Compiled by Julie Leupold
TOP STORIES
The Federal Reserve picked Newport Beach’s Pacific Investment Management Co. as one of four investment companies to manage the buying of $500 billion in mortgage bonds it plans to complete by June (see related story, page 1). BlackRock Inc., Goldman Sachs Asset Management, part of Goldman Sachs Group Inc., and Wellington Management were the others. The Fed plans to buy bonds of loans guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. The central bank first announced the program on Nov. 25 and said the action was taken to “reduce the cost and increase the availability of credit for the purchase of houses.”
TECHNOLOGY
Western Digital Corp.’s proposed deal to buy Fujitsu Ltd.’s disk drive business is off, according to reports. A Japanese news report quoted Fujitsu President Kuniaki Nozoe as saying there was, at the time, “zero chance” of a deal. Nozoe acknowledged that the two companies had been in talks, confirming long-running reports that the two were working on a deal for the past few months. The rising value of the Japanese yen made it difficult to agree on a price and other specifics of the deal failed to be worked out.
HEALTHCARE
Federal regulators issued a recall for an Advanced Medical Optics Inc. chemical used in eye surgery because of swelling and other health problems. The move by the Food and Drug Administration comes after Santa Ana-based Advanced Medical issued its own recall of the chemical, Healon D, in October. Regulators did their own recall after Advanced Medical recovered only 964 of the 1,450 units that were distributed to eye surgeons.
REAL ESTATE
A Wall Street analyst upgraded the stock of Irvine-based Standard Pacific Corp. and suggested the company could buy assets of other homebuilders. UBS AG analyst David Goldberg upgraded Standard Pacific to “buy,” saying the company’s $530 million investment earlier this year from private equity firm MatlinPatterson Global Advisers LLC should provide it ample cash to ride out the housing slump (see related story, page 1). Goldberg also wrote in a report that Standard Pacific could use funding from New York-based MatlinPatterson, its largest shareholder, to buy distressed assets from other homebuilders. Standard Pacific said it is in early acquisition talks with TOUSA Inc., a bankrupt builder based in Florida. Also last week, Fitch Ratings affirmed the rating of Standard Pacific and four other national builders, while cutting its ratings on nine builders.
Irvine-based California Coastal Communities Inc. sold 17 model homes at its Brightwater development in Huntington Beach to a local housing investor for $25 million. The homes are part of the 300-plus home development California Coastal has under way in the Bolsa Chica wetlands. California Coastal plans to lease back the models from Irvine-based IHP Capital Partners for at least the next three years for about $9.7 million. The two will split profits once the lease expires and the model homes are sold to homebuyers. California Coastal is using about $21 million from the sales to pay down debt.
OTHER NEWS
Irvine lawyer Sandeep Baweja admitted to burning through almost all of a $2.7 million settlement that was supposed to be shared by about 1,000 plaintiffs he represented in a class-action labor lawsuit. In legal filings, Baweja cites his inexperience as a stock market investor and this year’s market freefall for the massive losses,money he had no right to transfer without court approval, according to legal documents. Baweja admitted to losing all but about $54,846 of his clients’ money on high-risk bets on the stock market, and he said he would notify prosecuting authorities and the State Bar of California of his actions. The settlement funds were sitting in an account at Union Bank of California NA in Irvine before Baweja transferred them.
ECONOMIC INDICATORS
UP: Homeownership as the local supply of distressed homes dropped 7% in late December from a month earlier, according to Altera Real Estate.
DOWN: Hotel occupancy, which dropped 5% to 71.6% in October from a year earlier, according to PKF Consulting.
