Bausch & Lomb Plans I.P.O.

Bausch & Lomb, the eye-care company primarily owned by Warburg Pincus, filed documents on Friday to go public again.

The company said in the registration filing that Warburg Pincus would continue to own a majority of the stock after the offering. A Bausch & Lomb spokesman on Friday declined to comment on the size of the offering.

In December, Bausch & Lomb was exploring strategic options for the company. DealBook reported that it had hired Goldman Sachs to explore a sale, hoping to fetch more than $10 billion. At the time, people briefed on the matter said that if an acceptable bid was not found, Warburg Pincus would likely pursue an initial public offering of the company instead.

Earlier this year, people briefed on the matter said Warburg was seeking up to $10 billion in a sale or I.P.O.

On March 15, the company’s board declared a cash dividend of $7.40 a share, resulting in distributions of $772 million to shareholders, primarily Warburg Pincus. The company financed the dividend payout by borrowing $700 million under a new unsecured loan as well as $100 million under its revolving credit facility.

Warbug Pincus had bought Bausch & Lomb in 2007 for about $3.67 billion, in a bid to help lift the company’s fortunes. A year earlier, the company had been forced to recall its popular ReNu With MoistureLoc contact lens solution because of manufacturing problems.

Bausch & Lomb reported a net loss of $68.3 million in 2012, down from a loss of $123.9 million in 2011. It had revenue of $3.04 billion last year, up from $2.8 billion in 2011.

Bausch & Lomb, founded in 1853 by John Jacob Bausch and Henry Lomb as an optical goods shop in Rochester, had previously been publicly traded from December 1958 to October 2007 under the symbol “BOL.”

The company now has more than 11,000 employees worldwide and is still based in Rochester.

JPMorgan Board Says Dimon Should Remain as C.E.O. and Chairman

JPMorgan Chase‘s board said on Friday that it was standing behind Jamie Dimon, the bank’s chairman and chief executive, amid calls from some investors that the two jobs be split.

In the bank’s proxy filing, the 11-member board said that Mr. Dimon should continue to hold both positions, as he has since 2006. “The board has determined that the most effective leadership model for the firm currently is that Mr. Dimon serves as both,” the filing said.

In the wake of a multibillion trading loss that roiled the bank’s executive ranks, some investors have been agitating for JPMorgan Chase to separate the roles. In February, a vocal group of shareholders, including the American Federation of State, County and Municipal Employees and pension funds in New York and Connecticut filed a resolution to divide the chairman and chief executive posts.

Their effort appeared to gain momentum last week after a Senate hearing and scathing report into the trading losses, which that stemmed from a soured bet on credit derivatives. The 301-page Senate report painted a critical portrait of Mr. Dimon. As the trades grew more disastrous in 2012, the chief executive failed to rein in the risk, the report found. Instead, he allowed the bank to tweak its internal alarm system, allowing traders in the bank’s chief investment office, to place increasingly risking bets.

Since announcing the losses, which have swelled to roughly $6.2 billion, Mr. Dimon has struck a contrite note, moving  aggressively to overhaul the bank’s management and risk controls.

On Friday, Denise Nappier, the Connecticut state treasurer, continued to call for a division of the chief executive and chairman roles.

“We don’t believe the person responsible for these costly mistake should be overseeing reforms,” she said.

A nonbinding measure on a split received 40 percent backing from shareholders last year and this year’s resolution is expected to gain new votes as scrutiny of Mr. Dimon grows.

In January, JPMorgan’s board slashed Mr. Dimon’s compensation. The decision came after a series of marathon meetings led by Lee R. Raymond, the former chief executive of ExxonMobil who heads the board’s compensation committee. The board voted unanimously to reduce Mr. Dimon’s pay to $11.5 million from $23.1 million a year earlier.

Despite that move, the board still supports Mr. Dimon. Under his leadership, the bank has recorded record profits.

After investigating the trading losses at the bank, the board determined that while Mr. Dimon had “ultimate responsibility” for the losses, he took strong steps to stem the losses and rectify the problems. In its filing on Friday, the board said that Mr. Dimon “responded forcefully.”

A separate internal report into the trading losses led by Michael J. Cavanagh, co-head of the corporate and investment bank, largely aimed its most scathing attacks on the executives who directly oversaw the traders who made the troubled wagers.

Judges’ Spat Strikes a Chord Among Deal Makers

Deal makers delivered a verdict on snarky judges at the annual M.&A. jamboree in New Orleans this week. The spectacle of Delaware jurists bashing the clever bromides and superfluous legal rulings of colleagues elicited hoots of delight from the assembled lawyers and bankers. The criticism is on target. To avoid any confusion, courts should stick to the facts and the law.

It’s rare for judges to call out other judges beyond the formal appeals process. Last July, the U.S. Supreme Court sprung leaks about justices ostracizing their chief, John Roberts, for voting to uphold the health care law. In September, Delaware Supreme Court Chief Justice Myron Steele criticized controversial Chancellor Leo Strine for going on a “diatribe” in a recent opinion.

The scarcity of such criticism explains why merger practitioners almost dropped their beignets on Thursday as Delaware judges, past and present, ripped their colleagues. Justice Steele led the way, scolding peers for their colorful but extraneous comments. Every time a judge “opens his mouth in a courtroom, he makes the law,” he said.

It sounded like a thinly veiled poke at Chancellor Strine, but others were subjected to similar treatment. Delaware Supreme Court Justice Randy Holland, for instance, wrote a 2003 opinion barring a company from committing to sell itself despite the possibility of a better offer. Former Judge William Allen on Thursday called it the “worst Delaware opinion” ever, largely because it wandered unnecessarily from established law.

The invective, while entertaining, also makes a useful point. When ordinary legal constraints fall short, judges can use the bully pulpit to right wrongs and guide the behavior of lawyers and their clients. Chancellor Strine is a master of the method, as evidenced by his targeting Wall Street conflicts of interest.

Straying too far, however, can create uncertainty. It’s often tough to know whether a judge is signaling how he will rule in the future or simply popping off. As Mr. Allen pointed out, Justice Holland’s 2003 opinion created widespread confusion over when a merger could actually close.

The topic clearly struck a chord among the gathered professionals who handle the nuts and bolts of putting companies together. As they shuffled out for a session break, laudatory comments rippled across the hall. Of course, their opinion won’t necessarily stand up in court.

Reynolds Holding is a columnist at Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Gibraltar Seeks to Woo Brazilian Hedge Funds and Private Equity

RIO DE JANEIRO - Tiny Gibraltar is trying to cash in on Brazil’s rising wealth.

Gibraltar, the British self-governed territory south of Spain, is now working to lure hedge funds, private equity and other investors in Brazil and Latin America to expand to its shores.

Government officials visited Rio de Janeiro this week to promote Gibraltar’s stability, access to the European Union and low taxes. (Interest, dividends and capital gains are not taxed in Gibraltar). The officials said that they had met with approximately 20 firms on the sidelines of a major hedge fund conference here.

Gilbert Licudi, the territory’s minister of financial services, said in an interview with DealBook that Gibraltar is a natural bridge to connect European investors surging appetite for Latin America.

Gibraltar does have two funds with Brazilian investors, he said, but the territory is otherwise virtually unknown in Brazil and Latin America. Changing that appears to be a priority of the current government.

“It is part of the strategy that this government has to go beyond our traditional jurisdictions like the UK and Switzerland and to extend to emerging economies that are doing well like Brazil,” Mr. Licudi said.

In its efforts to woo Brazilian investors, Gibraltar faces competition from better known locales like Dublin and Luxembourg as well as the Caribbean. But it sees what it calls a shift toward greater transparency in the financial sector, including efforts in the United States as a factor in its favor.

“It is clear that there has been this global move toward greater openness and transparency,” Mr. Licudi said. He added that, “We pride ourselves now on being one of the jurisdictions that is open and transparent in terms of exchange of information.”

Gibraltar is perhaps mostly famous for its rock, but it has also developed a strong financial services sector which today accounts for 20 percent of its gross domestic product. Last year it passed legislation making it easier for funds to get established. Its economy is forecast to grow to £1.65 billion by 2015.

The territory does have an uphill battle in recruiting Brazilian hedge funds. Most are focused on the domestic market here so officials are also targeting international funds that invest heavily in Brazil and Latin America in general.

Next month, Mr. Licudi will travel to New York to meet with several hedge funds that have already expressed interest.

Chinese Solar Giant’s Bankruptcy Presents a Test

The main operating company of Suntech Power Holdings is in bankruptcy in China, less than a week after attempting to win some sort of award for the oddest restructuring attempt ever.

Shortly before its bonds were due, the company announced that a majority of bondholders had agreed to forgive the failure to pay when the bonds came due on March 15.

The remainder of the bondholders said “bully for you,” but the bond indenture clearly provides in section 6.07 that the right to timely payment is held by each bondholder individually. As is typical of bonds issued under the 1939 Trust Indenture Act, the right to timely payment cannot be changed without unanimous consent.

This follows the earlier ousting of the company’s founder. In a word, Suntech is a bit of a mess right now.

Now some distressed debt investors get to find out what exactly it is you buy when you buy American-issued debt in a company incorporated in the Cayman Islands and doing business in China. I suspect the answer will be “not much.”

The case will be one of the highest profile tests of the still relatively new Chinese restructuring law, which was intended to incorporate the best features of British-American corporate bankruptcy law. To date, most reports have been that the law has primarily been used to merge publicly traded sells into more viable start-ups. Suntech presents the chance for a more traditional reorganization.

But what value, if any, will remain for creditors of the Cayman Island holding company That’s a bit unclear.

There may be an attempt to file an involuntary bankruptcy petition against the holding company.

But wait a second, just where might such a petition be filed

After all, this is a Chinese company incorporated in the Cayman Islands. There are at least three obvious places that could host a bankruptcy case, with New York being the least obvious of the three.

No doubt the bondholders, noting the New York choice of law clause and submission of jurisdiction in Manhattan in the indenture, would greatly prefer to see this case filed in New York.

Better hurry, because it seems pretty clear the company has no great desire to experience Chapter 11.

And given the limited connection to the United States, it also seems likely that a U.S. bankruptcy judge would defer to an earlier case filed in either China or even the Cayman Islands. And if the latter, a host of really boring case law makes clear that an American Chapter 15 case might not even be possible.

All of which raises the real question of whether this case even belongs in Chapter 11. Chapter 11 works fine for foreign debtors who want to work out a consensual deal with their creditors.

But the bankruptcy court has very limited ability to force participation on a reluctant foreign corporate debtor.

Suntech indenture

Stephen J. Lubben is the Harvey Washington Wiley Chair in corporate governance and business ethics at Seton Hall Law School and an expert on bankruptcy.

Why Cyprus Will Pay Dearly

Cyprus will pay dearly for its sins. The Mediterranean island has committed many follies over the years â€" and is still making mistakes.

The Cypriots seem congenitally inclined to overestimate their negotiating position. In recent years, their first big folly was to reject in 2004 the United Nations plan for uniting their island. That irritated their European Union partners, meant that Cyprus still has a weak strategic position vis-à-vis Turkey and leaves a jagged scar across the island.

The last Communist government was also criminal in its failure to act as the crisis in Greece threatened to swamp Cyprus. If it had been willing to restructure the banks, the Cypriot economy would now be in a lot better shape. It was also much easier to do a deal with Germany then than now, when Angela Merkel is only months away from an election.

The new center-right president, Nicos Anastasiades, has been in office for less than a month. But he has managed to turn a crisis into a disaster by initially backing a plan to impose a 6.75 percent tax on insured depositors.

Of course, the other euro zone governments, the European Central Bank and the International Monetary Fund shouldn’t have said O.K. to this terrible idea either. And Mr. Anastasiades certainly had a gun to his head: he had to rustle up money somehow given that the euro zone was rightly unwilling to lend Cyprus more than 10 billion euros, leaving the country with a 5.8 billion euro funding gap.

But the Cypriot president is ultimately responsible for his actions. There was an alternative: tax the uninsured depositors at 15.5 percent and leave the insured ones untouched. Mr. Anastasiades didn’t want to do this as it would have angered Russia and undermined Cyprus as an offshore financial center. But both of these have happened anyway.

When the president found he couldn’t sell the deposit grab to his people, he backtracked. There was jubilation in the streets. How quickly the mood has changed now that lines have started forming outside cash machines.

The Cypriot government then asked Russia for help. But again Nicosia overestimated its negotiating position. Moscow wasn’t interested in buying a bankrupt bank or lending more money. Michael Sarris, Cyprus’ finance minister, was sent home empty handed.

Meanwhile, the E.C.B. has threatened to pull the plug on insolvent Cypriot banks unless there is a deal with the euro zone by Monday night. The government has therefore scrabbled together a “plan” with three elements: “resolving” Cyprus Popular Bank, the country’s second-largest and most troubled lender; imposing capital controls; and creating a national “solidarity fund”.

The best of these ideas, apparently originally proposed by the I.M.F., is to resolve Cyprus Popular Bank. It would be divided into a good bank and a bad one. The insured depositors would go with the good assets; the uninsured with the rotten ones. They might suffer 40 percent losses. That’s a lot more than the original deposit tax but the losses would be focused on one bank. The government’s bill for shoring up banks would be cut by 2.3 billion euros.

Imposing capital controls may be necessary. But it is hardly a cause for joy. Even if the banks re-open on Tuesday, there could be so many restrictions on taking out money that it will look like they are still partially shut.

The solidarity fund is a half-good idea. The plan is to pop pension fund assets, offshore gas reserves, the Cyprus church’s wealth and some state property into a fund. The hope seems to be to raise enough cash to fill the rest of the 5.8 billion euro hole. Even if it worked, it would amount to a fire sale of the county’s assets.

But this scheme has already run into a roadblock. The German chancellor says she will not be party to a scheme to grab pension assets.

Cyprus’ problems are far worse than finding a billion or two to make up the gap from pension assets. Last week, it had a chance of salvaging most of its financial center. Now that will be largely destroyed. Last week it was staring at a middling recession. Now, with confidence crushed, its economy faces a slump.

All the number-crunching behind last week’s deal with the troika is therefore out of date. The country will need more than 17 billion euros because the fiscal deficit will rise and an avalanche of bad debts will push up the cost of shoring up the banks. Meanwhile, Nicosia won’t be able to sustain even 10 billion euros of extra debt because its economy will be smaller than envisaged.

Euro zone finance ministers indicated last night that they were willing to go along with a deal based on the old numbers. But even then Cyprus would be stuck with a zombie economy and zombie banks. It’s also unclear whether the I.M.F., which has argued strenuously for debt sustainability, could sign off on such a deal without destroying its own credibility.

It may be best to recognize this and go for an even more severe restructuring of the banking sector. At the minimum, Bank of Cyprus, the country’s largest lender, would need to be resolved along with Cyprus Popular Bank.

The Cypriot M.P.s won’t like any of this. But what is the alternative Endless capital controls Printing a parallel currency so people get Cypriot pounds instead of euros from the cash machines Or quitting the euro entirely

There are no good options. But the longer it takes for Cyprus to get real, the greater the damage.

Hugo Dixon is co-founder of Breakingviews and editor-at-large at Reuters News. For more independent commentary and analysis, visit breakingviews.com.

As Profit Slips, Credit Suisse Increases C.E.O. Pay by 34%

LONDON - Even as the bank’s profit slipped, Credit Suisse increased pay for its chief executive, Brady W. Dougan, by 34 percent.

Mr. Dougan received 7.8 million Swiss francs ($8.2 million) for 2012, compared to 5.8 million francs for the previous year, the bank said in its annual report published on Friday. Robert Shafir, the co-head of the private banking and wealth management unit, was the highest paid member of Credit Suisse’s executive board, receiving 10.6 million francs, compared with 8.5 million francs in 2011.

The rising pay packages could add to the scrutiny surrounding banks.

Big banks have come under pressure to cut their compensations levels, as their stocks stagnate and they lay off staff. A new law in Switzerland, which is expected to come into place in next year, will also give shareholders greater say in pay. European policymakers also are pushing ahead with stringent caps on bankers’ bonuses that are expected to take effect over the next two years.

The move comes as many top executives at Europe’s largest banks continue to pocket large compensation packages. On Wednesday, Rich Ricci, head of Barclays’ investment banking unit, cashed in $26 million of deferred shares as part of bonuses that he received from 2009 to 2011.

Like many European banks, Credit Suisse has been attempting to remake its business, in the face of a sluggish global economy and new industry regulation. It’s been a difficult profit environment. Last year, the company’s net income dropped by 31 percent to 1.35 billion Swiss francs. During the same period, the stock rose just around 4 percent.

Credit Suisse’s compensation committee said Mr. Dougan’s compensation was based on “his achievements in positioning the firm for the future,” including “the significant progress made in transitioning the business to the new regulatory and market environment and to meeting challenging new capital requirements.”

As part of a major overhaul of the bank’s operations, the Swiss bank announced in November that it was appointing a co-head of investment banking and merging its asset management division into its wealth management and private banking unit. Credit Suisse also plans to cut costs by $4.83 billion by the end of 2015.

The push is starting to show some results. In the last quarter of 2012, Credit Suisse had a profit of was 397 million francs in the three months until Dec. 31 of last year. It posted a loss of 637 million francs in the same period the previous year.

As Profit Slips, Credit Suisse Increases C.E.O. Pay by 34%

LONDON - Even as the bank’s profit slipped, Credit Suisse increased pay for its chief executive, Brady W. Dougan, by 34 percent.

Mr. Dougan received 7.8 million Swiss francs ($8.2 million) for 2012, compared to 5.8 million francs for the previous year, the bank said in its annual report published on Friday. Robert Shafir, the co-head of the private banking and wealth management unit, was the highest paid member of Credit Suisse’s executive board, receiving 10.6 million francs, compared with 8.5 million francs in 2011.

The rising pay packages could add to the scrutiny surrounding banks.

Big banks have come under pressure to cut their compensations levels, as their stocks stagnate and they lay off staff. A new law in Switzerland, which is expected to come into place in next year, will also give shareholders greater say in pay. European policymakers also are pushing ahead with stringent caps on bankers’ bonuses that are expected to take effect over the next two years.

The move comes as many top executives at Europe’s largest banks continue to pocket large compensation packages. On Wednesday, Rich Ricci, head of Barclays’ investment banking unit, cashed in $26 million of deferred shares as part of bonuses that he received from 2009 to 2011.

Like many European banks, Credit Suisse has been attempting to remake its business, in the face of a sluggish global economy and new industry regulation. It’s been a difficult profit environment. Last year, the company’s net income dropped by 31 percent to 1.35 billion Swiss francs. During the same period, the stock rose just around 4 percent.

Credit Suisse’s compensation committee said Mr. Dougan’s compensation was based on “his achievements in positioning the firm for the future,” including “the significant progress made in transitioning the business to the new regulatory and market environment and to meeting challenging new capital requirements.”

As part of a major overhaul of the bank’s operations, the Swiss bank announced in November that it was appointing a co-head of investment banking and merging its asset management division into its wealth management and private banking unit. Credit Suisse also plans to cut costs by $4.83 billion by the end of 2015.

The push is starting to show some results. In the last quarter of 2012, Credit Suisse had a profit of was 397 million francs in the three months until Dec. 31 of last year. It posted a loss of 637 million francs in the same period the previous year.

Shipping Woes May Weigh on European Banks

FRANKFURT â€" Can a ship float and be underwater at the same time If it has been financed by a European bank, the answer may be yes.

A glut of ships, along with slack demand for shipping in the weak global economy, has slashed the value of cargo ships. According to some estimates, as many as half the cargo carriers on the high seas today may no longer be worth as much as the debt they carry â€" putting them underwater, in financial jargon. Their resale value is typically lower than the amount borrowed and spent to build them.

Large vessels that might have sold for about $150 million new in 2008 today fetch about $40 million, according to Nicholas Tsevdos, a shipping specialist at CR Investment Management, which helps banks deal with distressed assets. And with cargo fees near record lows, many vessels are not earning enough to make debt payments, either.

As European leaders agonize about how to rescue Cyprus banks, the formerly obscure world of ship finance is a reminder of how much cleanup work still lies ahead for European banks. The growing fear is that some lenders, almost all of them in Europe, have yet to confront the scale of potential losses from an estimated $350 billion in loans made to the shipping industry.

“Many banks are still shackled by the leftover effects of the crisis,” Christine Lagarde, the managing director of the International Monetary Fund, told an audience in Frankfurt in the past week, without singling out any specific assets. “This is the weak link in the chain of recovery.” She urged banks to take a harder look at their problem loans.

Whether the risk from shipping loans is serious enough to put another torpedo into the euro zone financial system is hard to say because of a glaring lack of detailed information about banks’ portfolios of shipping loans.

Andreas R. Dombret, a member of the executive board of the German Bundesbank who is responsible for monitoring financial stability, said he thought the shipping crisis, while serious, did not pose a broad threat to the euro zone. “It’s not a concern for the stability of the financial system,” he said during an interview. “It’s not systemic.”

But he and other bank overseers are stepping up pressure on financial institutions to address their problems. Shipping is “a substantial regional and sectoral risk in the banking industry,” Mr. Dombret warned an industry gathering in Hamburg last month. It was one of the first expressions of concern about the shipping problem by a bank overseer of his stature.

Under pressure from regulators, local governments that own most of HSH Nordbank in Hamburg said last Tuesday that they would raise their guarantees for the bank to 10 billion euros, or $13 billion, from 7 billion euros. Though only a midsize bank, HSH is the biggest lender to the shipping industry, with more than 30 billion euros in outstanding loans. The announcement, by the City of Hamburg and State of Schleswig-Holstein, amounted to an admission that losses from shipping were greater than earlier estimates and an example of the cost to taxpayers already built in to the shipping crisis.

The shipping downturn, which began in 2008, has already driven several large fleet operators into bankruptcy. The Overseas Shipholding Group, the largest American tanker operator, filed for bankruptcy in November. The fear is that some of the banks most active in ship finance, which are concentrated in Germany, Scandinavia and Britain, are in denial about their potential losses.

“It’s probably the most serious commercial problem that the banks have,” said Paul Slater, chairman of the First International Corporation, a consulting firm in Naples, Fla., that specializes in shipping. Banks with large portfolios of shipping loans “are just not taking the hits,” he said. “They are saying, ‘Give it time and it will work out,’ and it’s just not going to do that.”

For weak banks, the temptation to play down potential losses may be great. A frank appraisal of their losses would force some to raise billions in new capital or even to declare insolvency. That is true not only of shipping loans but also of other categories like commercial real estate, and remains a fundamental problem for the euro zone economy.

The uncertainty about banks’ true financial health fosters mistrust among institutions, makes them reluctant to lend to each other and is partly responsible for a shortage of credit for businesses and consumers.

As toxic assets go, ships are particularly troublesome. Unlike a plot of land, they require costly maintenance. They lose value over time from wear and tear or because more modern, fuel-efficient vessels make them obsolete. It even costs money to take an underused ship out of service and park it somewhere. The waters off Falmouth in Britain and Elefsina in Greece are popular anchoring spots for idle ships.

Investment funds that specialize in buying distressed debt have been wary about putting money into ships. That makes it hard for banks to unload unwanted shipping assets.

“Every hedge fund in the world is trolling Europe, but they are bidding on a small percentage of relatively good assets,” said Jacob Lyons, managing director of CR Investment Management in London, which helps banks manage shipping loans and other damaged assets.

Mr. Dombret of the Bundesbank pointed out that the banks that had made the most loans to the shipping industry were in nations like Germany or the Scandinavian countries whose governments had the least debt and were best able to cope with a banking crisis.

Mr. Dombret did not single out individual banks, but German banks like HSH Nordbank and Commerzbank in Frankfurt were among the top shipping lenders because German tax breaks favored ship finance. German banks’ exposure to shipping has been estimated at about 100 billion euros, more than double the value of their holdings of government debt from Greece, Ireland, Italy, Portugal and Spain. Aside from German banks, the DNB Group in Norway and Nordea in Sweden are big players in ship finance, as are Lloyds Banking Group and the Royal Bank of Scotland in Britain.

It does not necessarily follow that these banks will face losses on their shipping portfolios. Some of the savviest lenders probably still make money, or at least have made an honest appraisal of the value of their portfolios and set aside enough money to cover possible losses.

“We are very happy with our shipping business,” said Rodney Alfven, head of investor relations at Nordea. The bank, which is listed in Stockholm, increased the amount of money it set aside for potential bad loans in shipping to 63 million euros in the final three months of 2013 from 54 million euros the previous quarter. Over all, Nordea, the largest Swedish bank, has consistently made a profit from its shipping business, Mr. Alfven said. Shipping loans account for only 2 percent of Nordea’s lending, according to the bank.

The sorry state of global shipping stems from a shipbuilding boom that peaked in 2008, just before the global financial crisis, and created a glut in cargo capacity. Rates for nonliquid cargo are half or less of the level needed for shipowners to break even, according an estimate by the consultant KPMG. That means that ships are doubly damaged. They do not earn enough to cover interest on their debt, nor can they be sold for the value of the loan.

Nordea has told investors it expects shipping to begin to recover in 2014, as the world economy rebounds. But others are more skeptical.

“By any kind of measure, this is a deeper and more difficult downturn than we’ve had in the last decade or two,” Mr. Tsevdos at CR Investment said.

Except for some specialized categories of ship, like liquid natural gas carriers, Mr. Tsevdos said, “I don’t think there is a lot of indication for a lot of sectors that rates are going to turn around soon.”

Senate Republicans Push to Slow Financial Rule-Writing

Congress cut a deal to keep the lights on in Washington. But new measures in the Senate may cut the power of financial regulators to curb Wall Street risk taking.

Senate Republicans are seeking on Friday to erect potential new obstacles to financial rule-writing at agencies like the Securities and Exchange Commission and Federal Deposit Insurance Corporation. The non-binding amendments tucked into the Senate budget plan call on agencies to evaluate more carefully the economic effects of new regulation, cutting off potential shortcuts to so-called cost-benefit studies.

Lawmakers are unlikely to reconcile the Senate budget with the House’s plans, making the measures more symbolic than anything else. And it is unclear whether lawmakers will approve the Republican amendments to the Senate’s blueprint, the chamber’s first budget since 2009. The votes are part of what Washington insiders labeled “vote-o-rama” â€" dozens of amendments flying through the Senate on Friday.

The Republican author of one financial amendment â€" Senator Susan Collins of Maine â€" argues that new financial rules should tread lightly on the fragile economy. A summary of Ms. Collins’s amendment to the budget plan calls for “sensible regulatory reform.”

But consumer advocates predict a fallout for regulators, who are putting the finishing touches on dozens of new rules to rein in the derivatives market and proprietary trading.

While the new Senate measures would be non-binding, they could serve as a political warning to regulators writing rules under the Dodd-Frank Act. Already, corporate groups have sued to halt several Dodd-Frank rules, complaining that agencies failed to produce a robust cost-benefit analysis.

The latest swipe at the rules, consumer advocates say, could further deter financial reform and impede the authority of agencies that operate independent of the White House.

“The costs of the financial crisis and benefits of avoiding the next one are crystal clear. Having financial regulators jump through more hoops will only further delay the process of making Wall Street accountable to the American public,” said Amit Narang, a regulatory policy advocate at Public Citizen, a nonprofit government watchdog group.

The measures echo bills floating around Congress for months. Ms. Collins last year pushed legislation that would impose a 13-point test for rule-making and empower the White House to second-guess new regulations, a far harsher version of the amendments facing a vote on Friday. As regulators pushed back, the bill stalled.

But the Senate amendments could breathe new life into the effort â€" an alarming prospect to Mr. Narang.

“This will further delay the already glacially slow process of finally making Wall Street accountable to the American public by instituting common-sense Dodd-Frank financial reforms,” he said.

Schroders in Talks to Buy Cazenove Capital

The British fund manager Schroders said on Friday that it was in discussions to buy local rival Cazenove Capital for an undisclosed fee. Under British takeover rules, Schroders has until April 19 to decide whether to bid for Cazenove Capital. Read more »

Schroders in Talks to Buy Cazenove Capital

The British fund manager Schroders said on Friday that it was in discussions to buy local rival Cazenove Capital for an undisclosed fee. Under British takeover rules, Schroders has until April 19 to decide whether to bid for Cazenove Capital. Read more »

Blackstone Circles Dell

BLACKSTONE CIRCLES DELL  |  The Blackstone Group may yet emerge as a challenger to the proposed $24 billion buyout of Dell. With a deadline approaching at midnight Friday, the private equity firm is weighing whether to make an offer for all or part of the computer maker, though “some people close to Blackstone are skeptical that any offer will materialize,” DealBook’s Michael J. de la Merced reports. Still, among the parties that have looked at Dell’s books under a “go-shop” period run by a special committee of the company’s board, Blackstone is considered the likeliest to make an offer, people briefed on the matter said.

A Blackstone bid would have some important advantages. “The firm has talked to Southeastern Asset Management, a large shareholder in Dell, about the possibility of contributing its 8.4 percent stake toward a rival deal, the people briefed on the matter said. Southeastern has argued publicly and privately that it would favor a proposal that would allow all shareholders to continue being investors in Dell.” Earlier this year, Blackstone hired Dell’s chief in-house deal maker, David Johnson, who is seen as a main advocate behind Blackstone’s interest. Blackstone has also approached Mark V. Hurd, Oracle’s president and the former chief executive of Hewlett-Packard, about possibly leading Dell, although he did not appear interested, Mr. de la Merced reports.

There is a good chance that no rival will emerge to challenge the offer from Dell’s founder, Michael S. Dell, and the private equity firm Silver Lake. “If there is no rival bid, next week, Dell is expected to begin trying to persuade shareholders that the buyout offer on the table represents the highest price the company could fetch for its rapidly declining business.”

BROTHER OF RAJARATNAM IS INDICTED  |  Rengan Rajaratnam, a younger brother of the fallen hedge fund titan Raj Rajaratnam, was accused of being a pawn in his brother’s insider-trading conspiracy, as prosecutors announced charges on Thursday, DealBook’s Peter Lattman reports. “As alleged, Rengan Rajaratnam and his brother shared more than DNA; they also shared a penchant for insider trading,” said Preet Bharara, the United States attorney in Manhattan. Rengan Rajaratnam, 42, is thought to be living in Brazil and has not been arrested; federal authorities are using extradition laws to bring him to the United States.

“Though a much less influential player on Wall Street than his brother, Rengan is seen a seminal figure in the government’s broad inquiry into insider trading at hedge funds,” Mr. Lattman writes. “The origins of the investigation, which has led to 77 prosecutions of hedge fund employees and corporate executives, stretch back more than a decade. But a crucial breakthrough came in 2006 during an inquiry by the Securities and Exchange Commission into Sedna Capital, a small hedge fund run by Rengan.”

“During Raj Rajaratnam’s trial, prosecutors played for the jury several secretly recorded incriminating conversations between Raj and Rengan, who had by then joined his brother at the Galleon Group hedge fund. Prosecutors identified Rengan as an unindicted co-conspirator in the case.” Raj Rajaratnam, who was convicted nearly two years ago, is serving an 11-year sentence at a federal prison.

BURKLE’S FIRM IS SAID TO CUT FEES  |  It’s not often that a money management firm gives ground on fees. But after suffering steep losses in one fund, the Yucaipa Companies, the firm run by the billionaire Ronald W. Burkle, “has cut fees for investors in the portfolio,” Randall Smith reports in DealBook. “As part of the deal, Mr. Burkle agreed to forgo the firm’s annual management fee until the fund’s investors recoup their money, according to several people with knowledge of the matter. Such concessions reflect the broader pressure in the industry.”

Mr. Burkle, a former grocery chain owner, raised $450 million in 2008 in an effort to help underserved urban areas. But problems soon arose. Yucaipa invested $100 million in AFA Foods, a Pennsylvania-based ground beef processor, which ended up filing for Chapter 11 bankruptcy protection after the “pink slime” beef scare. Mr. Smith writes: “By the end of 2011, the fund showed losses of 40 percent, and was still down by 19 percent at the end of 2012, according to public pension reports and people familiar with the fund.”

ON THE AGENDA  |  Tiffany reports earnings before the market opens. Josh Lerner, a professor at Harvard Business School who does research on venture capital and private equity, is on Bloomberg TV at 7:15 a.m. Senator John McCain, Republican of Arizona, who grilled JPMorgan executives over the bank’s trading loss, is on Bloomberg TV at 8 p.m.

UPSTART BROKERAGE FIRM DRAWS SCRUTINY  |  LPL Financial has grown rapidly to become the nation’s fourth-largest brokerage firm, after Wells Fargo, Morgan Stanley and Merrill Lynch. But it also has a growing list of regulatory problems, The New York Times’s Nathaniel Popper writes. “The low-cost model that has aided LPL’s explosive growth has brought with it shortcomings that point to the difficulties regulators face in overseeing far-flung financial advisers.”

“As LPL has expanded, state and federal authorities have censured the company and its brokers with unusual frequency. LPL brokers have been penalized for selling complex investments to unsophisticated investors, for speculative trading in customer accounts, and, in a few cases, for outright stealing from clients.”

Mergers & Acquisitions »

BP to Buy Back Shares After TNK-BP Sale  |  BP plans to return about $8 billion to shareholders, Reuters reports.
REUTERS

JPMorgan Ranked Highest for M.&A. in First Quarter  |  JPMorgan Chase worked on all four of the biggest deals announced so far this year, Reuters writes.
REUTERS

Citigroup Banker Says It’s Too Early to Toast a Revival in M.&A.  |  In kicking off a conference at Tulane University, Mark Shafir, co-head of global mergers and acquisitions at Citigroup, says that while the factors for a recovery in deal-making are in place, there are enough potential problems that the market is lagging behind where it should be.
DealBook »

T-Mobile Deal for MetroPCS Receives Final Regulatory Approval  |  T-Mobile USA passed its last regulatory hurdle to its acquisition of MetroPCS, after the Committee on Foreign Investment in the United States gave its approval for the deal. Now, the cellphone carriers just need to convince investors.
DealBook »

Owner of Gucci Is Changing Its Name  |  PPR, the French company that owns brands like Gucci and Puma, will call itself Kering, a name that is “supposed to evoke the idea of caring and signal a new chapter in the company’s development,” Bloomberg News writes.
BLOOMBERG NEWS

Sweetening the Deal  |  M.&A. bankers and lawyers telling a public relations firm that specializes in deals that they expect to see more merger activity makes for sweet echo-chamber music, Jeffrey Goldfarb of Reuters Breakingviews writes.
DealBook »

INVESTMENT BANKING »

Credit Suisse Chief Executive Gets a Pay Raise  |  Brady Dougan of Credit Suisse made $8.22 million in 2012, an increase of more than one-third from the previous year, Reuters reports.
REUTERS

Behind the Derivatives Gibberish, Risks Run Amok  |  Since a Senate report on JPMorgan Chase’s multibillion-dollar trading loss became public last week, much attention has focused on what Jamie Dimon, the chief executive, knew and the extent to which the bank intentionally deceived regulators. “I was struck by the sheer incompetence and stupidity documented in the report,” Floyd Norris writes in The New York Times.
DealBook »

Citigroup Defends Controversial Pay Plan  |  Citigroup said in a proxy filing that a profit-sharing plan, which shareholders rejected last year, helped retain top executives, Bloomberg News reports.
BLOOMBERG NEWS

In Europe, Issuance of Junk Bonds Rises  |  The growth is driven by investors in search of yield.
WALL STREET JOURNAL

PRIVATE EQUITY »

Buyout Firms Join Forces for BMC Software  |  K.K.R. and TPG Capital have formed a consortium, while Bain Capital and Golden Gate Capital have separately teamed up, as it seems increasingly likely that BMC Software will be taken private in a deal that could be worth more than $6 billion, according to Reuters, which cites unidentified people familiar with the matter.
REUTERS

HEDGE FUNDS »

A Close Look at SAC’s Strategy  |  The Wall Street Journal describes the strategy of SAC Capital Advisors, the hedge fund that recently struck a big insider trading settlement with the Securities and Exchange Commission, as “large investments, built up quickly.”
WALL STREET JOURNAL

To Boaz Weinstein, Betting Against JPMorgan’s Trade Was ‘Easy’  |  Boaz Weinstein, the founder of Saba Capital, reflected on Thursday about the ramifications of JPMorgan Chase’s infamous “London Whale” trade that cost the bank billions of dollars.
DealBook »

Peltz Said to Build Stakes in PepsiCo and Mondelez  | 
TELEGRAPH

I.P.O./OFFERINGS »

Restaurant Operator Owned by Bain Said to Consider I.P.O.  |  Skylark, a Japanese restaurant company that Bain Capital acquired in 2011, “is considering an initial public offering in Tokyo as early as next year, two people with knowledge of the matter said,” Bloomberg News reports.
BLOOMBERG NEWS

VENTURE CAPITAL »

New Enterprise Associates Looks to China  |  The venture capital firm New Enterprise Associates plans to invest a portion of a new $2.6 billion fund in Chinese companies, especially in healthcare and information technology, The Wall Street Journal reports.
WALL STREET JOURNAL

Music Streaming Attracts Technology Giants  |  Companies like Google, Amazon and Apple are looking to expand in the online music business, Reuters reports.
REUTERS

LEGAL/REGULATORY »

Options Running Out for Cyprus  |  Reuters reports: “Cyprus’s finance minister left Moscow empty-handed on Friday after Russia turned down appeals for aid, leaving the island to strike a bailout deal with the European Union before Tuesday or face the collapse of its financial system.”
REUTERS

With Deadline for Bailout Set, Mood in Cyprus Darkens  | 
NEW YORK TIMES

Limited Impact Seen if Cyprus Were to Exit Euro  |  For Europe’s financial system, “the losses resulting from a Cypriot banking collapse and the country’s return to its former currency would be minimal compared with the havoc that Greece would have created had it not been bailed out,” The New York Times writes.
NEW YORK TIMES

Standard Chartered Chairman Retracts Comments on Sanctions Settlement With U.S.  |  John W. Peace, chairman of the British bank Standard Chartered, on Thursday retracted statements about the bank’s recent settlement with American authorities over violations of sanctions laws, saying his earlier comments were “wrong.”
DealBook »

In Europe, iPhone Sale Deals Draw Antitrust Scrutiny  |  The New York Times reports: “European Union regulators are examining the contracts Apple strikes with cellphone carriers that sell its iPhone for possible antitrust violations after several carriers complained that the deals throttled competition.”
NEW YORK TIMES

European Antitrust Chief Is Urged to Rein In Google  |  The New York Times reports: “With the European antitrust inquiry into Google’s search engine practices entering a third year, a group of 11 Web companies sent a joint letter to the top antitrust official in Europe on Thursday, asking him to compel Google to change its business practices to ensure that smaller rivals are not unfairly harmed.”
NEW YORK TIMES

After Report on JPMorgan Trade, a Call for Rule-Making  |  The Senate report and hearing last week on JPMorgan Chase’s disastrous trading losses “should steel the resolve of regulators who must complete rules under the Dodd-Frank reform law,” The New York Times editorial board writes.
NEW YORK TIMES

In London Whale Trade, JPMorgan’s ‘Silent Partner’  |  “Even when officials at the U.S. Office of the Comptroller of the Currency knew that JPMorgan had misled the public, they did nothing to make the company set the record straight. The regulators didn’t merely keep quiet while JPMorgan spread falsehoods. Their silence made them complicit,” Jonathan Weil writes in a column in Bloomberg View.
BLOOMBERG VIEW

Despite Cyprus Uncertainty, European Capital Markets Show Strength

LONDON - Despite the banking crisis in Cyprus, Europe’s capital markets are still open for business.

On Friday, the British insurance firm Esure raised £604 million, or $917 million, in one of the largest initial public offerings so far this year in Europe. The European banks, Santander and KBC, also pocketed a combined $1.5 billion through a 21 percent share sale in Bank Zachodni, a Polish subsidiary.

The successful offerings come despite growing uncertainty about how the stalemate in Cyprus will affect Europe’s sluggish recovery from its debt crisis.

The Continent’s policy makers are still trying to hammer out a deal that will force the small European country to contribute 5.8 billion euros, or $7.6 billion, toward a 10 billion euro bailout package for Cypriot banks.

Some analysts have warned that the resurgent euro zone crisis could knock investors’ appetite for new listings. Before Cyprus flared up, money raised from new European I.P.O.’s in the first quarter of the year was expected to jump by almost 70 percent compared with the same period in 2012, according to statistics from the accounting firm Ernst & Young.

“Conditions have improved significantly for the region,” said Maria Pinelli, the global strategic growth markets leader at Ernst & Young’s. “However, the euro zone’s political and economic difficulties are casting a shadow across the capital markets.”

The British insurer Esure shrugged off the dark clouds on Friday after the firm secured its listing close to the top of its expected price range. Trading in Esure, which provides home and car insurance across Britain, started on Friday, and gave the British company a market capitalization of around £1.2 billion.

It is the latest firm to tap London’s capital markets. On Wednesday, the British property company Countrywide raised £200 million from its I.P.O., while the insurance firm Direct Line, which is part owned by the nationalized Royal Bank of Scotland, raised £787 million from the capital markets in October.

In Poland, Santander of Spain and KBC of Belgium also raised a combined $1.5 billion from selling shares in their Polish unit Bank Zachodni, though the firms were forced to price the sale below Bank Zachodni’s closing price on Thursday.

Despite uncertainty caused by Europe’s financial difficulties, some global markets remain strong, as investors bet on growing demand from consumers in emerging economies. Singapore and Japan accounted for almost two-thirds of the money raised from new offerings in the first quarter of the year, remain strong

A consortium led by the European private equity firm CVC Capital Partners took advantage of this sentiment on Friday by raising $1.3 billion from a share sale in Indonesia’s largest department store operator, according to a person with direct knowledge of the matter, who spoke on the condition of anonymity because he was not authorized to speak publicly.

CVC and its partners â€" a unit of the Indonesian conglomerate Lippo Group and the Government of Singapore Investment Corporation - will retain majority control of the Indonesian retailer Matahari, and secured backing from several global investors, including BlackRock and the asset management units of Goldman Sachs.

Neil Gough contributed reporting from Hong Kong.