MARKETS: Wall Street rose on Friday, recovering all the losses sustained after vote to #Brexit the EU and stocks around the globe also jumped after data showed U.S. job growth – @AceFinanceNews

#AceFinanceNews – July.08: Surprisingly strong U.S. jobs report sends global stocks soaring

Wall Street rose on Friday, recovering all the losses sustained after Britain’s surprise vote to leave the European Union, and stocks around the globe also jumped after data showed U.S. job growth in June accelerated more rapidly than even the most optimistic forecasts.

Divided Wall St. clings to view of one 2016 rate hike after jobs data – poll

Wall Street’s top banks were almost evenly split over whether the Federal Reserve would raise U.S. interest rates in 2016, with a poll following Friday’s strong jobs data showing a razor-thin majority expect the central bank to raise rates once by the end of the year.

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IMF: Christine Lagarde said on Friday she has nominated Tao Zhang, deputy governor of China’s central bank, to serve as an IMF deputy managing director effective Aug. 22 – @AceFinanceNews

#AceFinanceNews – July.08: IMF’s Lagarde nominates Chinese central banker as new deputy director

Assuming no objections from the IMF’s executive board, Zhang will succeed Min Zhu, who will step down from the position on July 25. Zhu also is a Chinese national who previously had served as deputy governor of the People’s Bank of China.

Zhang returned to the PBOC as deputy governor in 2015 after serving as the IMF’s executive director representing China for four years.

He previously served in several positions at the PBOC, including as head of the bank’s legal affairs department and as head of its financial survey and statistics department. He also has worked at the World Bank and the Asian Development Bank in the 1990s and early 2000s and has degrees from the University of California, Santa Cruz, and Tsinghua University in Beijing.

China holds 6.11 percent of the IMF’s voting power, the third largest share after the United States and Japan.

Mr. Zhang brings a strong combination of international economic expertise, public sector policymaking, and diplomatic skills,” Lagarde said in a statement. “He also has extensive experience with international financial institutions, excellent communication and negotiating skills, and a superb knowledge of IMF policies and procedures.”

Zhang will serve alongside three other IMF deputy managing directors: first deputy David Lipton, an American; Mitsuhiro Furusawa, a Japanese national; and Carla Grasso, who holds dual citizenship of Brazil and Italy and serves as the fund’s chief administrative officer.

(Reporting By David Lawder; Editing by Chizu Nomiyama and Phil Berlowitz)

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BRITAIN: Still think all banks are here to help you by lending you money at such advantageous rates well some built in ‘ #Brexit Flex ‘ so changes can be made to be more advantageous to the investors not the borrowers – ALWAYS READ THE SMALL PRINT Check yours NOW – @AceFinanceNews

#AceFinanceNews – July.08: Banks inked loan commitment flexibility on Brexit uncertainty

Bracing for the potential volatility that might follow a UK vote to leave the EU, some banks built clauses into commitment letters that would allow them to change financing terms (including increases to interest rates), if needed, to attract investors.

Even following the leave vote result, some underwriters sought to include features reminiscent of lending terms more common during the most recent credit crisis when a number of banks were forced to hold onto loans they could not sell.

A so-called “Brexit flex” in a commitment letter would allow for higher interest payments if market volatility soared after the June 23 vote, a banker said.

In times of volatility, the arrangers will want more broad flex language, since they may need to sweeten the pot to bring in lenders,” said Jessica Reiss, co-head of leveraged loan research at Covenant Review in New York. “Potential lenders are often more risk-averse in choppy markets and the ability to adjust certain terms is helpful in building a syndicate.

Some banks added an extra 25bp to 50bp of flex due to the vote, according to banker estimates.

Underwriters may also have the right to trigger a market material adverse change clause (MAC) due to the referendum that would allow banks to get out of their underwriting commitment due to extreme changes in market conditions.

MAC flexibility related to Brexit may not be available for underwriting commitments made after the results of the referendum became known, which is why banks are being so careful about pricing, said David Campbell, a partner in the banking division of law firm Allen & Overy in London.

FLEXIBLE FRIEND

The unanticipated result kept Brexit flex language alive immediately after the vote, although volatility has since subsided and relaxed the push to add the protective terms.

After the referendum, at least one bank sought to include a pricing flex keyed off of a loan index, where, if secondary loan trading levels fell, the underwriter could add in additional flex, one banker said. Some banks included this term in commitment letters during the credit crisis.

At least one other bank following the referendum sought to include pricing flex language in their commitment letter that would allow them to transfer unused flex from a loan to a bond, or vice versa; another tactic also used during the credit crisis, a banker said.

The referendum has affected both merger and acquisition transactions, and real estate deals, with some being pulled immediately after the vote, Campbell said.

As volatility in the loan market has diminished in the last week, the need for Brexit flex language has also decreased. Some financings currently in the works, but that may not come to market until September, are being pitched at levels in line with terms available before the vote, and in some cases even slightly tighter, a banker said.

Leveraged loan issuance of US$344bn in the first half of 2016 is down 16% from the same time period in 2015, according to Thomson Reuters LPC data. Low volume has allowed companies to take advantage of demand to come back to the market and lower their interest payments.

”[Banks] are still willing to underwrite, although underwriting terms have moved in the banks’ favor,” said Campbell. “Given the market volatility, banks aren’t prepared to commit to pricing in the way they would before the vote.”

(Reporting by Kristen Haunss; Editing By Michelle Sierra and Lynn Adler)

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WASHINGTON: Corporations Chevron, Exxon and their partners commit to $36.9 billion #oil expansion project in Kazakhstan, their biggest investment #oil prices collapsed two years ago – WSJ – @AceFinanceNews

#AceFinanceNews – July.07: Corporations Chevron, Exxon and their partners commit to $36.9 billion #oil expansion project in Kazakhstan, their biggest investment #oil prices collapsed two years ago – WSJ

http://on.wsj.com/29numcj

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LOS ANGELES: California would get an additional $86 million from #Volkswagen in a deal over civil penalties stemming from the company’s emissions cheating scandal – AP – @AceFinanceNews

#AceFinanceNews – July.08: Volkswagen Agrees To Pay California $86M More In Scandal

California would get an additional $86 million from #Volkswagen in a deal over civil penalties stemming from the company’s emissions cheating scandal.

State Attorney General Kamala Harris and Volkswagen asked a judge Thursday to approve the settlement. The money would be on top of more than a billion dollars that Volkswagen previously agreed to pay for investments in zero-emissions technology and environmental mitigation in California.

That figure was part of a $14.7 billion settlement announced last week that includes compensation for the majority of affected #Volkswagen vehicle owners. #Volkswagen is still facing billions more in fines and penalties as well as possible criminal charges.

The automaker has acknowledged that vehicles were programmed to turn on emissions controls during government lab tests and turn them off while on the road.

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MARKETS: BRITAIN: FTSE 100: Top index rises on Friday trying to recover the last three weeks loses – Reuters – @AceFinanceNews

#AceFinanceNews – July.08: FTSE 100 rises but faces weekly loss

Britain’s top share index rose on Friday, lifted by mining stocks, although mounting signs of an economic hit from the country’s vote to quit the European Union still left it facing its first weekly loss in three weeks.

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MARKETS: European shares steady following rise in mining stocks, but some major stock indexes set for biggest weekly percentage drop since February – Reuters – @AceFinanceNews

#AceFinanceNews – July.08: European shares steady following rise in mining stocks, but some major stock indexes set for biggest weekly percentage drop since February – Reuters

http://reut.rs/

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