Citigroup
According to the FDIC, “Citigroup Inc. will acquire the banking operations of Wachovia Corporation; Charlotte, North Carolina, in a transaction facilitated by the Federal Deposit Insurance Corporation and concurred with by the Board of Governors of the Federal Reserve and the Secretary of the Treasury in consultation with the President. All depositors are fully protected and there is expected to be no cost to the Deposit Insurance Fund. Wachovia did not fail; rather, it is to be acquired by Citigroup Inc. on an open bank basis with assistance from the FDIC.”
"For Wachovia customers, today's action will ensure seamless continuity of service from their bank and full protection for all of their deposits." said FDIC Chairman Sheila C. Bair. "There will be no interruption in services and bank customers should expect business as usual."
Citigroup Inc. will acquire the bulk of Wachovia's assets and liabilities, including five depository institutions and assume senior and subordinated debt of Wachovia Corp. Wachovia Corporation will continue to own AG Edwards and Evergreen. The FDIC has entered into a loss sharing arrangement on a pre-identified pool of loans. Under the agreement, Citigroup Inc. will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC will absorb losses beyond that. Citigroup has granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing this risk.
In consultation with the President, the Secretary of the Treasury on the recommendation of the Federal Reserve and FDIC determined that open bank assistance was necessary to avoid serious adverse effects on economic conditions and financial stability.
"On the whole, the commercial banking system in the United States remains well capitalized. This morning's decision was made under extraordinary circumstances with significant consultation among the regulators and Treasury," Bair said. "This action was necessary to maintain confidence in the banking industry given current financial market conditions."
Blackwater
Blackwater Midstream Corp. a company involved in the field of fuel and chemical storage, announced today that it has entered into a definitive Purchase and Sale Agreement to acquire an 800,000 barrel storage terminal in the Port of New Orleans for $4.8 million. In addition, Blackwater Midstream Corp. has obtained a term sheet from J.P.Morgan Chase Co. (NYSE:JPM) to finance the acquisition. The closing is expected to occur within sixty days.
“This acquisition fits Blackwater’s strategic plan on many levels,” said Michael Suder, CEO and director of Blackwater Midstream. “The experience that our management team has in the New Orleans storage terminal market will be a key factor in expanding the business portfolio at the Blackwater New Orleans’ facility.” Suder added, “This acquisition will provide immediately accretive results to our company, while we continue the process of developing and constructing our new ten million barrel, world-class independent storage terminal facility in Garyville, LA.”
Frank Marrocco, Chief Commercial Officer of Blackwater Midstream stated, “The acquisition of the Port of New Orleans facility will allow our company to actively pursue new business opportunities across an array of manufacturing companies including agricultural products, specialty and commodity chemicals.”
Blackwater Midstream is also currently pursuing their acquisition strategy in the mid-Atlantic and Northeast regional markets.
Crosstex Energy
Crosstex Energy, L.P. (the Partnership) announced today that the majority of its assets in Texas and Louisiana sustained minimal physical damage as a result of Hurricane Ike. Most of the Partnership’s facilities along the Gulf Coast are resuming or have resumed operations. However, the Sabine plant, because of its proximity to the Louisiana Gulf coast, sustained some damage that is still being assessed. It is expected the plant will not be operational for at least four to six weeks. In addition, several offshore production platforms and pipelines transporting gas production to the Pelican and Bluewater processing plants were damaged by the storm, and it is unclear when offshore production will return in full. Consequently, it is anticipated that Pelican and Bluewater volumes could remain at a lower level until those repairs are completed by the owners of the platforms and pipelines.
Crosstex Energy, L.P., a midstream natural gas company headquartered in Dallas, operates approximately 5,700 miles of pipeline, 12 processing plants, four fractionators, and approximately 190 natural gas amine-treating plants and dew point control plants. Crosstex currently provides services for over 4.0 Bcf/day of natural gas, or approximately eight percent of marketed U.S. daily production.
Crosstex Energy, Inc. (the Corporation) owns the two percent general partner interest, a 34 percent limited partner interest, and the incentive distribution rights of Crosstex Energy, L.P.
The Partnership is negotiating with owners of other plants that sustained significant damage to process displaced gas from those plants in Crosstex’s facilities.
The Partnership estimates that the combined negative impact of Hurricanes Gustav and Ike on third-quarter cash flows will be approximately $12-14 million. The Partnership has not quantified the impact of the reduced operations at the Sabine, Pelican and Bluewater plants on fourth-quarter financial results. In addition, the Partnership is currently unable to estimate potential increases, if any, in its processing business from gas redirected to its facilities from other damaged plants in the region.
Crimson
Crimson Exploration Inc. today announced that its preliminary assessment of physical damage from hurricanes Gustav and Ike on its south Louisiana and Texas gulf coast properties is complete and it appears that physical damage from the storms is minimal. Production was shut-in at different fields, for varied amounts of time for the two storms, due to limited field access, loss of electrical power and the shut-in of processing capability in certain areas. The Company estimates that production for the third quarter of 2008 will be adversely impacted by an average of approximately 2,500 mcfe per day of natural gas equivalents for the quarter. Substantially all pre-hurricane production has been restored in the affected areas.
Drilling activity ceased as each storm approached as the rig crews evacuated the areas; however, the rigs sustained minimal damage and resumed drilling operations shortly after each storm passed.
Crimson also announced that it has no counterparty exposure to Lehman Brothers Holdings Inc. on its commodity or interest rate derivatives.
Travelers Insurance
To help ease the recovery process for customers living on the Texas coast, Travelers announced it will offer payment relief to customers impacted by Hurricane Ike through its Disaster Relief Billing Plan.
By implementing the Disaster Relief Billing Plan, Travelers will continue to insure impacted policyholders who are temporarily unable to make insurance payments. Disaster Relief Billing is available for those who reside in counties designated as disaster areas, sustained hurricane damage to their property, or were otherwise affected by the hurricane. The Disaster Relief Billing Plan helps to provide peace of mind to customers dealing with this catastrophe.
“Our primary concern is with the well-being of the families living on the Texas coast,” said Marlyss Gage, senior vice president for Travelers Enterprise Underwriting. “We hope that offering a Disaster Relief Billing Plan takes one thing off of the minds of individuals who are focused on getting their lives back to normal as quickly as possible.”
Customers can also work out temporary payment arrangements by contacting their Travelers insurance representative or independent agent. Travelers business insurance customers can call 800.252.2268 for assistance, and Travelers personal insurance customers can call 877.872.4708.
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