset Research Institute said. California ranked second, followed by a three-way tie for third among Illinois, Maryland and Michigan.
CARMAKERS BOOST FUEL EFFICIENCY
DETROIT — With gasoline still hovering around $4 per gallon, many car manufacturers are making far more than the usual tweaks to cars and trucks between model years to squeeze out one or two more miles per gallon and catch customers who increasingly rank fuel economy as a top factor when buying a vehicle.
Automakers say you can expect more of the same as they roll out new technology without waiting for full vehicle updates.
