HOUSING

Tuesday, May 20, 2008

HOUSING

Senate Reaches Deal on Aid Plan

Senate negotiators said they have struck a bipartisan deal that could save as many as 500,000 troubled borrowers from foreclosure, and they expect a key committee to approve the plan today.

The announcement caps weeks of talks between Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) and the panel's senior Republican, Richard C. Shelby (Ala.) and raises hopes that Congress will approve a bill to address the housing crisis that President Bush will sign.

The White House has threatened to veto the House version. But the Senate compromise addresses one of the administration's primary concerns: It would cover the cost of the rescue plan -- estimated at $1.7 billion over five years -- by temporarily diverting as much as $900 million a year that had been designated for low-income rental housing.

INVESTING

$12.8 Billion Bid for Pa. Toll Road

Pennsylvania officials said a $12.8 billion bid from a Citigroup subsidiary and a Spanish company won an auction to lease the state's only toll road in what would be the biggest agreement of its kind in the United States.

The offer from Abertis Infraestructuras of Barcelona and Citi Infrastructure Investors beat the nearest competitor by $700 million, officials said.

Pennsylvania Gov. Edward G. Rendell (D) wants to lease the 537-mile turnpike for 75 years if the federal government rejects the state's application to put tolls on Interstate 80. Money from a turnpike lease would help the state close a $1.7 billion gap in transportation funding.

However, the state legislature must approve any deal, and one leader in the Democratic-controlled House said he was not impressed with the bid.

EXECUTIVES

Dell to Replace Finance Chief

Dell announced that Donald J. Carty, hired as chief financial officer a year and a half ago to help lead the computer maker's turnaround, will step down in June and be replaced by a longtime General Electric executive. Brian Gladden, chief executive of SABIC Innovative Plastics, formerly GE Plastics, will join Dell today and succeed Carty on June 13.

Dell spokesman David Frink said Carty, 61, was not pushed out and will remain on Dell's board. He said Carty indicated several months ago that he wanted to retire as chief financial officer.

AUTOMOTIVE

Chrysler Extends Gasoline Offer

Chrysler is extending for another month its offer to subsidize customers' gasoline expenses for three years. The deal caps gas at $2.99 per gallon, with Chrysler paying the rest. The offer was to expire on June 2, but it will continue through July 7.

Chrysler said the offer has resonated with consumers and raised traffic on the company's Web site by 25 percent since it began May 7. "Boy, have we gotten a great response," vice chairman and president James Press said on a conference call with reporters. He said 4 to 5 percent of customers are taking the gas subsidy over the other offers.

The offer from the maker of Chrysler, Dodge and Jeep vehicles includes most models. It is based on 12,000 miles of driving per year and the vehicle's government fuel-economy rating. People who buy or lease eligible vehicles can pick between the gas subsidy, cash rebates and zero-percent financing. On some vehicles, customers can get a rebate and the gas subsidy.

EARNINGS

Lowe's reported an 18 percent drop in first-quarter earnings as turmoil in the housing market continued. The retailer of home supplies had a profit of $607 million in the period ended May 2, down from $739 million in the corresponding period last year. Revenue declined 1 percent, to $12.01 billion.

Campbell Soup said it earned $532 million in the three months ended April 27, up from $217 million. The results include the $850 million sale of Godiva Chocolatier to Yildiz Holding. Excluding various one-time items, Campbell said its earnings were $165 million, down 7.8 percent from an adjusted $179 million a year ago. Revenue rose to $1.88 billion from $1.75 billion.

TREASURY BILLS

T-bill rates rose. The discount rate on three-month Treasury bills auctioned yesterday rose to 1.855 percent from 1.80 percent last week. Rates on six-month bills rose to 1.885 percent from 1.85 percent. The annualized return to investors is 1.890 percent for three-month bills, with a $10,000 bill selling for $9,953.11, and 1.930 percent for a six-month bill selling for $9,904.70. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 2.07 percent last week from 1.94 percent two weeks ago.

Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.