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Published October 20, 2008 at 6:04 PM
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Fears of a drawn-out credit market ice age subsided somewhat on Monday
as the interbank lending rate LIBOR fell for the sixth straight day and
the spreads on credit default swaps of major U.S. banks all tightened.
The London interbank offered rate for dollars posted its largest
decline in nine months with one-month LIBOR for dollars at 3.75%, and
three-month LIBOR for dollars at 4.06%. Investors saw this as light at
the end of the frozen credit tunnel sending the Dow Jones Industrial
Average up 413.21 points to close at 9,265.43.
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A lending thaw could bring some new life to the somewhat dry deal
pipeline. A pair of deals announced Monday could be small signs of
confidence in the capital markets.
- NRG Energy Inc., which found itself
a target of an unsolicited bid, soared 29.33% Monday following news
that Exelon Corp., the leading U.S. nuclear power producer, offered
$6.2 billion, or roughly $26.43 per share, all-stock takeover proposal
to NRG on Sunday. The combination would create the largest power
producer in the U.S.
- Pacific Sunwear of California Inc., another
target of an unsolicited bid, jumped 4.97% to close at $3.80 per share
as extreme sports concept retailer Adrenalina is appealing directly to
the shareholders and the board of Pacific Sunwear with a buyout offer
of $4.50 per share or $295 million in cash and stock.
- Michael Rudnick
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