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16/09/08

AIG rescue at hand, government to take stake

NEW YORK (Reuters) - An $85 billion government rescue of insurer American International Group Inc looked increasingly likely on Tuesday to stave off a bankruptcy that would have thrown world markets back into turmoil. The Federal Reserve will extend AIG $85 billion in exchange for a nearly 80 percent stake to bail out the troubled insurance giant, a person briefed on the matter said.

Fed holds rates steady, spurning calls for cuts

WASHINGTON (Reuters) - The Federal Reserve held U.S. interest rates steady on Tuesday and showed little inclination to lower them soon, spurning calls for cuts from financial markets roiled by the bankruptcy of investment bank Lehman Brothers Holdings Inc . The central bank's unanimous decision left benchmark overnight rates at 2 percent, a level reached in April.

Canada maintains growth outlook despite turmoil

OTTAWA (Reuters) - Canadian Finance Minister Jim Flaherty sees no need to lower his forecast for the country's economic growth, despite a deepening global financial crisis and his expectation of a further slide in U.S. growth. Flaherty said in an interview with Reuters he was open to the idea of concerted action among policy makers in the world's most developed economies to manage the fallout from the failure of some of Wall Street's biggest firms.

Fed to lend $85 billion to AIG, take 80 percent stake

WASHINGTON (Reuters) - The U.S. Federal Reserve Board on Tuesday said the Federal Reserve Bank of New York will lend up to $85 billion to the American International Group in a plan aimed at saving the insurer from a "disorderly failure" that could wreak economic havoc. The Fed said under the two-year facility the U.S. government will receive a 79.9 percent equity interest in AIG and has the right to veto payment of dividends to common preferred shareholders in the deal, which has the full support of the Treasury Department.

Manulife seen eyeing AIG assets in U.S. upheaval

TORONTO (Reuters) - Canadian life insurance company Manulife Financial Corp could be well placed to pick off some business lines from American International Group if the troubled U.S. insurer has to sell them. Analysts say Manulife, the biggest life insurer in North America by market value, would at least consider acquiring AIG's U.S. variable annuity business, and Manulife executives have said they would like to enter the Japanese and Chinese wealth-management markets.

Teck, Fording confident in takeover proceeding

TORONTO (Reuters) - Teck Cominco moved to quell concerns about its $13.7 billion takeover of Fording Canadian Coal Trust on Tuesday, saying it believed financing for the deal was solid and that it had options if one of its lenders withdrew. "We are working hard to complete the financing by September 30, and we look forward to closing the deal," Teck Chief Executive Don Lindsay said on a webcast to address investors who have grown jittery about the $9.8 billion Teck is borrowing to finance the deal.

St Lawrence Seaway says union has strike mandate

OTTAWA (Reuters) - The company that runs the St Lawrence Seaway, the giant waterway that links the Great Lakes with the Atlantic Ocean, said on Tuesday its 445 unionized workers had voted in favor of giving their union a strike mandate but added it hoped to avoid a stoppage. The St. Lawrence Seaway Management Corp said it "continues to be confident" it can reach a new collective agreement with the Canadian Auto Workers union when talks start up again on October 6.

Toronto stocks end lower, rebound from early plunge

TORONTO (Reuters) - The Toronto Stock Exchange's main index rebounded late Tuesday to end down slightly, after sliding to its lowest level in almost two years, as investors fretted over the fate of U.S. insurer American International Group and the price of oil fell to a seven-month low. In a volatile session that threatened to build on Monday's 4 percent plunge, the S&P/TSX composite index briefly dove into bear market territory, before staging a rebound on the back of strengthening resources.

Canada dollar slips on soft commodities, bonds fall

TORONTO (Reuters) - The Canadian dollar fell against the U.S. dollar on Tuesday due to soft commodity prices, but managed to make up some ground late in the session as markets cheered a report of a possible bailout for troubled insurer American International Group . Canadian bond prices tumbled lower along with the larger U.S. market after the U.S. Federal Reserve held interest rates steady, and the AIG report surfaced.

Viterra office workers ratify new contract

VANCOUVER, British Columbia (Reuters) - Unionized workers at the head office of Canadian grain company Viterra Inc ratified a new contract on Tuesday, ending an 11-week strike. About 200 workers who provide support services at the company's headquarters in Regina, Saskatchewan, will return to their jobs on Monday, Viterra said.

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