Business & Finance
Business and Finance
Business and Finance
Mon, September 27, 2010
Sun, September 26, 2010
Fri, September 24, 2010 Hartford Financial Services Group, Deutsche Bank, Lincoln National, Suncor Energy and Teck Resources
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Hartford Financial Services Group Inc. (NYSE: [ HIG ]), Deutsche Bank AG (NYSE: [ DB ]), Lincoln National Corp. (NYSE: [ LNC ]), Suncor Energy (NYSE: [ SU ]) and Teck Resources Limited (NYSE: [ TCK ]).
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Here are highlights from Thursdaya™s Analyst Blog:
HIG Warrants Estimated at $706M
Diluting its ownership in Hartford Financial Services Group Inc. (NYSE: [ HIG ]) on Wednesday, the US Treasury auctioned 52.1 million 10-year warrants at a sale price of $13.70 per warrant, thereby raising $706.3 million in the process. These warrants carried a minimum bidding price of $10.50 per warrant.
The sale is expected to close by September 27, 2010. Deutsche Bank Securities Inc. of Deutsche Bank AG (NYSE: [ DB ]) acted as the auction agent for the Dutch auction that was organized to price HIGa™s warrants.
After raising about $213 million from the auction of warrants of Lincoln National Corp. (NYSE: [ LNC ]) last week, the US Treasury is now attempting to recover HIGa™s share of cost that the US government had to incur during the recent financial crisis by lending about $700 billion to the US banks and financial companies, in order to bailout the crisis-hit companies.
However, the US Treasury had squeezed the funds received from the taxpayers in order to keep the US companies liquidated and solvent. Hence, warrants were also issued by such crisis-hit companies so as to gather additional return for the risk taken by the US Treasury.
Consequently, once the loan repayment is done by a company, the US Treasury liquidates its warrants by selling them back to the company or through public auctions. A warrant gives the purchaser the right to buy common stock at a fixed price or sometimes at steep discounts. HIGa™s warrants sanction the warrant-holders to purchase the HIG shares for $9.79 each, expiring on June 29, 2019.
The auction price of $13.70 means that the stock needs to be sold at $23.49 per share for an investor to recoup the $13.70 paid for the warrant and the option price of $9.79 per share.
Suncor-Tech JV for Wind Project
Canadaa™s premier integrated energy company, Suncor Energy (NYSE: [ SU ]), has paved the way to start the construction of the planned 88 megawatt (MW) Wintering Hills Wind Power Project in Alberta. The project was approved by the Alberta Utilities Commission (aAUCa) in June, 2010.
This wind power project is a joint venture of Suncor Energy and Teck Resources Limited (NYSE: [ TCK ]), with the former holding 70% operational interest and the remaining 30% being held by the latter. The financial terms of the deal were not disclosed.
The project involves the installation of 55 General Electric 1.6 MW turbines on a privately-owned land to the south east of Drumheller, Alberta. These turbines operating at full capacity will be able to generate adequate power for approximately 35,000 Alberta homes, counterbalancing the 200,000 tonnes of carbon dioxide emitted every year.
The project started in July 2010, and will likely be wrapped up by the year-end 2011.
Wintering Hills is so far the most crucial wind power project for Suncor, and we appreciate the companya™s unrelenting efforts in developing the renewable energy industry in Canada.
Alternative energy resources, particularly wind energy, are fast spreading across the globe, thanks to its eco-friendly nature as well as economic feasibility. Hence, Suncora™s investments in the power project highlight its determined focus on making Alberta pollution free.
Alberta-based Suncor Energy is involved in the operations of oil sands development and upgrading, conventional and offshore crude oil and gas production, petroleum refining and product marketing.
With a bundle of wind and oil sands projects, improved production outlook and cost saving initiatives, we expect Suncor to be in a beneficial position in the coming quarters.
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