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CARPETRIGHT Plc, the UK's largest carpet retailer, dropped to a four-year low in London trading after managers led by Chairman Philip Harris scrapped their 630 million-pound (US$1.2 billion) plan to buy the company. The shares fell as much as 11 percent to 785 pence in London, heading for the lowest close since December 15, 2003. They slid 18 percent on December 21 after the Rainham, England-based company said discussions had ceased, citing deteriorating credit markets. The announcement was made about two minutes before trading ended. Turmoil in the credit markets hampered the executives' ability to secure funding, Harris said. Bloomberg News reported the pace of takeovers worldwide had fallen by about a third since the end of the second quarter, with companies such as Virgin Media Inc and Cadbury Schweppes Plc delaying asset sales amid signs economic growth in countries from the US to Britain is ebbing. "The prospects for the group are undiminished given its market leading

CENTRO Properties Group, the Australian owner of US malls which lost 80 percent of its market value last week, has hired three advisers to help it refinance debt and negotiate funding options that may include selling assets. Lazard Carnegie Wylie will "facilitate any transaction" and find investors to help repay or settle bank debt, Jim Kelly, a spokesman for Centro in Sydney, said yesterday, Bloomberg News reported. KPMG will negotiate with Centro's bankers to help refinance A$3.9 billion (US$3.4 billion) by a February 15 deadline and Freehills will act as the company's legal advisers, Kelly said. Chief Executive Officer Andrew Scott said last week he may sell some of Centro's more than A$25 billion of shopping centers in the US, Australia and New Zealand after more than A$4 billion was wiped from the company's market value, making it Asia's worst casualty so far of the global credit squeeze. Melbourne-based Centro's eight most valuable properties are in Australia and

VISA Inc, the biggest credit-card company, had an US$861-million loss this year on US$2.65 billion in litigation costs, most from settling an antitrust suit brought by rival American Express Co. Legal expenses reversed gains for the San Francisco-based company. Revenue in the fiscal year ended September 30 rose 33 percent to US$5.19 billion, Visa said on Friday in a regulatory filing, Bloomberg News said. The loss compares with a profit of US$453 million in 2006, Visa said. Visa's November 7 settlement with American Express, the third-largest credit-card network, cleared the way for its planned initial public offering next year. The company wants to capitalize on consumers' growing preference for credit and debit cards over cash and checks. MasterCard Inc, the No. 2 network, has gained more than 400 percent since going public in May 2006. American Express sued Visa in November 2004 after the US Supreme Court ruled Visa and MasterCard violated antitrust laws by preventing

CITIGROUP Inc, Bank of America Corp, and JPMorgan Chase & Co have abandoned a United States Treasury-sponsored plan to buy assets from cash-strapped structured investment vehicles. The "SuperSiv" fund brokered by Treasury Secretary Henry Paulson, said to be about US$80 billion when it was announced in October, "is not needed at this time," the banks said. The need for a bailout has diminished as HSBC Holdings Plc, bond insurer MBIA Inc and other companies that manage SIVs arranged their own rescues. The steps lessened the threat that SIVs would dump their holdings and further affect credit markets suffering from losses in securities tied to subprime mortgages. New York's Citigroup said last week it would guarantee US$58 billion in debt from SIVs it manages in order to avoid a sale of the assets, Bloomberg News reported. More than 20 banks, SIVs and investment managers participated in the discussion with BlackRock Inc the adviser, the statement said. The banks

LEHMAN Brothers Holdings Inc, the largest US underwriter of mortgage-backed bonds, faces legal action by Australian municipal governments after the value of their subprime-related investments dropped as much as 86 percent. Wingecarribee Shire Council, in the Southern Highlands in New South Wales, is suing Lehman for "deceptive and misleading conduct" in selling A$3 million (US$2.6 million) of subprime-linked collateralized debt obligations, the council's managing director Mike Hyde said in a media statement yesterday. New York-based Lehman, which manages up to A$1 billion on behalf of 35 councils in New South Wales and Western Australia, may face further action as the assets in its US mortgage-linked product have declined amid a shakeout in global credit markets, Bloomberg News said. "We strongly deny the claims made in the press statement that we have not acted in their best interests, or that we have engaged in any misleading or deceptive conduct," Sinead

DAITO Trust Construction Co's founder is set to sell his stake in the company through an auction, which may lead to Japan's largest takeover involving private equity firms, insiders said. Katsumi Tada, chairman of Daito Trust, Japan's fourth largest developer by market value, owns 29 percent of the company, according to regulatory filings, Bloomberg News reported. The first round of bids will close at the end of this month, said the insider. The buyer, most likely a private equity fund, may approach other shareholders to purchase the rest of the company, leading to a transaction worth about 700 billion yen (US$6.2 billion). Daito Trust jumped 18 percent yesterday in Tokyo trading, giving the company a market value of US$7.1 billion. "The chairman has expressed his intention to retire and he probably wants to sell his shares after the company's value has grown," said Yoji Otani, a Tokyo-based analyst at Credit Suisse Group. Tokyo-based Daito Trust rose 1,000 yen to

MERRILL Lynch & Co and CLSA Ltd are among six investment banks set to arrange State Bank of India's US$4.2 billion share sale, three people familiar with the plan said. Citigroup Inc, Deutsche Bank AG, Kotak Mahindra Capital Co and SBI Capital Markets Ltd may also underwrite the rights offer by the Mumbai-based bank, India's largest, the people said, declining to be identified before a formal announcement. State Bank's closest rival, ICICI Bank Ltd, led a record year for share sales by Indian companies as lenders raised funds to meet accelerating credit demand in the world's fastest-growing major economy after China. Merrill is the top-ranked adviser for a third year in India as companies sold US$25 billion of stock, Bloomberg News said. "The share sale will be made easier with economic and banking sector growth still strong," said R.K. Gupta, who manages US$100 million at Credit Capital Asset Management Ltd in New Delhi.

UNITED States stocks have had the biggest weekly decline in a month after a Federal Reserve interest-rate cut and the biggest coordinated effort since 2001 to provide banks with cash failed to assuage concern that the economy will contract. Washington Mutual Inc led banks, brokerages and other financial firms to the steepest decline among 10 industries in the Standard & Poor's 500 Index. Circuit City Stores Inc, Sears Holdings Corp and Amazon.com Inc retreated on speculation that holiday sales at retailers will fall short of estimates, Bloomberg News said. Shares declined even after central bankers in North America joined those in Europe to inject money into the financial system and alleviate gridlock in credit markets. Reports that showed accelerating inflation caused concern that the Fed will be unable to cut interest rates more to prop up growth. "A recession is in the works," Andy Engel, who helps run the US$1.81 billion Leuthold Core Investment Fund that has

CITIGROUP Inc will take over seven troubled investment funds and assume US$58 billion of debt to avoid forced asset sales that would further erode confidence in capital markets. Moody's Investors Service lowered the bank's credit ratings. The biggest US bank by assets will rescue the so-called structured investment vehicles, or SIVs, taking responsibility for their US$49 billion of assets, the New York-based company said in a statement. Citigroup follows HSBC Holdings Plc, Societe Generale SA and WestLB AG in bailing out SIVs to avert fire sales of assets, Bloomberg News reported. The funds, which sell short-term debt and invest the proceeds in higher-yielding securities, have cut their holdings by more than 25 percent since August to US$298 billion, according to Moody's. The decline may reduce the urgency for a bailout sponsored by the US Treasury, Citigroup, Bank of America Corp and JPMorgan Chase & Co. "That was really the last major outstanding piece of the SIV

BOC Aviation, Bank of China Ltd's aircraft-leasing unit, aims to buy up to US$2 billion worth of planes that airlines have ordered and are unable to finance with bank loans because of the global credit squeeze. Asia's biggest lessor plans to more than double aircraft purchases from airlines next year from the US$700 million it bought in 2007, according to Chief Executive Officer Robert Martin yesterday. The Singapore-based company received a US$1-billion credit facility, its largest loan, from Bank of China this month at a rate lower than it would get from other banks, he said. "With issues that are hitting financiers in Europe and US related to subprime, we are now seeing a slowing down of liquidity growth in Asia as well," Martin said yesterday, according to Bloomberg News. "With a financing market that is going to be tighter, this is the right time for us to go back to the sale and leaseback market." A surge in borrowing costs that prompted the US

VIKRAM Pandit, Citigroup's newly appointed chief executive officer, may cut costs and sell assets to shore up capital in the face of growing mortgage losses. "Nothing is off the table," Pandit, 50, said in an interview, reported by Bloomberg News. Each of Citigroup's businesses will be scrutinized "objectively and dispassionately" as part of a "front-to-back review" of expenses and productivity, he said. Citigroup picked Pandit, a former Morgan Stanley president who joined less than six months ago, to succeed Charles O. Prince, who was forced to step down when the biggest US bank said mortgage-related writedowns may reach US$11 billion in the fourth quarter. Citigroup's credit rating - currently AA from Standard & Poor's - is being reviewed for a possible downgrade. "Citi is the worst-capitalized bank of its peers by a longshot," CIBC World Markets analyst Meredith Whitney said in an interview. Citigroup, based in New York, has faced

THE Federal Reserve plans to ease "elevated" short-term funding pressures by injecting cash to banks through auctions and providing US$24 billion in currency swap lines to the European and Swiss central banks. The Fed is coordinating the measures with the European Central Bank, Bank of England, Bank of Canada and Swiss National Bank, the Fed said in a statement in Washington yesterday. The Fed will auction term funds to banks against a "wide variety of collateral." All "generally sound" institutions can participate, the statement said. The central banks are taking the steps after demand for cash sent borrowing costs climbing. The Fed's previous attempts to ease the credit squeeze that began in August have failed to have lasting effects. One gauge watched by central bankers, the three-month dollar London Interbank Offered Rate, rose to 5.15 percent a week ago, the highest in almost two months, Bloomberg News said. "By allowing the Federal

EUROPEAN stocks have risen for a second week, boosted by expectations the Federal Reserve will lower interest rates and after the United States government moved to avert further defaults in the housing industry. Royal Bank of Scotland Plc led gains in banks after the lender wrote down 1.5 billion pounds (US$3 billion) of credit assets, in line with analysts' estimates. Xstrata Plc paced mining stocks higher amid takeover speculation in the industry. The Dow Jones Stoxx 600 Index added 0.7 percent to 372.88 last week. The measure rose to its highest in a month as investors speculated the Fed will lower its benchmark lending rate this week and after the Bank of England cut interest rates for the first time in two years, Bloomberg News said. "Investors have been cheered in recent days by signs that the authorities recognize the downside risks to their economies and are acting decisively to address them," said Richard Scott, who helps oversee about US$2.4 billion at Iimia

BANK lending to UK commercial real estate investors and developers could fall by 22 percent and erode profit as banks try to cut risk, JPMorgan Chase & Co said. If the British property recession of the early 1990s is repeated, losses on real estate could force banks to cut lending by 102 billion pounds (US$207 billion), London-based banking analysts Carla Antunes da Silva and Ashley Stuart have said in a note to clients. More than four pounds out of every 10 pounds currently being lent by banks in the UK is for real estate and construction. The long-term average is less than three pounds. Shop and office prices are falling after peaking earlier this year, as the impact of credit market upheaval and higher interest rates takes effect, Bloomberg News said. "There will clearly be a contraction in credit availability," the analysts said. "The magnitude of this contraction and the impact of this on available funding and on investor psychology is extremely difficult to

FALLOUT from the United States housing slump may affect European economic growth, European Central Bank board member Christian Noyer said yesterday. In the strongest warning yet from an ECB official that the 13-nation euro area is at risk from the US subprime mortgage drop, Noyer said optimism among consumers and executives in the economic outlook is already deteriorating. "There may be a question mark over our hopes that Europe could decouple" from the US, Noyer told the Euromoney Euro Fixed Income Forum in Paris yesterday. The US housing recession has made banks reluctant to lend to each other, pushing up borrowing costs around the world, said Bloomberg News. Credit conditions have worsened in the past three weeks as more than US$50 billion of writedowns linked to defaults on mortgages stoke concern about the strength of financial institutions. Noyer said banks will be exposed to a "triple shock" of unwanted growth in their balance sheets, higher costs of

ASIAN stocks rose, trimming the biggest monthly decline in more than a year, after Federal Reserve chairman Ben Bernanke reinforced speculation that United States policymakers would cut borrowing costs to bolster growth. The Commonwealth Bank of Australia led gains by banks after Bernanke said policymakers must decide whether "renewed turbulence" in credit markets had damped growth prospects in the world's biggest economy, according to Bloomberg News. BHP Billiton Ltd rose to a three-week high after copper prices climbed, with the commodities industry group advancing the most in the MSCI Asia Pacific Index. "A rate cut is being viewed as more likely," said Nicole Sze, an investment analyst in Singapore at Bank Julius Baer & Co, which manages US$350 billion in assets. "That will provide short-term relief to the market because there have been concerns about the risks that might result if credit costs remain high." The MSCI index added 1.1 percent

FORTIS, part of a group that bought ABN Amro Holding NV in Europe's biggest banking takeover, plans to raise 2.5 billion euros (US$3.7 billion) by selling bonds convertible into shares to help finance the deal. The bonds will have no stated maturity and will pay a coupon of 175 basis points to 250 basis points more than the euro interbank offered rate, or Euribor, Fortis said yesterday via email. They can be exchanged for shares when the stock rises 30 percent to 35 percent from current market prices, Bloomberg News reported. Fortis, based in Brussels and the Dutch town of Utrecht, is rebuilding its capital base after it joined Royal Bank of Scotland Group Plc and Banco Santander SA in the 71.5-billion-euro acquisition of Amsterdam-based ABN Amro, the biggest Dutch bank. Fortis sold 13.4 billion euros worth of stock in October, got a 10-billion-euro credit line and has sold bonds and assets to help fund its part of the deal. "We are somewhat surprised regarding the timing

ZOE Cruz, co-president of Morgan Stanley and Wall Street's highest-paid female executive, has been ousted three weeks after the firm disclosed US$3.7 billion of losses on mortgage-related securities at the division she oversaw. Cruz, 52, was viewed by analysts as a leading candidate to succeed Chief Executive Officer John Mack, Bloomberg News reported. Her departure adds to the list of banking executives who have lost their jobs amid more than US$50 billion of credit losses tied to subprime home loans. Warren Spector, the former co-president of Bear Stearns Cos, was forced out in August, followed by Merrill Lynch & Co CEO Stan O'Neal and Citigroup Inc chief Charles O. "Chuck" Prince III. "In this environment, if things happen on your watch, then the door is where you are pointed," said Ken Crawford, who helps oversee US$950 million at St Louis-based Argent Capital Management, which holds Morgan Stanley shares. "At investment banks of late, it's hard to say

ASIAN stocks fell for the first time in three days after South Korea's president cleared the way for a probe into Samsung Group and Goldman Sachs & Co said HSBC Holdings Plc may have to increase writedowns. Samsung Electronics Co, South Korea's biggest company, dropped the most in three weeks after President Roh Moo-hyun accepted law makers' demand for an investigation into bribery allegations, Bloomberg News said. HSBC, Europe's biggest bank, fell to a 20-month low before paring losses. "There's not much hopeful talk in the market," said Eom Giyo, who helps manage the equivalent of US$3.2 billion at Woori Credit Suisse Asset Management Co in Seoul. "Writedowns are increasing at financial institutions, and now we hear allegations of bad accounting at Samsung Group." The MSCI Asia Pacific Index slid 0.1 percent to 158.30 as of 5:32pm in Tokyo, trimming an earlier fall of as much as 2.1 percent. Japanese shares advanced, lifting the Nikkei 225 Stock Average by

UNITED States stocks posted their third weekly drop this month last Friday after the Federal Reserve reduced its economic growth outlook, Freddie Mac reported a record loss and Lowe's Cos slashed its profit forecast. Freddie Mac plunged the most since going public in 1988 and led financial shares lower after losses on mortgage securities prompted it to seek a capital infusion. Lowe's, the second-largest home-improvement retailer, fell the most in five years after same-store sales slipped for the fifth straight quarter. Miners and computer-related companies also fell amid speculation that tighter credit and weak consumer spending will slow the world's largest economy through next year. The Fed cut its 2008 growth forecast to as low as 1.8 percent, down from the 2.5 percent to 2.75 percent anticipated in June, Bloomberg News said. "The housing overhang continues to be a major problem for the economy," said Barry James, who helps manage about US$2.1 billion as president