AIG

American International Group Inc., the insurer majority-owned by the US government, may sell bonds for the first time since it was rescued almost two years ago to help repay a USD 182.3 billion bailout. AIG may also issue stock, it said in a 9 August filing to the Securities and Exchange Commission.

Banks

The Basel Committee on Banking Supervision is proposing that bond investors should help bear the cost of future bank bailouts as it seeks to reduce moral hazard and the burden on taxpayers. All regulatory capital instruments sold by banks should be capable of absorbing losses in the event that a bank is unable to fund itself in the private markets, said the committee, which sets international banking rules, in a consultation document.

The committee is seeking to redress the situation during the financial crisis, when holders of Tier 2 capital instruments, such as subordinated debt, benefited alongside depositors from government assistance and avoided losses.

Finland

Finland plans to raise about €4 or €5 billion from a bond sale planned for September or October, Anu Sammallahti, Deputy Funding Director at the Finnish Treasury in Helsinki said in a telephone interview. Finland will also hold one or two auctions of existing bonds during the second half of the year, Ms Sammallahti said. Finland has covered about half of the long-term funding need for 2010, she said.

Greece

The European Commission said on Thursday that Greece met qualifying conditions for the next €9 billion tranche of eurozone financial aid it is due to receive in September. “The Commission considers that the broadly positive evaluation of the conditions imposed on Greece opens the way for the next phase of lending,” the EU executive said in a statement.

It expects eurozone member states to approve the next tranche and proceed with the transfer of funds. Of the €9 billion, €6.5 billion will come from eurozone countries and €2.5 billion from the International Monetary Fund (IMF).

Portugal

The yield premium investors demand to hold Portuguese 10-year bonds instead of equivalent-maturity benchmark German bunds rose. The extra yield, or spread, widened five basis points to 283 basis points.

Portugal plans to sell between €750 million and €1.25 billion of bonds due in 2016 and 2020 on 25 August.

Serbia

Yields on Serbia’s six-month Treasury bills hit 12 per cent at an auction as the government struggled to borrow in the local market and investors remained concerned over the dinar and risk premiums.

The government raised 2.6 billion dinars of debt maturing in February 2011, compared with 4 billion dinars (USD 49.13 million) on offer. Average yield was 12 per cent, up from 11.7 per cent at a sale of similar securities on 5August.

Data compiled by MPM Capital Investments Ltd of 81, B. Bontadini Street, Birkirkara. MPM Capital Investments Ltd is licensed to conduct Investment Services Business by the Malta Financial Services Authority. You may contact MPM on [email protected] or 21493250. www.mpmci.net