Columbia Bank's parent to get federal loan funds
Fulton Financial Corp., the parent of Columbia Bank, announced yesterday that it will receive $375 million from a federal program designed to spur lending. Fulton, of Lancaster, Pa., said it received preliminary approval from the U.S. Treasury under the government's $700 billion Troubled Assets Relief Program, which sets aside $250 billion to inject cash into banks in exchange for shares. Fulton will sell senior preferred stock and warrants to purchase common stock to the Treasury in exchange for the cash. R. Scott Smith, Fulton chairman, chief executive and president, said the government's investment will enhance the company's "capability to meet our customers' borrowing needs." Smith said the company is well-capitalized. Fulton also operates Hagerstown Trust Co. and Peoples Bank of Elkton.
EDF chief briefs French panel on Constellation
The head of Electricite de France SA spoke to a parliamentary commission of France's National Assembly yesterday about its involvement with Constellation Energy Group. Pierre Gadonneix, the chief executive officer of EDF, confirmed the company has started talks with Constellation to buy half of the U.S. utility owner's nuclear business, challenging an agreed takeover by Warren Buffett's MidAmerican Energy Holdings Co. "Our offer responds to the needs of Constellation," Gadonneix told the commission. He said he was optimistic about winning over shareholders of Baltimore-based Constellation, the largest U.S. power marketer and owner of five nuclear reactors and utility Baltimore Gas & Electric. EDF holds the most common stock, with a 9.5 percent stake. EDF offered Dec. 3 to buy a 50 percent interest in Constellation's nuclear plants for $4.5 billion. MidAmerican has agreed to pay $4.7 billion for the whole company, or $26.50 a share. Constellation said it will discuss the rival offer even though its board hasn't changed its recommendation that shareholders vote for the MidAmerican deal at a special meeting Dec. 23. Gadonneix said it's "unlikely" that the meeting of Constellation shareholders will be canceled. "If the shareholders' meeting agrees to the MidAmerican offer," he said, "then ours won't be accepted."
Airline performance improves in October
ATLANTA : U.S. airlines' on-time performance and baggage handling improved in October, and the carriers overall posted a lower rate of domestic cancellations compared to the same month a year ago, the Transportation Department said yesterday. Regional carrier Atlantic Southeast Airlines had the worst on-time performance in October, while regional carrier Pinnacle Airlines had the best. The DOT's Bureau of Transportation Statistics said the 19 carriers reporting on-time performance recorded an overall on-time arrival rate of 86 percent in October, higher than the 78.2 percent recorded a year earlier and the 84.9 percent recorded in September of this year. For discount carriers, Southwest Airlines had the best on-time arrival rate in October, at 89.6 percent, good for fourth-best overall.
Mortgage rates foreseen under 4%
WASHINGTON: Government efforts to provide easier credit to consumers and to help housing finance companies could push mortgage rates "well below 4 percent," a federal regulator said yesterday. James Lockhart, whose agency oversees government-controlled mortgage giants Fannie Mae and Freddie Mac, made the comments at a meeting of Women in Housing & Finance, an industry group. He did not say how long it would take to achieve such a drop and has declined to provide a firm target for mortgage rates. Rates fell sharply after the Federal Reserve announced plans late last month to buy up to $600 billion of mortgage-related securities and other debt issued by Fannie, Freddie and the Federal Home Loan Banks. In the two banking days after the Nov. 25 announcement, the national average rate on a 30-year, fixed-rate mortgages dropped 0.28 percent, to 5.5 percent, according to financial publisher HSH Associates.
Crude oil prices rise on production cut rumors
COLUMBUS, Ohio : Oil prices rose in volatile trading yesterday after rumors spread that Saudi Arabia told major customers of significant production cuts. Prices quickly had given up strong early gains after the government reported U.S. gasoline inventories were well above expectations, suggesting that American motorists continue to drive less. Around midday, however, prices spiked close to 10 percent, the same time as the Saudi rumor began to float, said Phil Flynn, an analyst with Alaron Trading Corp. Light sweet crude for January delivery rose 3.4 percent, or $1.45, to settle at $43.52 a barrel on the New York Mercantile Exchange.