European Markets Fall 2%, ING Offered to Repurchase Debts

Devan Biswas
12 Dec, 2011
New York City

European markets scaled back after investors focused on the immediate euro zone crisis. The decline in indexes was also accelerated after a ratings agency said it will review the ratings of the European Union nations. ThyssenKrupp agreed to sell its super yacht business.

[R]4:30 PM Frankfurt – European markets scaled back after investors focused on the immediate euro zone crisis. The decline in indexes was also accelerated after a ratings agency said it will review the ratings of the European Union nations. ThyssenKrupp agreed to sell its super yacht business.[/R]

European markets declined sharply after rallying for the last two trading days after the fiscal compact among the euro zone nations.

The lack of details about the fiscal compact and immediate steps to contain the widening debt contagion also weakened market sentiment.

In Paris trading CAC 40 Index dropped 1.9% or 60.60 to 3,111.75 and DAX 30 Index fell 2.5% or 146.85 to 5,839.86.

In other markets in the Europe, the benchmark index in Spain dropped 2.4%, in Italy fell 3.1%, in Greece decreased 2% and in Switzerland eased 0.5%.

The euro declined more than 1% to $1.323 after the rating agency Moody’s Investors Service said it will review the ratings of European nations as the last week’s summit was inconclusive in resolving the immediate crisis and failed to increase the rescue fund.

Greek finance minister Evangelos Venizelos confirmed that Greece is expected to complete its voluntary debt restructuring by the end of January. The debt restructuring is part of the €130 billion bailout program.

Venizelos said at a news conference, “The talks are critical and difficult and the country is asked to take important decisions and there is no room to lose focus.”

Stock Movers

ThyssenKrupp AG declined 64 cents to 17.37 and the company agreed to sell its super yacht business to UK based leveraged buyout group Star Capital for an estimated €150 million. The steelmaker sold the civilian yacht business as it focuses on the steelmaking and divests businesses worth €10 billion.

As a part of the deal, ThyssenKrupp will sell yacht builder Blohm+Voss Shipyard and ship repair unit and components maker subsidiary.

ING Groep N.V. declined 43 cents to €5.40 after the largest Dutch financial services company offered to repurchase debt and exchange to meet revised capital requirements.

ING offered to buy back debt of €5.8 billion of different maturities and for the prices between 58% and 87% of nominal values priced in the euro and the British pound.

In the U.S., ING offered to repurchase $2.5 billion in Tier 1 securities at 80 cents of the nominal value and in Europe the company offered to swap securities that are part of the Tier 1 and Tier 2 capital structure into unsecured debt.