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41 posts from October 2013


Energy Future Holdings will make debt payment, Bloomberg reports

Bloomberg News has the most detailed report to date of the scheduled $270 million debt payment Energy Future Holdings faces Friday, and it says the Dallas company will make the payment after creditors couldn't agree on a restructuring proposal. Late Wednesday, The Wall Street Journal and Reuters had also reported that the payment was likely to be made. Bloomberg reported that unsecured creditors are seeking much more money than the company's secured creditors were willing to offer. Dallas-based EFH has the money to make the payment, but senior creditors were believed to favor a bankruptcy filing because the $270 million payment is going to bondholders. The Bloomberg story is here.

-- Jim Fuquay

Report: Energy Future Holdings will make debt payment

Dallas-based Energy Future Holdings will make a $270 million debt payment scheduled for Friday rather than file for Chapter 11 bankruptcy, The Wall Street Journal reported. Citing unnamed sources, the newspaper said the former TXU Corp. likely wouldn't face another decision on bankruptcy uptil early next year. EFH has more than $1.3 billion, but there had been speculation that creditors preferred that the company not make the payment to bondholders and instead retain the money for distribution during bankruptcy. The company doesn't face another significant repayment until October 2014, but it could receive a qualified opinion from its auditors early next year, which could put it in default of loan covenants. A link to the story is here.

-- Jim Fuquay


Fort Worth home prices to increase 6.5 percent by June 2014

Fort Worth home prices are expected to rise 7.5 percent by the second quarter of 2014, according to CoreLogic, a provider of residential property information and analytics.

Fort Worth home prices rose 6.3 percent in the second quarter from a year ago, CoreLogic said.

Nationwide, home prices increased 10.1 percent in the second quarter. They are expected to be 16 percent above the trough in the fourth quarter of 2011 by the end of June 2014, CoreLogic said.

Price appreciation is projected to slow to 5.4 percent across all markets by the beginning of 2014, CoreLogic said.

“Prices are now rising in nearly 90 percent of metro areas, and in all metro areas with populations greater than 1 million," said  David Stiff, economist for CoreLogic Case-Shiller. "The strongest growth continues to be recorded in cities that were at the center of the housing bubble, but investor demand in those markets appears to be waning, meaning rapid rates of price appreciation are likely unsustainable."

_ Sandra Baker

Report: Energy Future Holdings adds independent directors

Bloomberg News is reporting that Dallas-based Energy Future Holdings, which appears headed for an imminent bankruptcy filing, has added two new directors to its board. The report quotes unnamed sources who say the new directors are independent, a move aimed at ensuring the board isn't perceived as favoring the current owners over the creditors who stand to gain nearly all the shares in the company in the event of a bankruptcy. The report is here.

-- Jim Fuquay


PUC mandates minimum electricity reserve margin

The Public Utility Commission of Texas today voted 2-1 to mandate an minimum reserve margin for the state's largest power grid, a move critics say is counter to the state's deregulated electricity market. Currently the Electricity Reliability Council of Texas makes forecasts of the reserve of electrical generating capacity compared to anticipated peak demand. Continued low wholesale power prices in the state's deregulated areas have discouraged generators from adding new capacity, and proponents of the mandated reserve say it's needed to avoid rotating blackouts. The PUC did not set the reserve. It will take up that task next year after a consultant's report. The Austin American Statesman has a full report here. Reuters has a report here.

-- Jim Fuquay

OmniAmerican loans up, earnings down

Fort Worth-based OmniAmerican Bank said third-quarter earnings dipped 4 percent from a year, to $2.2 million, or 21 cents a share. Its net loans rose 17 percent to $1.45 billion.

The bank on Oct. 9 announced that it trimmed its staff 8 percent, but severance costs related to the cuts won’t appear until its fourth-quarter results. It also said at the time that it plans to exit the indirect auto lending business, in which it buys vehicle loans from dealers.

The bank's increase in loans for the quarter, which amounted to $127 million, came in its commercial loan portfolio, said CEO Tim Carter. “We believe these steps are a critical part of our evolution towards a greater focus on commercial lending, residential real estate lending and retail banking, as part of our plan for success as a full-service, relationship-focused community bank,” Carter said in a prepared release.

-- Jim Fuquay


Oncor insulated against EFH bankruptcy, Moody's says

When private investors were finalizing their $45-billion deal to buy TXU Corp. in 2007, various parties wanted assurances that Oncor Electric Delivery, a regulated utility, wouldn't get caught up in the finances of the company's deregulated operations. The result was a detailed "ring-fencing" of Oncor's debts and obligations from the rest of Energy Future Holdings, as TXU was renamed. And apparently, it worked, says Moody's Investors Service. If so, it's about the only part of the deal that did.

In a report Thursday, Moody's said "a bankruptcy court would be hard-pressed to decide that Oncor can be swept into a filing." The debt rating company said that "if or when EFH does file, we expect Oncor would be only modestly hit around the edges." Further, Moody's expects the Public Utility Commission of Texas to "have a voice in the restructuring, even if it doesn't technically have a seat at the table."  At the worst, Moody's said, Oncor could be left with $150 million to $200 million in receivables from TXU Energy, the power retailing arm of EFH. Unlike every other local utility, Oncor isn't allowed by the terms of its buyout from recovering losses associated with TXU Energy, Moody's said.

-- Jim Fuquay

Latest hospital safety rankings include local facilities

Texas Health Resources hospitals grabbed many of the best report cards handed out by The Leapfrog Group, which uses its own survey plus data from the Agency for Healthcare Research and Quality, the Centers for Disease Control and Prevention, and the Centers for Medicare and Medicaid Services. Leapfrog, which releases its grades in spring and fall, graded 2,539 general hospitals, of which 32 percent got an "A," 26 percent got a "B," 35 percent got a "C," and the rest got a D or an F. One North Texas hospital on the survey got a "D."

There are so many different flavors of hospital ratings we sometimes don't know what to make of them; it often appears that as much depends on how the institution reports its data as it does on how it takes care of patients. But the trend is for greater transparency and accountability for results, and that's for the best. The full results and more detail on each hospital are at www.hospitalsafetyscore.org.

THR hospitals getting an "A" are: Arlington Memorial, Harris Methodist Azle, Harris Methodist Cleburne, Harris Methodist H-E-B, Huguley, Presbyterian Allen, Presbyterian Dallas, Presbyterian Denton, Presbyterian Kaufman, Presbyterian Plano and Presbyterian Rockwall. THR hospitals with a "B" are: Harris Methodist Fort Worth, Harris Methodist Southwest and USMD Arlington. Baylor Scott & White had two hospitals with an "A," in Irving and in Plano. Its Garland hospital got a "B," while the rest of the Baylor members rated a "C": All Saints Fort Worth, Carrollton, Southwest Fort Worth (closed last year), Waxahachie, Grapevine, and its flagship, University Medical Center.

Hospital Corp. of America, HCA, saw its Denton Regional, Medical Center Arlington, Medical Center of Plano and Plaza Medical Center get an "A," while Las Colinas Medical Center, Medical Center of Lewisville, Medical City Dallas and North Hills all got a "B." Methodist Health System earned an "A" at its Mansfield and Richardson hospitals, a "B" at Charlton (Dallas), and a "C" at Dallas Medical Center. North Texas' two county-supported hospitals, JPS in Fort Worth and Parkland in Dallas, both got a "C." Tenet Healthcare's two North Texas hospitals, Centennial Medical Center in Frisco and Doctors Hospital at White Rock Lake, both got a "B."

Among hospitals that aren't part of one of the big chains, Dallas Regional Medical Center (Mesquite) and Weatherford Regional Medical Center got an "A," while Lake Granbury Medical Center and Wise Regional Health System each got a "C." Texas Hospital for Advanced Medicine (now known as Dallas Medical Center), which according to its website is chartered by the city of Farmers Branch, got a "D."

-- Jim Fuquay

Cash America shares tumble on lower earnings outlook

Fort Worth-based pawn shop operator Cash America International saw its shares (ticker: CSH) slip more than 10 percent in early trading as its updated fourth-quarter outlook and 2014 outlook came in well below Wall Street expectations. The company said it expected to earn 95 cents to $1.05 a share in the fourth quarter, compared to $1.20 consensus estimate by financial analysts as $1.29 in the same quarter of 2012. It made its first 2014 earning outlook, estimating earnings between $4.20 and $4.40 a share for the year. That compared to an average Wall Street estimate of $4.91 a share.

The company's third-quarter earnings released Thursday were in line with analysts' estimates.  Cash America reported net income of $46.2 million, or $1.52 a share, which included several unusual items, on $438 million in revenue. After adjusting for the unusual items, the company earned $24.3 million, or 80 cents a share, near Wall Street's estimate of 81 cents. In its outlook for the fourth quarter and 2014, the company said it expects "growth in the company's pawn lending business, but its expectations for the balance of 2013 and into 2014 remain below historical growth rates in the pawn lending business." 

-- Jim Fuquay


United Way schedules health insurance exchange help sessions

United Way of Tarrant County will hold information sessions starting Thursday to individuals interested in using the new Health Insurance Marketplace to gain coverage under the Affordable Care Act. United Way is responsible for training and managing Navigators, who help people use the marketplace, commonly called "the exchange." Here are upcoming sessions:

Thursday, Oct. 24
12 – 3 p.m.
Tarrant County College South Campus, Student Center dining room 

Saturday, Oct.  26
1 – 4 p.m.
Azle Memorial Library 

Tuesday, Oct. 29
5 – 7:30 p.m.
Tarrant County College Southeast campus, Main Ballroom


Tuesday, Nov. 12
5:30 – 7:30 p.m.
Azle Memorial Library, Conference Room

-- Jim Fuquay



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