Acquisition Creates Global Scale and Offers Revenues and Cost
Synergies, Complements Alphatec Spine's Product Portfolio and
Enhances Aging Spine Focus Combined Entity to be Third-
Largest Global Pure-Play Spinal Implant Company
Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of Alphatec Spine, Inc., a medical device company that designs, develops, manufactures and markets products for the surgical treatment of spine disorders, with a focus on treating conditions affecting the aging spine, announced today that it has entered into a definitive agreement to acquire Scient'x Groupe SAS, a spinal implant company headquartered in France.
The transaction is structured as an all stock transaction such that 100% of outstanding Scient'x stock will be exchanged pursuant to a fixed ratio for 24 million shares of the Company's common stock. On a pro forma basis, current Alphatec shareholders will own approximately 69% of the combined company and approximately 31% will be held by current Scient'x shareholders. The transaction is currently expected to close by the end of the first quarter of 2010 and is subject to the approval of the Company's shareholders. Subject to the closing of the transaction, the Company expects 2010 pro forma full-year revenues to be in a range of $220 million to $225 million, and pro forma full-year 2010 adjusted EBITDA to be in a range of $32 million to $35 million. The transaction is expected to be neutral to slightly positive to 2010 EPS and accretive to 2011 EPS, excluding amortization of intangible assets, transaction expenses and related restructuring charges. The Company has absorbed transaction-related costs that had a negative impact to EPS in the third quarter and are expected to negatively impact previously issued EPS guidance for the fourth quarter of 2009. The Company also expects to absorb additional transaction-related expenses in the first quarter of 2010.
The combined company will create the third-largest independent spinal company with a global span of product distribution. Scient'x is the largest privately held independent spine company outside of the United States with product distribution in over 50 countries.
The transaction was unanimously approved by a Special Committee of independent members of the Company's Board of Directors. Following such approval by the Special Committee, the Company's Board of Directors unanimously approved the acquisition agreement. Thomas Weisel Partners LLC acted as exclusive financial advisor to the Special Committee and provided a fairness opinion to the Board of Directors that the transaction was fair to the Company from a financial point of view as of the date of this press release. DLA Piper LLP (US) acted as independent counsel to the Special Committee.
The Company believes that the strategic merit of the combined business includes the following benefits to its shareholders:
* Increases scale and global presence in all major geographic markets
* Provides cross-selling opportunities in major markets to leverage
future growth across core spine products and Aging Spine products
* Strengthens and expands the Company's product portfolio with
differentiated products in all segments
* Enhances the Company's ability to educate, train and service its
spine surgeon customers
* Provides cost synergies in distribution, marketing and
administration infrastructure
* Diversifies potential future U.S. healthcare reform and regulatory
risks
Both the Company and Scient'x operate in the high growth spinal implant market. The worldwide spinal implant market in 2009 is estimated to be $8.5 to $9.0 billion with a long-term growth rate that is estimated to be between 10% and 12%.
"We believe that Scient'x is a perfect complementary strategic fit for Alphatec Spine," stated Dirk Kuyper, Alphatec Spine's President and Chief Executive Officer. Mr. Kuyper continued, "Besides the significant cost and revenue synergies the acquisition offers, Alphatec Spine will now have the opportunity to reach 50 international markets with our aging spine and core fusion technologies. This transaction moves us into position to be able to become one of the top global spine companies."
"I am pleased to have the opportunity to work closely with Oliver Burckhardt again, following our time together at Aesculap Inc. He will be instrumental in overseeing our international sales efforts and will lead the strategic marketing direction of the combined company. We believe that the combination of Alphatec Spine and Scient'x creates a complete and broad product portfolio with differentiated products addressing underserved markets with disruptive technologies," continued Mr. Kuyper.
"I am excited to be joining the Alphatec Spine team," stated Oliver Burckhardt, Scient'x's President and Chief Executive Officer. "We believe that the combined product portfolio will be among the most innovative of any spine company in the market," Mr. Burckhardt continued, "At Scient'x, we have created a global distribution network in over 50 countries with an excellent history of broad surgeon training and education that will help to drive shareholder value. We look forward to introducing Alphatec Spine's products to our customers as well as leveraging Alphatec Spine's strong U.S. presence with Scient'x's technology."
Conference Call
Alphatec Spine will host a conference call today at 1:30 p.m. PT / 4:30 p.m. ET to discuss details of the acquisition. To participate in the conference call, please visit the investor relations section of the Alphatec Spine website at www.alphatecspine.com. The dial-in numbers are (888) 510-1762 for domestic callers and (719) 325-2383 for international callers. A live webcast of the conference call will be available online from the investor relations section of the Alphatec website at www.alphatecspine.com. The webcast will be recorded and will be available on the investor relations section of Alphatec Spine's website, for at least 30 days after it is posted.
About Scient'x
Scient'x is a Guyancourt, France based medical device company that designs, develops and manufactures spinal implants and instrumentation. Scient'x was founded in 1988 and offers today a full range of implants for spinal fusions, posterior semi-rigid stabilization and a cervical total disc replacement device. Its international distribution network consists of a direct sales force in France and the U.K., a hybrid of direct sales force and distributors in Italy as well as exclusive and non-exclusive distributors in more than 50 countries including the United States. The Scient'x surgeon education and training network augments its international distribution capabilities.
Scient'x key products includes the Isobar(TM) TTL and Isobar Evolution(TM) rods, a semi-rigid rod technology used in spinal fusion surgeries, as well as an offering of cervical and lumbar implants also used predominantly in spine fusion surgeries. The Isobar(TM) products are 510(k) cleared by the FDA in the U.S. as an adjunct to fusion. Outside of the United States, Scient'x markets also a unique and proprietary ceramic-on-ceramic cervical total disc replacement device, DiscoCerv(R), which has been implanted in over 3,000 patients since its initial launch.
About Alphatec Spine
Alphatec Spine, Inc. is a wholly owned subsidiary of Alphatec Holdings, Inc. (Nasdaq:ATEC). Alphatec Spine is a medical device company that designs, develops, manufactures and markets products for the surgical treatment of spine disorders, primarily focused on the aging spine. The Company's mission is to combine world-class customer service with innovative, surgeon-driven design that will help improve the aging patient's quality of life. The Company is poised to achieve its goal through new solutions for patients with osteoporosis, stenosis and other aging spine deformities, improved minimally invasive products and techniques and integrated biologics solutions. In addition to its US operations, the Company also markets its spine products in Europe. In Asia, the Company markets a broad line of spine and orthopedic products through its subsidiary, Alphatec Pacific, Inc. For more information, please visit www.alphatecspine.com.
Also visit the Aging Spine Center, www.agingspinecenter.com, a web-based information portal for healthcare providers and patients regarding aging spine disorders and their treatment. The Company is working with the National Osteoporosis Foundation as well as other clinical portals that provide peer-reviewed content, to populate the Aging Spine Center. The interactive website enables patients to review pertinent information about disorders that affect the aging spine in an easy-to-understand format that includes videos, graphics and questions that should be asked of caregivers. Medical information on the website includes published abstracts regarding the aging spine.
The Alphatec Spine, Inc. logo is available athttp://www.globenewswire.com/newsroom/prs/?pkgid=3520
Use of Non-GAAP Information
Alphatec provides its financial results in accordance with accounting principles generally accepted in the United States (GAAP). The Company also uses forward-looking non-GAAP financial measures in addition to and in conjunction with corresponding GAAP measures to help analyze the performance of its core business, in connection with the preparation of annual budgets, and in measuring performance for some forms of compensation. In particular, Alphatec presents (i) adjusted EBITDA, and (ii) combined pro forma financial information, which in each case are non-GAAP financial measures.
Non-GAAP financial measures reflect an additional way of viewing aspects of Alphatec's operations that, when viewed with the GAAP results, provide a more complete understanding of Alphatec's results of operations and the factors and trends affecting Alphatec's business. However, non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Non-GAAP financial measures used by the Company may differ from the non-GAAP financial measures used by other companies, including Alphatec's competitors.
Alphatec believes the most directly comparable GAAP financial measure to adjusted EBITDA is net income (loss). Adjusted EBITDA is net income (loss) excluding the effects of interest, taxes, depreciation, amortization, stock-based compensation costs, and other non-recurring income of expense items, such as in-process research and development, expenses related to the transaction and acquisition related restructuring expenses that are expected to occur following closing.
Alphatec has not included in this presentation a reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures because, due to variability and difficulty in making accurate forecasts and projections or certain information not being ascertainable or accessible, not all of the information necessary for a quantitative reconciliation of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures is available to the Company without unreasonable efforts. The probable significance of providing these forward-looking non-GAAP financial measures without the directly comparable GAAP financial measures is that such GAAP financial measures may be materially different from the corresponding non-GAAP financial measures.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by safe harbors created thereby. Shareholders are cautioned that all forward-looking statements are based largely on Alphatec's expectations and involve risks and uncertainties, some of which cannot be predicted or are beyond Alphatec's control. Statements containing a projection of revenue, EBITDA, cost and revenue synergies, additional market opportunities, future economic performance, product development timelines, the acceptance of products by the surgeon community or whether the acquisition agreement will be consummated are just a few examples of forward-looking statements. Some factors that could realistically cause results to differ materially from those projected in the forward-looking statements include the occurrence of any event, change or other circumstances that could give rise to the termination of the acquisition agreement; the outcome of any legal proceedings that have been, or may be, instituted against the Company or Scient'x related to the acquisition agreement; the inability to complete the acquisition due to the failure to obtain shareholder approval for the transaction or the failure to satisfy other conditions to completion of the transaction, including the receipt of all regulatory approvals or third-party consents related to the transaction; risks that the proposed transaction disrupts the Company's current plans and operations and the potential difficulties in employee retention as a result of the acquisition; the ability to recognize the benefits of the transaction; litigation outcomes, including without limitation product liability litigation and litigation related to the infringement of intellectual property of a third party; the impact of healthcare reform and regulations in the United States and other jurisdictions; the Company's ability to meet its financial guidance; the growth rate of the spine market related to aging and elderly patients; the ability to achieve regulatory approval for products in the Company's development pipeline and the successful adoption of such products once approved; the Company's ability to develop and expand its business in the United States, Asia and Europe; the Company's ability to compete with other competing products and with emerging new technologies; continuation of favorable third party payor reimbursement for procedures performed using the Company's products; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company's ability to successfully control its costs or achieve profitability; and the uncertainty of additional funding. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Company's Annual Report on Form 10-K and in the Company's other filings with the Securities and Exchange Commission (the "SEC") available at the SEC's website at http://www.sec.gov.
The statements in this press release reflect the Company's expectations and beliefs as of the date of this release. The Company anticipates that subsequent events and developments will cause its expectations and beliefs to change. However, while the Company may elect to update these forward-looking statements publicly at some point in the future, the Company specifically disclaims any obligation to do so, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing the Company's views as of any date after the date of this release.
Important Additional Information Will Be Filed with the SEC
In connection with the proposed transaction, the Company will file a proxy statement with the SEC. The proxy statement will be mailed to stockholders of Alphatec and will contain important information about Alphatec, Scient'x, the transaction and related matters. SHAREHOLDERS ARE STRONGLY ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Shareholders may obtain a free copy of the proxy statement (when available) and other documents filed by the Company from the SEC's website at http://www.sec.gov. The proxy statement (when available) and such other documents may also be obtained for free from the Company's website at http://www.alphatecspine.com or by directing such request to Alphatec Spine, Inc., Investor Relations, 5818 El Camino Real, Carlsbad, CA 92008, telephone: (760) 494-6746.
Alphatec, Scient'x and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the proposed acquisition. Information regarding Alphatec's directors and executive officers is contained in Alphatec's Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and its proxy statement dated May 8, 2009, which are filed with the SEC. As of November 30, 2009, Alphatec's directors and executive officers beneficially owned approximately 41.2% of Alphatec's common stock. A more complete description of the interests of Alphatec's directors and officers in the acquisition will be available in the proxy statement relating to the acquisition.
Saturday, January 2, 2010
Asian Sovereigns Will Step Up Borrowing In 2010 While Considering Exit Strategies From Stimulus Programs, Says Article
Asian sovereigns are likely to remain active borrowers in 2010, with a 5% year-over-year rise in commercial issuance, according to a recently released report by Standard & Poor's Ratings Services titled, "Asian Sovereigns To Remain In Debt Markets."
Standard & Poor's survey of borrowing and debt suggests sovereign requirements for 2010 are likely to bring commercial issuance in the region to US$2.2 trillion. But, as sovereigns in Asia consider exit strategies from economic stimulus programs, Standard & Poor's anticipates that they will seek to strike a balance to prevent a derailing of the still-nascent economic recovery.
"We believe that the test for sovereigns in the coming year will be managing macroeconomic crosscurrents while stimulus-based policies are still in place, despite worries over asset and consumer price trends," said Standard & Poor's credit analyst William Hess.
The article adds that in the longer term, the prospect of lingering deficits, combined with the significant downside risks of a second slowdown in global growth, raises questions about debt sustainability for a number of sovereigns in the region and the implications of borrowing plans on ratings.
"We believe that sovereigns in the region are not yet ready to retreat from capital markets either for the own funding purposes or for general economic support programs. For sovereigns in Asia during 2010, this could mean remaining active issuers in markets that they may otherwise like to tame, with the result of this balancing act being important for medium-term fiscal trends," said Mr. Hess.
Standard & Poor's survey of borrowing and debt suggests sovereign requirements for 2010 are likely to bring commercial issuance in the region to US$2.2 trillion. But, as sovereigns in Asia consider exit strategies from economic stimulus programs, Standard & Poor's anticipates that they will seek to strike a balance to prevent a derailing of the still-nascent economic recovery.
"We believe that the test for sovereigns in the coming year will be managing macroeconomic crosscurrents while stimulus-based policies are still in place, despite worries over asset and consumer price trends," said Standard & Poor's credit analyst William Hess.
The article adds that in the longer term, the prospect of lingering deficits, combined with the significant downside risks of a second slowdown in global growth, raises questions about debt sustainability for a number of sovereigns in the region and the implications of borrowing plans on ratings.
"We believe that sovereigns in the region are not yet ready to retreat from capital markets either for the own funding purposes or for general economic support programs. For sovereigns in Asia during 2010, this could mean remaining active issuers in markets that they may otherwise like to tame, with the result of this balancing act being important for medium-term fiscal trends," said Mr. Hess.
Wednesday, December 16, 2009
Money &Banking to celebrate the 10th Money Expo with the theme “The Road to Wealth”
Money and Banking magazine organizes Money Expo 2010 with special theme “The Road to Wealth” to celebrate its 10th year anniversary and support Thailand economic recovery to distribute wealth to all Thais. The first event, bringing great wealth to Eastern Seaboard, is Money Expo PATTAYA 2010.
Mr.Santi Viriyarangsarit, Money and Banking magazine editor and president of Money Expo 2010 announces that “after its 9 successful years in 2009 with total 5,185,500 visitors and transactions value of 646,000 million baht, Money Expo 2010 will celebrate its 10th anniversary in 2010 in 4 regions in the country with the theme “The Road to Wealth”.
Money Expo brings together best investments and finance offers from nation’s leading commercial banks, financial institutions, along with varied life insurance options available in the market so that retail customers and SMEs can access directly to “funding source” and “Investment Choices”. At the same time, opportunities are opened for Bank and financial institute to expand both retail and SMEs base.
The first Money Expo 2010 The Road to Wealth, the roadmap to achieve wealth for all Thais, will be held in Pattaya of Chonburi province with title “Money Expo Pattaya 2010” during 5-7 February 2010 at PEACH, Royal Cliff Beach Resort Hotel where 22 organizations, including commercial banks, financial institutions together with leading organization from private sector and government agencies will participate.
These organizations will roll out golden promotions for their quality products and services, ranging from low-interest lending rate, special mortgage rate, auto loan, education loan, SMEs loan, credit card, cash card to attractive deposit rates. The best conditions will be offered for investment in stock market, bonds, derivatives, life insurance. Meanwhile, investment guidance and consultancy services will also be provided to those interested. Moreover, liveStage performances from leading superstars are scheduled to entertain visitors.
Commercial banks participate in Money Expo PATTAYA 2010 are Krung Thai Bank Pcl. , Bangkok Bank Pcl. , Kasikorn Bank Pcl. , Siam Commercial Bank Pcl. , Bank of Ayudhya Pcl. , TMB Bank Pcl. , The Siam City Bank Pcl. , CIMB Thai Bank Pcl. , The Thai Credit Retail Bank Pcl. , Commercial banks participate Government Housing Bank , Islamic Bank of Thailand , Muang Thai Life Assurance Co. Ltd. , Ayudhya Capital Auto Lease Plc. , AEON Thana Sinsap (Thailand) Pcl. , Asia Forestry Management Co., Ltd. , Profitable Group , Bank of Thailand , The Revenue Department , The Stock Exchange of Thailand , Securities and Exchange Commission , Office of Insurance Commission and The Agriculture Futures Exchange of Thailand
Chonburi province is the economic, commercial and tourism center of the East given purchasing power of 1.2 million population. At the end of 2008, Gross Provincial Product (GPP) stood at 492,051 million baht, rose by 38,165 million baht from end 2007, while GDP per Capita was 416,003 baht, increase by 27,829 million baht from the end of 2007.
As of September 30, 2009, Chonburi shelters 280 of Banks’ branches. All of which provided 153,324 million baht net credits and raised 191,457 million baht net deposits. From January to October 2009, there are 35 projects applied for investment privileges from BOI.
In addition, there are positive signs of economic recovery given the revised 2010 GDP growth forecast to 3.3 to 5.3% from previous 3.0 to 3.5% by the The Bank of Thailand.
“All indicators show that there are strong demand for loans in Chonburi and the whole Eastern region and consumers still look for better yields in deposits and investment. I’m confident that Money Expo PATTAYA 2010 will again succeed as highly as the first Money Expo PATTAYA held during 6-8 February 2009 that has attracted 45,000 visitors and generated 19,213.68 million baht worth of transactions” Mr.Santi said.
Three other Money Expo 2010
Central - Money Expo 2010 at Queen Sirikit National Convention Center, 6-9 May 2010
North Eastern - Money Expo KORAT 2010 at MCC Hall, The Mall Korat, 8-10 October 2010
North - Money Expo Chiangmai 2010 at Chiangmai University Convention Center, 12-14 November 2010
Mr.Santi Viriyarangsarit, Money and Banking magazine editor and president of Money Expo 2010 announces that “after its 9 successful years in 2009 with total 5,185,500 visitors and transactions value of 646,000 million baht, Money Expo 2010 will celebrate its 10th anniversary in 2010 in 4 regions in the country with the theme “The Road to Wealth”.
Money Expo brings together best investments and finance offers from nation’s leading commercial banks, financial institutions, along with varied life insurance options available in the market so that retail customers and SMEs can access directly to “funding source” and “Investment Choices”. At the same time, opportunities are opened for Bank and financial institute to expand both retail and SMEs base.
The first Money Expo 2010 The Road to Wealth, the roadmap to achieve wealth for all Thais, will be held in Pattaya of Chonburi province with title “Money Expo Pattaya 2010” during 5-7 February 2010 at PEACH, Royal Cliff Beach Resort Hotel where 22 organizations, including commercial banks, financial institutions together with leading organization from private sector and government agencies will participate.
These organizations will roll out golden promotions for their quality products and services, ranging from low-interest lending rate, special mortgage rate, auto loan, education loan, SMEs loan, credit card, cash card to attractive deposit rates. The best conditions will be offered for investment in stock market, bonds, derivatives, life insurance. Meanwhile, investment guidance and consultancy services will also be provided to those interested. Moreover, liveStage performances from leading superstars are scheduled to entertain visitors.
Commercial banks participate in Money Expo PATTAYA 2010 are Krung Thai Bank Pcl. , Bangkok Bank Pcl. , Kasikorn Bank Pcl. , Siam Commercial Bank Pcl. , Bank of Ayudhya Pcl. , TMB Bank Pcl. , The Siam City Bank Pcl. , CIMB Thai Bank Pcl. , The Thai Credit Retail Bank Pcl. , Commercial banks participate Government Housing Bank , Islamic Bank of Thailand , Muang Thai Life Assurance Co. Ltd. , Ayudhya Capital Auto Lease Plc. , AEON Thana Sinsap (Thailand) Pcl. , Asia Forestry Management Co., Ltd. , Profitable Group , Bank of Thailand , The Revenue Department , The Stock Exchange of Thailand , Securities and Exchange Commission , Office of Insurance Commission and The Agriculture Futures Exchange of Thailand
Chonburi province is the economic, commercial and tourism center of the East given purchasing power of 1.2 million population. At the end of 2008, Gross Provincial Product (GPP) stood at 492,051 million baht, rose by 38,165 million baht from end 2007, while GDP per Capita was 416,003 baht, increase by 27,829 million baht from the end of 2007.
As of September 30, 2009, Chonburi shelters 280 of Banks’ branches. All of which provided 153,324 million baht net credits and raised 191,457 million baht net deposits. From January to October 2009, there are 35 projects applied for investment privileges from BOI.
In addition, there are positive signs of economic recovery given the revised 2010 GDP growth forecast to 3.3 to 5.3% from previous 3.0 to 3.5% by the The Bank of Thailand.
“All indicators show that there are strong demand for loans in Chonburi and the whole Eastern region and consumers still look for better yields in deposits and investment. I’m confident that Money Expo PATTAYA 2010 will again succeed as highly as the first Money Expo PATTAYA held during 6-8 February 2009 that has attracted 45,000 visitors and generated 19,213.68 million baht worth of transactions” Mr.Santi said.
Three other Money Expo 2010
Central - Money Expo 2010 at Queen Sirikit National Convention Center, 6-9 May 2010
North Eastern - Money Expo KORAT 2010 at MCC Hall, The Mall Korat, 8-10 October 2010
North - Money Expo Chiangmai 2010 at Chiangmai University Convention Center, 12-14 November 2010
New Generation Trading System for China Foreign Exchange Trade System (CFETS) goes live nationwide
Tata Consultancy Services, the leading IT services, business solutions and outsourcing firm today announced that the Reminbi currency trading platform for the Chinese inter-bank market, an initiative of China Foreign Exchange Trade System (CFETS), a subsidiary of People’s Bank of China (PBoC) has successfully gone live nationwide. The New Generation CNY Trading System (NGCNYTS) is a forward-looking trading system, which aims to incorporate the future vision of the Chinese Interbank market and relevant international best practices. It is designed to meet the fast growing requirements of the Chinese financial market with efficient risk management and real time monitoring systems. It supports multiple trading methods, including special features for market makers.
NGCNYTS is a next generation system providing unified platform across Debt, Money and Derivative Markets. NGCNYTS gained national importance, as it is the primary trading platform for all financial institutions such as Commercial Banks, Pension, Trust & Mutual Fund, Securities firms and Insurance companies in China.
Speaking on the successful implementation of this landmark project, Girija Pande, Executive Vice President and Head, TCS Asia Pacific, said, “We are extremely pleased to successfully deliver the CFETS project built based on our experience in other global markets and in close cooperation with CFETS who have experience in Chinese domestic market. It also provides flexibility to connect with third party front ends and other external interfaces. Deploying in ten markets at a time is a unique challenge which TCS could complete successfully.”
“The project is among the most prestigious venture of TCS in the APAC region, involving a highly dedicated multi-cultural team of over 130 associates spanning a period of more than 2 years. The team will be maintaining the system going forward and enhancing the system for additional markets,” he further added.
TCS’ trading solution at CFETS is scalable and can handle rapid growth in volumes with ease. Due to its scalable and configurable architecture, it also simplifies the addition of multiple financial products thus reducing the overall time to market.
Besides CFETS, TCS has successfully delivered the mission critical trading systems for the National Stock Exchange of India Limited, India, National Commodity and Derivatives Exchange, India and Clearing Corporation of India Limited (CCIL). TCS is also the chosen strategic partner involved in maintaining the trading applications at Deutsche Boerse AG, Germany.
TCS pioneered the entry of Indian IT industry in China in 2002 and remains at the forefront of that thrust with 1100 consultants in China and four Global delivery Centres (Beijing, Shanghai, Tianjin& Hangzhou). In 2005, TCS was invited by Chinese Government to form a Joint Venture to create a large scale global sourcing base in China. TCS China is serving over 30 Global and domestic clients like Eaton, Motorola, Cummins, China Foreign Exchange Trade System (CFETS), Guangdong Provincial Rural Credit Cooperative Union (GDRCC), China Trust Bank, Hua Xia Bank.
NGCNYTS is a next generation system providing unified platform across Debt, Money and Derivative Markets. NGCNYTS gained national importance, as it is the primary trading platform for all financial institutions such as Commercial Banks, Pension, Trust & Mutual Fund, Securities firms and Insurance companies in China.
Speaking on the successful implementation of this landmark project, Girija Pande, Executive Vice President and Head, TCS Asia Pacific, said, “We are extremely pleased to successfully deliver the CFETS project built based on our experience in other global markets and in close cooperation with CFETS who have experience in Chinese domestic market. It also provides flexibility to connect with third party front ends and other external interfaces. Deploying in ten markets at a time is a unique challenge which TCS could complete successfully.”
“The project is among the most prestigious venture of TCS in the APAC region, involving a highly dedicated multi-cultural team of over 130 associates spanning a period of more than 2 years. The team will be maintaining the system going forward and enhancing the system for additional markets,” he further added.
TCS’ trading solution at CFETS is scalable and can handle rapid growth in volumes with ease. Due to its scalable and configurable architecture, it also simplifies the addition of multiple financial products thus reducing the overall time to market.
Besides CFETS, TCS has successfully delivered the mission critical trading systems for the National Stock Exchange of India Limited, India, National Commodity and Derivatives Exchange, India and Clearing Corporation of India Limited (CCIL). TCS is also the chosen strategic partner involved in maintaining the trading applications at Deutsche Boerse AG, Germany.
TCS pioneered the entry of Indian IT industry in China in 2002 and remains at the forefront of that thrust with 1100 consultants in China and four Global delivery Centres (Beijing, Shanghai, Tianjin& Hangzhou). In 2005, TCS was invited by Chinese Government to form a Joint Venture to create a large scale global sourcing base in China. TCS China is serving over 30 Global and domestic clients like Eaton, Motorola, Cummins, China Foreign Exchange Trade System (CFETS), Guangdong Provincial Rural Credit Cooperative Union (GDRCC), China Trust Bank, Hua Xia Bank.
Barclays Capital lists iPath Exchange Traded Note on SGX, first-ever ETN in Asia outside Japan
Barclays Capital, the investment banking division of Barclays Bank PLC, and Singapore Exchange Limited (SGX) today announced the listing of the iPath Dow Jones-UBS Commodity Index Total ReturnSM Exchange-Traded Note (ETN) on the SGX. The iPath Dow Jones-UBS Commodity Index Total ReturnSM ETN is the first-ever ETN listed in Asia outside Japan and provides both institutional and retail investors with exposure to a broad range of commodities during the Asian time zone.
iPath ETNs were first launched by Barclays Capital in the US in 2006 and are designed to provide investors with convenient access to the returns of market benchmark indices, less investor fees. The iPath ETNs are senior, unsecured, unsubordinated debt securities linked to the performance of an underlying index.
"We are very excited to bring the iPath ETN platform to investors in Asia. iPath ETNs have been tremendously successful in the US attracting over US$5 billion in market capitalisation with over US$80 billion in volume traded since inception," said Philippe El-Asmar, Head of Investor Solutions at Barclays Capital. "iPath ETNs provide investors with simple, transparent, cost efficient instruments that provide access to difficult-to-reach markets with the ease of trading through an exchange," he added.
Ms Janice Kan, Senior Vice President & Head of Product Development at SGX said, "We are pleased to be the first listing venue for Barclays Capital's iPath ETN platform in Asia. The launch of this new product class broadens our suite of investment offerings and will provide investors with cost-efficient access to the commodities asset class, and eventually, a range of other asset classes. This underpins our efforts in developing SGX as the one-stop investment gateway in Asia."
Peter Hu, Barclays Capital's Head of Investor Solutions in Non Japan Asia said, "We are delighted to be able to provide investors with a new way to invest across different asset classes during Asian trading hours. The iPath Dow Jones-UBS Commodity Index Total ReturnSM ETN we are launching today enables investors to gain exposure to a broad range of underlying commodities with ease via a single, liquid and transparent instrument. We see self-directed investors becoming an increasingly important client segment in Asia and we plan to cater for their varied investment needs by launching many more iPath ETNs in the future."
iPath ETNs were first launched by Barclays Capital in the US in 2006 and are designed to provide investors with convenient access to the returns of market benchmark indices, less investor fees. The iPath ETNs are senior, unsecured, unsubordinated debt securities linked to the performance of an underlying index.
"We are very excited to bring the iPath ETN platform to investors in Asia. iPath ETNs have been tremendously successful in the US attracting over US$5 billion in market capitalisation with over US$80 billion in volume traded since inception," said Philippe El-Asmar, Head of Investor Solutions at Barclays Capital. "iPath ETNs provide investors with simple, transparent, cost efficient instruments that provide access to difficult-to-reach markets with the ease of trading through an exchange," he added.
Ms Janice Kan, Senior Vice President & Head of Product Development at SGX said, "We are pleased to be the first listing venue for Barclays Capital's iPath ETN platform in Asia. The launch of this new product class broadens our suite of investment offerings and will provide investors with cost-efficient access to the commodities asset class, and eventually, a range of other asset classes. This underpins our efforts in developing SGX as the one-stop investment gateway in Asia."
Peter Hu, Barclays Capital's Head of Investor Solutions in Non Japan Asia said, "We are delighted to be able to provide investors with a new way to invest across different asset classes during Asian trading hours. The iPath Dow Jones-UBS Commodity Index Total ReturnSM ETN we are launching today enables investors to gain exposure to a broad range of underlying commodities with ease via a single, liquid and transparent instrument. We see self-directed investors becoming an increasingly important client segment in Asia and we plan to cater for their varied investment needs by launching many more iPath ETNs in the future."
Tuesday, December 15, 2009
Investment-Grade Composite Spread Tightens To 212 Basis Points
Standard & Poor's investment-grade and speculative-grade composite spreads tightened on Friday to 212 basis points (bps) and 660 bps, respectively. By rating, the 'AA' spread tightened one basis point to 145 bps, 'A' compressed 3 bps to 181 bps, 'BBB' tightened 2 bps to 267 bps, 'BB' tightened 8 bps to 489 bps, 'B' compressed 7 bps to 660 bps, and 'CCC' expanded 3 bps to 1,055 bps.
By industry, banks and telecommunications tightened by the largest margin of 4 bps each to 292 bps and 320 bps, respectively. Industrials followed, compressing 3 bps to 340 bps, trailed by financial institutions and utilities, which tightened 2 bps each to 370 bps and 214 bps, respectively.
Despite material tightening since their record highs in December 2008, the speculative-grade spread remains range-bound within a default cycle, and the investment-grade spread continues to face pressure from financial institutions and banks. In addition, speculative-grade defaults continue to accelerate, as does the preponderance of credit downgrades. Because of these factors, we expect spreads to remain at their elevated levels for some time as investors, the credit markets, and the economy cautiously tread through the current recessionary period.
By industry, banks and telecommunications tightened by the largest margin of 4 bps each to 292 bps and 320 bps, respectively. Industrials followed, compressing 3 bps to 340 bps, trailed by financial institutions and utilities, which tightened 2 bps each to 370 bps and 214 bps, respectively.
Despite material tightening since their record highs in December 2008, the speculative-grade spread remains range-bound within a default cycle, and the investment-grade spread continues to face pressure from financial institutions and banks. In addition, speculative-grade defaults continue to accelerate, as does the preponderance of credit downgrades. Because of these factors, we expect spreads to remain at their elevated levels for some time as investors, the credit markets, and the economy cautiously tread through the current recessionary period.
TRIS Rating Affirms Company Rating of “DBSVT” at “A-” with “Negative” Outlook
TRIS Rating Co., Ltd. has affirmed the company rating of DBS Vickers Securities (Thailand) Co., Ltd. (DBSVT), a wholly-owned subsidiary of DBS Vickers Securities Holdings Pte., Ltd. (DBSVSH) in Singapore, at “A-”. The outlook has been changed to “negative’ from “stable”. The rating is enhanced from DBSVT’s stand-alone credit profile to reflect its status as a strategically important subsidiary of the DBS Group, which provides DBSVT with both financial and non-financial support. The stand-alone rating is based on DBSVT’s ability to utilize the network and resources of the DBS Group, and also takes into account DBSVT’s adequate capital base and sufficient liquidity, which provide DBSVT with a cushion to absorb normal business risk. However, these strengths are partially offset by concerns over the company’s deteriorating market position in the stock brokerage business and its financial performance during the last three years which was lower than TRIS Rating’s expectation. The rating is also constrained by uncertainty of the Thai stock market and operating climate following the brokerage business liberalization in 2010 and the global capital market volatility. These might partly affect the company’s business and financial position in the future.
The “negative” outlook reflects DBSVT’s market position and financial performance in securities brokerage business during the last three year which was lower than TRIS Rating’s expectation. TRIS Rating will closely monitor the company’s operating performance and market position when the sliding brokerage commission scales implemented in 2010. Any future downturn in operating performance will negatively impact the rating. However, the success implementation of DBSVT’s wealth management business, as the company’s strategic plan, and the recovery of the market position to a sustainable level will support DBSVT’s credit strengths. TRIS Rating expects DBSVT to remain a strategically important entity of the DBS Group, sustain to play a role in Thailand’s securities market as part of the DBS Group’s international network and continue getting the DBS Group’s implicit support.
TRIS Rating reported that DBSVT provides brokerage services as its core business, as well as other non-brokerage services, including financial advisory, equity underwriting, and wealth management. In the brokerage business, DBSVT faced a gradual decline in market share over the past four years: share fell from 2.9% in 2005 to 2.8% in 2006 and 2007, and then declined sharply to 2.1% in 2008. The substantial drop in market share was mainly from increased competition, especially from foreign brokerage firms who have a Direct Market Access (DMA) trading system. However, even after DBSVT implemented the DMA system in 2008, volume from overseas investors dropped due to the global financial crisis. The overseas investors have contributed 40%-50% of the company’s trading volume during the last five years. Market share, therefore, slid to 1.9% for the first nine months of 2009, and DBSVT ranked 22nd in terms of market share among 38 brokerage companies, down from 15th for all of 2007. However, excluding the proprietary trade, the company’s market share was 2.2% for the first nine months of 2009, down from 2.4% in 2008 and 3.0% in 2007.
Based on the support from the DBS Group and the flow of investable fund resulting from liquidity injections by the US and EU governments, TRIS Rating said DBSVT might be able to regain market share from overseas investors. Regarding the retail client base, the company plan to enlarge the market share through Internet trading, wealth management teams, and a company strategy to expand margin loans. However, recovery of both the overseas and retail volume with stable contribution has yet to be monitored, after the sliding scale of brokerage commission is implemented in 2010. In the investment banking business, the company targets medium-sized firms. DBSVT was the lead underwriter for the Asiasoft PLC deal worth Bt840 million in 2008. This is a sharp turnaround from only Bt74 million in deals in 2007. However, the company had no fee-based income for the first half of 2009. As investment banking is highly related to prospects for the stock market, DBSVT is expanding to offer other advisory services including mergers and acquisitions (M&A), and financial advisory work through the resources and international franchise network of its parent company. However, the revenue contribution from these activities was only 4% of total revenue for the last five years. The company does not expect any sizable amount of revenue from this business during the next 2-3 years.
Net profit gradually declined from Bt209 million in 2005 to Bt172 million in 2006 and Bt132 million in 2007, due to unfavorable market conditions and increasing competition among securities firms. In 2008, the company reported a net loss of Bt22 million due to substantial losses on margin loans, a direct result of the stock market turmoil during the last quarter of 2008. The unfavorable market conditions continued through the first quarter of 2009. DBSVT reported a net loss of Bt9 million for the first half of 2009. However, performance is likely to reverse for the second half of the year, because the market volume has improved since the second quarter of 2009. The average daily trading volume on the Stock Exchange of Thailand (SET) during April to September 2009 was around Bt21,000 million, up sharply from a daily average of trading volume of around Bt8,600 million for the first quarter of 2009.
DBSVT’s total assets ranged from Bt1.6-Bt1.9 billion during 2005-2008, before significantly increased to Bt2.31 billion as of June 2009. This remarkable increase arose from higher market trading volumes. However, outstanding margin loans remained flat at around Bt500 million from the beginning of 2008 through June 2009, due to the imposition of more stringent credit criteria. Margin loans outstanding were accounted for 31.3% of total assets in 2008 and 22.7% as of June 2009. However, the company plans to re-expand the margin loan portfolio when the opportunity arises, with the support from the DBS Group. The policy to maintain a high level of margin loans could raise the market share of retail customers. However, the loan expansion could expose the company to higher credit risk, particularly when the company has high concentration risk on large customers. Based on the current amount of outstanding margin loans, the company still has a sufficient capital to cover any losses from margin loan transactions. As of June 2009, the Net Capital Rule (NCR) was 49.56%, far above the requirement of the Securities and Exchange Commission (SEC) of Thailand.
TRIS Rating said, DBSVT has only a small exposure from its own investments. DBSVT invested Bt14 million in shares of TSFC Securities Ltd. (TSFC). This investment was a mandated poll-fund for all financial institutions to subsidize the establishment of TSFC. The investment was totally written off during the first half of 2009. Liquidity and financial flexibility remains sufficient, even after DBSVT started utilizing credit facilities from various financial institutions and the DBS Group to finance the margin loan portfolio expansion. As of August 2009, the company utilized 3.0% of the total available credit facilities worth Bt2.3 billion from several financial institutions and had a Bt200 million of subordinated loan from the DBS Group. However, TRIS Rating expects the DBS Group to provide timely financial support if needed. DBSVT has an adequate capital base despite a decrease from Bt1,273 million as of December 2007 to Bt964 million as of June 2009. The drop was due to a Bt277 million extra dividend payment and from net losses from operations.
The “negative” outlook reflects DBSVT’s market position and financial performance in securities brokerage business during the last three year which was lower than TRIS Rating’s expectation. TRIS Rating will closely monitor the company’s operating performance and market position when the sliding brokerage commission scales implemented in 2010. Any future downturn in operating performance will negatively impact the rating. However, the success implementation of DBSVT’s wealth management business, as the company’s strategic plan, and the recovery of the market position to a sustainable level will support DBSVT’s credit strengths. TRIS Rating expects DBSVT to remain a strategically important entity of the DBS Group, sustain to play a role in Thailand’s securities market as part of the DBS Group’s international network and continue getting the DBS Group’s implicit support.
TRIS Rating reported that DBSVT provides brokerage services as its core business, as well as other non-brokerage services, including financial advisory, equity underwriting, and wealth management. In the brokerage business, DBSVT faced a gradual decline in market share over the past four years: share fell from 2.9% in 2005 to 2.8% in 2006 and 2007, and then declined sharply to 2.1% in 2008. The substantial drop in market share was mainly from increased competition, especially from foreign brokerage firms who have a Direct Market Access (DMA) trading system. However, even after DBSVT implemented the DMA system in 2008, volume from overseas investors dropped due to the global financial crisis. The overseas investors have contributed 40%-50% of the company’s trading volume during the last five years. Market share, therefore, slid to 1.9% for the first nine months of 2009, and DBSVT ranked 22nd in terms of market share among 38 brokerage companies, down from 15th for all of 2007. However, excluding the proprietary trade, the company’s market share was 2.2% for the first nine months of 2009, down from 2.4% in 2008 and 3.0% in 2007.
Based on the support from the DBS Group and the flow of investable fund resulting from liquidity injections by the US and EU governments, TRIS Rating said DBSVT might be able to regain market share from overseas investors. Regarding the retail client base, the company plan to enlarge the market share through Internet trading, wealth management teams, and a company strategy to expand margin loans. However, recovery of both the overseas and retail volume with stable contribution has yet to be monitored, after the sliding scale of brokerage commission is implemented in 2010. In the investment banking business, the company targets medium-sized firms. DBSVT was the lead underwriter for the Asiasoft PLC deal worth Bt840 million in 2008. This is a sharp turnaround from only Bt74 million in deals in 2007. However, the company had no fee-based income for the first half of 2009. As investment banking is highly related to prospects for the stock market, DBSVT is expanding to offer other advisory services including mergers and acquisitions (M&A), and financial advisory work through the resources and international franchise network of its parent company. However, the revenue contribution from these activities was only 4% of total revenue for the last five years. The company does not expect any sizable amount of revenue from this business during the next 2-3 years.
Net profit gradually declined from Bt209 million in 2005 to Bt172 million in 2006 and Bt132 million in 2007, due to unfavorable market conditions and increasing competition among securities firms. In 2008, the company reported a net loss of Bt22 million due to substantial losses on margin loans, a direct result of the stock market turmoil during the last quarter of 2008. The unfavorable market conditions continued through the first quarter of 2009. DBSVT reported a net loss of Bt9 million for the first half of 2009. However, performance is likely to reverse for the second half of the year, because the market volume has improved since the second quarter of 2009. The average daily trading volume on the Stock Exchange of Thailand (SET) during April to September 2009 was around Bt21,000 million, up sharply from a daily average of trading volume of around Bt8,600 million for the first quarter of 2009.
DBSVT’s total assets ranged from Bt1.6-Bt1.9 billion during 2005-2008, before significantly increased to Bt2.31 billion as of June 2009. This remarkable increase arose from higher market trading volumes. However, outstanding margin loans remained flat at around Bt500 million from the beginning of 2008 through June 2009, due to the imposition of more stringent credit criteria. Margin loans outstanding were accounted for 31.3% of total assets in 2008 and 22.7% as of June 2009. However, the company plans to re-expand the margin loan portfolio when the opportunity arises, with the support from the DBS Group. The policy to maintain a high level of margin loans could raise the market share of retail customers. However, the loan expansion could expose the company to higher credit risk, particularly when the company has high concentration risk on large customers. Based on the current amount of outstanding margin loans, the company still has a sufficient capital to cover any losses from margin loan transactions. As of June 2009, the Net Capital Rule (NCR) was 49.56%, far above the requirement of the Securities and Exchange Commission (SEC) of Thailand.
TRIS Rating said, DBSVT has only a small exposure from its own investments. DBSVT invested Bt14 million in shares of TSFC Securities Ltd. (TSFC). This investment was a mandated poll-fund for all financial institutions to subsidize the establishment of TSFC. The investment was totally written off during the first half of 2009. Liquidity and financial flexibility remains sufficient, even after DBSVT started utilizing credit facilities from various financial institutions and the DBS Group to finance the margin loan portfolio expansion. As of August 2009, the company utilized 3.0% of the total available credit facilities worth Bt2.3 billion from several financial institutions and had a Bt200 million of subordinated loan from the DBS Group. However, TRIS Rating expects the DBS Group to provide timely financial support if needed. DBSVT has an adequate capital base despite a decrease from Bt1,273 million as of December 2007 to Bt964 million as of June 2009. The drop was due to a Bt277 million extra dividend payment and from net losses from operations.
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