» Subscribe Today!
More of what you want to know.
The Daily News
X

Forgot your password?
Skip Navigation LinksHome >
VOL. 123 | NO. 18 | Monday, January 28, 2008

Daily Digest

Print | Front Page | Email this story | Comments ()

Keith and David Grant Homes Finances Lots in Two Devs.

     Memphis homebuilder Keith and David Grant Homes LLC has taken out a $3.2 million construction loan and a $3.2 million revolving line of credit, both through SunTrust Bank, secured by property in Bartlett and Lakeland subdivisions. The new loans are refinances and construction continues in both developments, Keith Grant said late last week.
     The construction loan is secured by 70 lots spread among phases 1 through 3 of Sterling Place Planned Unit Development in Lakeland and seven lots in Elpine Gray Estate at Buckhead Planned Development in Bartlett.
     The revolving line is secured by four lots in Sterling Place and three in Elpine Gray Estate. A revolving line of credit allows borrowers to take out and pay back multiple loans up to a certain dollar limit.
     Sterling Place is a 55-plus community on the north side of U.S. 64 between Canada Road and Chambers Chapel Road. Grant said the company has been working on the development for two years and has sold 73 homes there.
     Elpine Gray Estate at Buckhead is a new community on the east side of Shadowlawn Road south of Old Brownsville Road. Keith and David Grant Homes has sold 10 to 12 homes there in the last six months, Grant said.
     

Tennessee Unemployment Rate On the Rise

     Tennessee's unemployment rate increased to 5.3 percent for December, up from the November rate of 4.9 percent.
     The unemployment rate for the U.S. went up to 5 percent for December from 4.7 percent in November.
     In Memphis, the rate went up to 5.5 percent from 5.2 percent in November. Pickett County has the state's highest rate at 9.9 percent, followed by Marshall County at 9.1 percent.
     

Restaurants Must Pay $4.8M To Workers' Comp Fund

     A judge has ordered a group of restaurant owners to pay $4.8 million into a workers' compensation fund that was mismanaged.
     About 500 Tennessee Restaurant Association members will have to pay thousands each to shore up the fund.
     They had hoped to pay much less.
     "We are disappointed," said Nathan Ridley, an attorney for several restaurant owners.
     The state liquidated the group's workers' compensation fund two years ago and asked restaurant owners to come up with the shortfall to pay injured workers.
     In a related case, the Tennessee Department of Commerce and Insurance is suing the restaurant association's chief executive officer.
     Among other things, the suit claims Ronnie Hart received excessive fees for running the workers' compensation fund.
     

Moody's Downgrades First Horizon

     Credit rating agency Moody's Investors Service last week cut its long-term senior unsecured rating for regional bank First Horizon National Corp. to "Baa1" from "A3."
     Moody's cut the rating, which is still considered investment grade, because it expects First Horizon to face "sizable credit costs in its large residential construction and home equity portfolios."
     Expected charges tied to rising delinquencies and defaults in the portfolio are larger than what Moody's previously anticipated and are likely to hamper earnings throughout 2008, the rating agency said in a statement.
     Moody's also cut the bank financial strength rating on First Horizon's leading banking subsidiary, First Tennessee Bank, to "C'' from "C+."
     First Horizon's outlook remains negative, Moody's said.
     

U.S. Debt In 'Severe' Distress

     The volume of U.S. corporate debt issued by companies in severe financial distress rose in January to the highest level in more than four years, suggesting corporate defaults are likely to surge in coming months, Standard & Poor's said Thursday.
     The credit-rating agency said the ratio of "distressed" corporate debt to all speculative-grade debt jumped to 11.1 percent in January from 6.1 percent in December. The percentage this month is the highest since September 2003.
     The surge occurred despite aggressive moves by the Federal Reserve to ease the credit crunch, which former Federal Reserve Chairman Alan Greenspan has described as the worst in a decade.
     A company's debt is considered distressed when its yield is greater than 10 percentage points above the 10-year Treasury note, or about 13.6 percent as of Thursday. The distressed ratio measures the number of distressed securities against the total number of speculative, or junk, securities.
     S&P said the rising distress ratio, which has been climbing since bottoming out last spring, signals an increased need among companies for capital and could be a precursor to more defaults.
     Defaults remained at an all-time low at the end of December, thanks in part to companies' limited funding needs. But S&P is projecting default rates to tick up to 3.4 percent within the next year.
     Companies are seeing more of their debt tumble into distressed ranks because the credit crunch has buyers of the debt demanding higher yields. Diane Vazza, an S&P managing director, said the threat of a recession and market volatility are also factors driving the increase.
     As of Jan. 15, distressed debt totaled $64.5 billion, almost $30 billion more than in December. S&P said 13 of the 25 industries it monitors had double-digit distress ratios. The industries with ratios 20 percent or higher were brokerage, retail/restaurants, consumer products and homebuilders.
     

Corker Appointed To Banking Panel

     U.S. Sen. Bob Corker, R-Tenn., has a new committee assignment that's especially relevant in light of the volatility and upheaval taking place in the housing market, as well as the broader economy.
     Corker has been appointed to the Senate's Committee on Banking, Housing and Urban Affairs. The Banking Committee's purview is the country's financial institutions, housing and mass transit programs.
     The committee assignment came with the appointment of Sen. Roger Wicker, R-Miss., to fill the seat left by Sen. Trent Lott, R-Miss., who retired in December. Wicker is taking Corker's place on the Senate Armed Services Committee. Corker will continue serving on the Foreign Relations, Energy and Natural Resources, and Small Business and Entrepreneurship committees as well as the Special Committee on Aging.
     

Phony Invoice Scam Targets Area Businesses

     The Better Business Bureau of the Mid-South is warning about a phony invoice scam where a Jackson, Tenn., company sends businesses invoices for services that were not performed.
     G.B. Hurst, which says it's in Jackson, is running the phony scam.
     Businesses from several states have complained to the BBB that they have received work orders and invoices for "emergency equipment" maintenance work. The work was supposedly requested and approved by an employee in the maintenance department of the targeted company. The invoices list the name of the employee who requested the service. Some of the employees named on the invoices do not work in the maintenance department or are no longer employed at that company. In at least one instance, the employee's signature is illegible.
     In all cases, the invoice amount has been $2,649.The job number referenced on all of the invoices is IBMRR-4744. The companies billed claimed they had requested no such services and allege that the invoices are bogus and fraudulent.
     

Rates on 30-Year Mortgages Drop for Fourth Straight Week

     Rates on 30-year mortgages dropped for a fourth straight week to the lowest level in nearly four years, raising hopes that low rates will help spur a rebound in the hard-hit housing industry.
     Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 5.48 percent for the week, down from 5.69 percent the previous week.
     It was the fourth consecutive decline and the third straight week that rates have been below the 6 percent level. The new rate marked the lowest point for 30-year mortgages since they averaged 5.40 percent the week of March 25, 2004.
     Economists attributed the decline to further weak news on the economy combined with the biggest reduction of a key interest rate by the Federal Reserve in more than 20 years, a move that has raised hopes the Fed will be making more rate cuts as it steps up its efforts to combat a threatened economic recession.
     Other types of mortgages also showed declines last week.
     Rates on 15-year mortgages, a popular choice for refinancing, dropped to 4.95 percent this week, down from 5.21 percent last week.
     Rates on five-year adjustable-rate mortgages declined to 5.13 percent, compared to 5.40 percent the previous week while rates on one-year ARMs fell to 4.99 percent, down from 5.26 percent the previous week.
     

Sign-Up For Our Free Email Edition
Get the news first with our daily email


 
Blog News, Training & Events
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 83 188 9,757
MORTGAGES 100 182 11,496
FORECLOSURE NOTICES 11 28 1,662
BUILDING PERMITS 194 328 20,638
BANKRUPTCIES 61 119 6,556
BUSINESS LICENSES 25 52 3,497
UTILITY CONNECTIONS 31 79 4,062
MARRIAGE LICENSES 31 63 2,242

Weekly Edition

Issues | About

The Memphis News: Business, politics, and the public interest.