Early Briefing: Some D.C. Bond Rates Double
*The interest rates on some of the District's bonds doubled this week as a result of intense tightening in the credit markets. That means the city will have to fork over several hundred thousand more dollars to creditors this week, said D.C. Treasurer Lasana Mack. He added that the District had already budgeted for fluctuations in rates. The interest rate on the affected bonds increased from roughly 2.75 percent to 5.50 percent.
The District has about $600 million of these bonds, which are known as variable rate, because the interest rates can change from week to week.
Particularly affected were variable-rate bonds issued by the District and brokered through Lehman Brothers.The variable-rate bonds involved account for about 14 percent of all outstanding District bonds. The bonds fund police stations, schools and other capital spending. Mack said he doesn't expect the spike in rates to affect the District's ability to make these expenditures.
*Shares of Sirius XM have fallen 29 percent so far this month, closing yesterday at 94 cents, as weak revenue and earnings forecasts coupled with the company's hefty debt load have rattled investors. They hit a 52-week low of 68 cents in trading Tuesday.
Chief executive Mel Karmazin told investors and analysts Sept. 9 that the company would lose about $350 million this year on revenue of about $2.4 billion and end up with 1 million more subscribers, for a total of 19.5 million. Karmazin's revenue predictions -- he also said he expects $2.7 billion in 2009 -- were lower than analysts' estimates and would mean meant slower growth in revenue and subscribers than in previous years.
Compounding problems for the nation's sole satellite radio operator, New York-based Sirius XM faces $1.1 billion in debts that will be due in 2009. In February, $300 million of those debts come due. Karmazin said he is talking to banks to refinance that debt.
*Robert Franklin Miller greeted his victims in a swank office just blocks from the White House. He promised potential investors quick and hefty profits. He showed them photographs of investment properties, displayed financial records and played a slide show celebrating the promise of American Funding and Investment Corp. This was a company, according to Miller, that got homes on the cheap through foreclosures, then rehabbed them for sale to buyers with bad credit histories.
Investors' vanished in the hands of a man who authorities allege is among the region's most prolific and indefatigable con artists. Citing his refusal to give up the con game, prosecutors are seeking a 130-year prison term at Miller's sentencing on fraud charges today at the federal courthouse in Washington
*David M. Mott, former chief executive of MedImmune, joined the Chevy Chase venture capital firm New Enterprise Associates. Mott, who becomes a general partner at New Enterprise, will work on the health-care investment team, focusing on biotechnology and specialty pharmaceuticals.
September 18, 2008; 5:00 AM ET
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