Co-op loses control
Debt deal
Co-operative Group appears to have been forced into a climbdown over its planned refinancing of the troubled Co-operative Bank, which will see the mutual organisation hand over a significant chunk of the bank to its debt holders. Originally, Co-op Group proposed a debt for equity swap which would have seen it retain 75 per cent ownership, but the two main debt holders - US hedge funds Aurelius Capital Management and Silver Point Capital - are believed to have forced Co-op into retaining just 30 per cent in return for their support for the £1.5bn recapitalisation. Retail bondholders are expected to be offered new bonds in the recapitalised bank. Full details are expected in the coming days.
Building in Spain
Gates bets big
Billionaire Microsoft founder Bill Gates has emerged with a surprise 6 per cent stake in Spanish builder FCC for which he paid €113.5m, making him the second biggest shareholder in the company behind chairman Esther Koplowitz. Like its peers in the Spanish construction industry, FCC has been through the mill in recent years as the near collapse of the Spanish economy wreaked havoc across the sector. FCC has sold off assets to shore up its balance sheet, but still has delicate negotiations to conclude with lenders to refinance around €5bn of debt falling due this year and next.
US wobble
Data undershoot
Despite resolving the federal budget impasse, albeit temporarily, all is not well in the US economy. It is still recovering, but the latest data places doubt on the pace and strength of that recovery. This week's jobs figures for September in the US undershot expectations, with 148,000 jobs created in the month against expectations of 180,000 and the jobless rate standing at 7.2 per cent. Meanwhile, existing homes sales dipped by 1.9 per cent in September as affordability concerns kicked in. With the next round of monthly figures likely to be skewed by the Federal shutdown, a clearer picture is unlikely to emerge before the year-end, meaning tapering of quantitative easing looks to be off the agenda until early 2014 at the earliest.
$100 men
Top CEO's pay rises
For the first time ever, the 10 best paid chief executives in North America in 2012 all earned more than $100m, with the top two each earning more than $1bn, according to research by GMI Ratings. The 10, all of whom were men, boosted their basic earnings with hefty stock options, with energy company boss Richard Kinder of Kinder Morgan taking home a nominal $1 in pay, but selling $1.1bn worth of restricted stock. Top of the pile was Facebook founder Mark Zuckerberg, who topped up his $503,205 basic salary with stock sales that pushed his total compensation to $2.27bn. Meanwhile, average chief executive pay among the Russell 3000 company bosses, which covers 98 per cent of US-quoted companies, rose by 8.47 per cent, but among the more elite Russell 1000 average pay rose by 15.47 per cent.
Tablet tussle
New iPad
US technology giant Apple this week unveiled its latest generation iPad and iPad Mini tablet computers as it looks to cement its place as the leader in a market it effectively created. The new lighter, thinner and more powerful iPad Air and its smaller version represent the first significant redesign of the iPad since its 2010 launch. The segment has become incredibly crowded in the past three years with almost all major electronics manufacturers plus retailers such as Tesco and Argos launching tablet computers, mostly running on Google's Android operating system and tablet sales are expected to outperform PCs and laptops this Christmas. Apple's announcement overshadowed this week's launch of the first Nokia tablet and an update to Microsoft's Surface tablet computer.
More stress for banks
ECB tests
European banking stocks took a hit this week after the European Central Bank (ECB) detailed the stress tests it requires the European banks to undergo before it takes over their regulation next year. The ECB will oversee 130 banks next year and will require them to have Tier-1 capital ratios of 8 per cent, and says the stress tests will cover 85 per cent of the banking assets held in Europe. Fears rose that some banks will struggle to meet to criteria and will need to raise capital to plugs gaps, and either national governments or the eurozone itself could end up on the hook after the ECB said the "availability of backstops is critical".
