CHICAGO, May 25, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: BP Plc (NYSE: BP), Transocean Ltd. (NYSE: RIG), Halliburton Company (NYSE: HAL), Anadarko Petroleum Corporation (NYSE: APC) and Apartment Investment and Management Company (NYSE: AIV).
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Here are highlights from Tuesday's Analyst Blog:
BP Secures $1.1B Toward Spill Costs
BP Plc (NYSE: BP) has taken yet another small but crucial step toward securing capital to pay out the Gulf of Mexico (GoM) blowout-related costs. The contribution will come from Moex Offshore 2007 LLC, which agreed to pay BP approximately $1.065 billion. The amount was, however, much lower than the $2.14 billion that BP had billed to Moex Offshore.
Moex Offshore, a unit of Japan's Mitsui & Co., was one of the co-owners of the disastrous Macondo well with a 10% interest. It reached an agreement with the British major to wrap up all mutual claims related to the incident. Importantly, this is the first time that BP will receive monetary assistance to cover its GoM costs.
The latest settlement is an important stride for the British major as it increases the likelihood of the similar deals with other Macondo co-partners, like Transocean Ltd. (NYSE: RIG), Halliburton Company (NYSE: HAL) and Anadarko Petroleum Corporation (NYSE: APC). BP also reaffirmed that it will continue to pursue these co-owners for paying their respective shares of clean-up costs and associated damage-related penalties.
Although Anadarko (which had a 25% interest in Macondo) recently indicated a possible settlement for around $2.66 billion, it denied any responsibility or damage/clean-up related due. The U.K. oil major had billed Anadarko more than $5 billion.
In April last year, the Gulf of Mexico oil spill incident had shattered BP's basic business fundamentals and cost around $41 billion in capping and cleaning of damages as well as compensation for those affected. BP then took resort to various upstream activities and a $30 billion planned divestiture program to clear all its charges.
Just when BP was trying to focus on clearing its Macondo mess, things took a bad turn when its long-awaited share-swap agreement with Russia's state-operated oil company collapsed recently. However, management remains positive on the growth profile of BP and anticipates marked recovery as well as consolidation to reduce operational risk or oil spill related assignments.
We believe the Moex Offshore settlement will set an example for the other partners to follow. Moex Offshore has also displayed great corporate citizenship by contributing to the GoM costs.
Aimco Lowers Outlook
Apartment Investment and Management Company (NYSE: AIV) or popularly known as Aimco in real estate investment trust (REIT) has repaid 19 non-recourse property loans, scheduled to mature between 2012 and 2016, with proceeds from new loans. The new loans are all long-term, fixed-rate, non-recourse property loans totaling $674 million. The new loans were closed in three parts within a six-month period, with $219 million in December 2010, $121 million in March 2011 and $334 million in May 2011.
Each loan carries a 10 year term and provides for monthly amortization with full repayment over 30 years. The company sold the new loans to Freddie Mac, which intends to secure the new loans through a new multi-family private label securitization in the next 30 days. In a bid to effectively reduce its debt obligation, Aimco has agreed to purchase the first loss and mezzanine position from Freddie Mac by purchasing notes with a face value of $101 million for approximately $51 million. The discount of $50 million will be accreted into Aimco's income over the ten-year term of the notes.
The net effective cost of this refinancing transaction and securitization is estimated to be 5.58%, taking into account the interest on the new loans, the prepayment penalties for the previous loans and estimated interest income from the securitization trust notes.
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