What happened Tuesday

A review of things you need to know before you go home on Tuesday; ASB cuts, Yellow Pages staggers on, ASB's credit rating adjusted, NZF echo, Westpac sells, swaps fall, NZD stable

16th Jun 15, 4:00pm by David Chaston

Here are the key things you need to know before you leave work today.

TODAY'S MORTGAGE RATE CHANGES
ASB cut all its fixed-term home loan rates for 6 month to 4 year terms by up to 50 basis points late last night.

TODAY'S DEPOSIT RATE CHANGES
There have been no changes announced so far today, but we understand there will some tomorrow.

DISCONNECTED ?
Farm sales are not yet suffering from declining prices. Even dairy farm sales aren't despite recent low milk prices. At a median of $58,049/ha in Taranaki, this is close to equaling the median high for dairy land anywhere since July 2010. (The all time record high was $66,490/ha also in Taranaki, in August 2009.) There were 161 farms sold in May.

YELLOW PAGES STAGGERS ON
The directories business that once upon a time was sold by Telecom for $2.2 billion, has confirmed another debt restructure, something that has been on the cards for some time. But this time, chairman Brett Chenoweth assures us, it's different with Yellow now set up for sustainable success with no need to go through this process again (no Tui billboards please). Yellow says the restructure will convert ownership from $385 million of debt to debt and equity with a simpler debt facility and "materially" less debt. The business will be leveraged at about two times earnings before interest, tax, depreciation and amortisation. Yellow says it now has 12 debt holders with just five holding 78% of the debt. A recent BusinessDesk story listed York Global Finance, Varde Investment Partners, Morgan Stanley, Bennett Restructuring Fund, Bennett Offshore Restructuring Fund, Silver Point Luxembourg Platform, Macquarie Bank, SC Lowy Primary Investments, Merrill Lynch Capital Services, Staple Street Global Opportunities (Master) LP and Deutsche Bank, as being among Yellow Pages' creditors. Yellow Pages also says the new capital structure will allow it to meet IRD's new thin capitalisation rules that kick in on July 1.

MOODY'S LOWERS ASB'S STAND ALONE FINANCIAL PROFILE
Moody's has affirmed ASB's Aa3 credit rating, but downgraded the bank's baseline credit assessment to a3 from a2. The baseline credit assessment encapsulates an entity's stand-alone financial profile. The move comes following the adoption of new bank credit rating methodology by Moody's. It says the a3 takes into account ASB's sound capital position and strong asset quality metrics. But ASB is "sensitive to wholesale funding conditions" with debt securities comprising 28% of its total funding, which is a key rating constraint. Moody's has the same Aa3 and a3 ratings on ANZ NZ, BNZ and Westpac, and Aa3 and baa2 on Kiwibank. See credit ratings explained here.

FINCO ECHO
In a tough end to life, NZF has announced that Capital Note holders will receive approximately 12.7c in the dollar. No interest will be paid. Payment will be made before 30 June 2015.

CASHING DOWN, KEEPING CONTROL
Westpac is selling down part of its holding in BT Investment Management. It currently owns 59% and after the cash-out, it could have as little as 31%. Westpac will keep Brad Cooper as BTIM's CEO however.

GOODMAN GETS ITS FUNDS
Goodman's $100 mln senior secured bond offer has closed fully subscribed. They will pay investors 5.00% pa for the seven year issue.

WHOLESALE RATES
Swap rates fell -3 bps today across the whole curve. The 90 day bank bill rate also fell, but by -2 bps, to 3.29%.

NZ DOLLAR UNCHANGED
The NZ dollar is basically unchanged today. It is still at 69.9 USc, 90.1 AUc and 62 euro cents. The TWI-5 is at 73.6. Check our real-time charts here.

You can now see an animation of this chart. Click on it, or click here.

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Source: RBNZ

Source: CoinDesk

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4 Comments

by Stephen Hulme | 16th Jun 15, 4:43pm 1434429808

Moody's has affirmed ASB's Aa3 / P-1 credit ratings, reflecting the very high probability of support from its Australian parent, the Commonwealth Bank of Australia (CBA, Aa2 stable, a1). This is driven by ASB's significance to the overall group's operations, and the close regulatory and political ties between Australia and New Zealand.

The ratings also reflect the potential for systemic support to be extended to the bank in a systemic crisis. We view the likelihood of such support as moderate, given the expectations that ASB's parent would be the primary source of support. Our assessment of systemic support also reflects the importance of ASB, like its major bank peers, in funding New Zealand's net external liabilities, and the complexity of their resolution, if required. Read more

Can we have that in writing please? Plus a declaration that systemic support precludes unsecured creditor's capital compulsorily transformed into extinguished equity.

by Henry_Tull | 16th Jun 15, 5:22pm 1434432173

other talented underwriters include
http://www.independent.co.uk/news/business/profile-two-men-who-lost-a-b…

But opinions differ. 'I should think he's very clever - he looks intelligent and quick,' said Fernanda Herford, a Gooda Walker name facing losses of more than pounds 700,000. 'He's cocky, like a sparrow, and well dressed. A typical Essex man.' Another described him as 'shortish, balding with a prominent nose and bright little eyes'.

by notaneconomist | 16th Jun 15, 5:37pm 1434433034

And here's one on CO2 - 10kg fat converts to 8.4kgs of carbon dioxide and 1.6kg in water.......

http://www.sciencealert.com/this-is-where-body-fat-ends-up-when-you-los…
Despite society’s obsession with weight loss, a study has revealed that, surprisingly, most health professionals don’t actually know what happens to fat when we “lose it”.

The research conducted by a team at UNSW Science in Sydney calculated exactly what happens to our fat when we shed kilos, and revealed that doctor's leading theories are wrong - we don’t convert our missing mass into heat or energy, we breathe it out.

Their results, published in the British Medical Journal, reveal that 10 kg of fat turns into 8.4 kg of carbon dioxide, which is exhaled when we breathe, and 1.6 kg of water, which we then excrete through our urine, tears, sweat and other bodily fluids.

“The correct answer is that most of the mass is breathed out as carbon dioxide. It goes into thin air,” said lead author of the paper Ruben Meerman, a physicist and TV presenter, in a press release.

Meerman first became interested in the biochemistry of weight loss when he dropped 15 kg - but when he asked doctors where this weight went, he was surprised by the fact no one could tell him.

After surveying 150 doctors, dieticians and personal trainers, he discovered that more than half thought that fat was converted into heat or energy as we break it down.

But, as a physicist, Meerman knew that this would violate the Law of Conservation of Mass.

http://www.bmj.com/content/349/bmj.g7257

by cowboy | 16th Jun 15, 6:03pm 1434434603

head-desk.
"fat" is mass of glycogens etc and celluar tissue, it *can't* be _converted_ to heat or energy. Only the energy stored in the molecules can be released as system energy (through a process of oxidisation ie burning) which the body does by entering a ketosis state where the fat is released back into the bloodstream and burned in cells capable of the chemical reaction (usually muscles). the atoms and molecules themselves are merely rearranged...it's not like we have internal atom fission plants to do the conversion directly.
So where do the proceeds of the burning process go? with the remains of the cells doing the burning. back into the bloodstream, passed to lungs (for gas byproducts), liver for chemical processing, then into the kidneys and colon for other wastes. Which is why certain diets can cause buildups and cancers from toxic damage from celluar refuse.

the doctors and, dietitians and personal trainers are why I despair of people waving "education" around.