Collateral

Not wanting to see the Senator Theatre closed on their watch, city officials are offering $320,000 to keep it open - provided the 70-year-old movie house is turned into a nonprofit business. "The Senator Theatre is a Baltimore icon," Deputy Baltimore Mayor Andrew Frank said yesterday. "It's ingrained in the psychology of Baltimore. ... Its closing would be felt in ways that would be manifest throughout the community." Frank outlined the plan Monday in a letter to Senator owner Tom Kiefaber, who has warned in recent weeks that the landmark theater, deeply in debt, could close without financial help.

Constellation Energy Group announced late yesterday that it sold a big piece of its commodities trading operations, once the biggest source of its growth but more recently the source of financial troubles that forced it to find a merger partner. Macquarie Group of Australia agreed yesterday to buy Constellation's natural gas unit, based in Houston, for an undisclosed price, and supply gas to Constellation NewEnergy Gas, the company's retail division. Yesterday's transaction is the Baltimore company's latest move to reduce risk and the large collateral requirements needed to run trading operations.

PHOENIX -- Commissioner Paul Tagliabue said last night that progress has been made in talks with Howard Milstein on his proposal to buy the Washington Redskins, but there is still no deal to present to the owners.After the powerful finance committee delayed making a recommendation, Tagliabue said: "We really have made some substantial progress in the last 72 hours. We'll see if we can get something nailed down that we can present to the membership [at the annual owners' meeting this week]

Airman Gayla Zigo took aim at Lt. Kelly Flinn, and Gen. Joseph Ralston crashed. In military parlance, that's called collateral damage.The Irish will accept adultery but not divorce by their political leaders. Americans are the other way round.If he can't get a tax increase, the mayor may feel compelled to close down the City Council.They let anyone into the Congressional Country Club these days.Pub Date: 6/11/97

WASHINGTON -- Homebuyers who either don't have enough cash for a down payment in 1996 -- or who don't care to shell out down-payment money even though they have it -- should check out the latest twist on an old idea.It's called the pledged-asset mortgage, and it's potentially useful for anyone from young, first-time buyers looking for a starter house to graying high-rollers trading up to a new mansion.Here's how the concept works. Rather than requiring a traditional down payment -- hard cash on the table -- the lender agrees to accept some other asset as collateral.

If Parks Sausage Co. is sold to Franco Harris, back property taxes and lawyers' fees will consume more than one-fourth of the $1.7 million purchase price, lawyers said yesterday at a meeting of creditors.That would leave a maximum of about $1.2 million to pay roughly 500 creditors whose $2.4 million in debt is not secured by collateral. Those unsecured creditors include Parks Chairman Raymond V. Haysbert Sr., who will try to get back part of a $200,000 loan he made to the company.Mark Friedman, a lawyer for the company, estimated that the unsecured creditors would receive between 25 cents and 50 cents on the dollar.

When you borrow money using stocks or bonds as collateral, what are the pay-back rules?The answer depends on who is lending you the money:If you use your stocks or bonds as collateral for a bank loan, the bank will define the interest and repayment terms.Some corporations have set up profit-sharing programs that allow employees to borrow against their stocks. Here again, the employer or plan sponsor sets the terms for repayment.If you use a margin account at a brokerage firm, the terms are the most flexible.

O. D. McKee, 90, founder of the bakery that produces the famous "Little Debbie" snacks, died Friday in Chattanooga, Tenn. He used his car as collateral to buy a bakery there in 1935. He sold it in 1951, but later decided to market snack cakes in a family pack.

A review in Wednesday's Today section of the BAUhouse exhibit "Collateral Damage: The Unseen Cost of Gun Violence" incorrectly attributed the quote, "All guns and armies must be dismantled." The quote should have been attributed to the work of Diego Marcial Rios.The Sun regrets the errors.

Some bankers happy about election resultsBankers can take heart from President-elect Bill Clinton's remarks last week -- when he was merely candidate Bill Clinton. Vowing to end the so-called credit crunch, he told voters in Michigan, "The government's regulatory policy is responsible for a real slowdown in economic activity."So are Maryland bankers heartened by the results of Tuesday's election? Well, yes and no."I think it's a good thing on balance," said Arthur Silber, president of Sterling Bank & Trust Co. of Baltimore.

Constellation Energy reported a $123.5 million loss for the first three months of 2009 Tuesday, as it continued to pay the costs of last year's brush with bankruptcy and the near-collapse of its commodities trading business. Excluding those one-time costs, Constellation's operations were profitable, and company officials said they were optimistic their recovery is on track. "We're pleased with our company's earnings for 2009 thus far," said Chief Executive Officer Mayo A. Shattuck III, in a conference call for analysts and investors Tuesday morning.

Constellation Energy Group announced late yesterday that it sold a big piece of its commodities trading operations, once the biggest source of its growth but more recently the source of financial troubles that forced it to find a merger partner. Macquarie Group of Australia agreed yesterday to buy Constellation's natural gas unit, based in Houston, for an undisclosed price, and supply gas to Constellation NewEnergy Gas, the company's retail division. Yesterday's transaction is the Baltimore company's latest move to reduce risk and the large collateral requirements needed to run trading operations.

Not wanting to see the Senator Theatre closed on their watch, city officials are offering $320,000 to keep it open - provided the 70-year-old movie house is turned into a nonprofit business. "The Senator Theatre is a Baltimore icon," Deputy Baltimore Mayor Andrew Frank said yesterday. "It's ingrained in the psychology of Baltimore. ... Its closing would be felt in ways that would be manifest throughout the community." Frank outlined the plan Monday in a letter to Senator owner Tom Kiefaber, who has warned in recent weeks that the landmark theater, deeply in debt, could close without financial help.

The notion that Americans should measure the success of military strikes by the size of their collateral damage triggers the plot of Eagle Eye, a suspense film whose action ranges from the Middle East to Andrews Air Force Base and Aberdeen. No argument here, but if studios measured the success of potential blockbusters like Eagle Eye that way, few of them would ever reach the theaters. Eagle Eye has half an idea in its head, but over two hours there's no time to complete or explore it, since the movie isn't just a chase but a combination steeplechase and destruction derby.

Every one of Constellation Energy Group's 1.1 million electric utility customers can relate to the crisis that forced the company into a shotgun takeover yesterday. Essentially, Wall Street threatened to shut off the power. More precisely, the national rating agencies threatened to cut off the company's credit. And without credit, Constellation was on the brink of losing what it needs to keep nearly all of its multibillion-dollar operation turned on and energized. It was a dilemma common to Lehman Brothers Holdings Inc., AIG Inc. and other financial implosions of recent days.

A few sentences on page 46 of a financial disclosure that did not change reported profits, sales or net worth caused Constellation Energy Group's prospects to go into brownout this week. Its shares dropped 16 percent Tuesday. Analysts rushed to downgrade the stock, although one contrarian changed his recommendation from "underperform" to "hold" because the shares had fallen so far. Standard & Poor's downgraded Constellation bonds to two steps above "junk" status. A little jumpy, aren't we?

A major Wall Street firm cut Constellation Energy Group's credit rating yesterday after the Baltimore-based company recently revised its estimate of how much collateral it would need to address such a downgrade. Corporate credit rating agency Standard & Poor's cut Constellation's rating from BBB+ to BBB and gave it a "stable" outlook for maintaining the rating. It previously had a negative outlook for the higher rating. The rating downgrade triggers about $106 million in collateral requirements from certain company contracts.

Shares of Constellation Energy Group fell 16 percent yesterday - the largest one-day drop in seven years - after one analyst questioned the company's accounting and another raised concerns about the effects of a potential credit downgrade. The stock closed down $11.79 to $61.25 on the New York Stock Exchange. It was the biggest percentage decrease for the Baltimore company since July 20, 2001, when shares fell 21 percent after Constellation lowered its earnings forecast for that year.

LONDON -- Shares of Carlyle Capital plunged yesterday, losing most of their value, after the company said it expected its lenders to promptly take over all its assets after discussions with banks to refinance the fund failed. Carlyle Capital, an affiliate of the Carlyle Group, the Washington, D.C., private equity fund, said it "has not been able to reach a mutually beneficial agreement to stabilize its financing." Carlyle Capital's shares fell more than 70 percent yesterday on the Euronext exchange in Amsterdam, the Netherlands.

LONDON -- The Carlyle Group's troubled mortgage-debt investment fund, Carlyle Capital, said yesterday that it had asked lenders to halt further liquidation of collateral worth as much as $16 billion while the two sides discuss ways to repay the debt. The fund, which invests mainly in triple-A rated mortgage securities issued by Fannie Mae and Freddie Mac, has received $400 million in margin calls, and some lenders started to liquidate collateral for $5 billion in debt. Banks are asking for their money back amid concerns the economic climate may deteriorate further.