Farmer Mac Raises Capital, Names Acting CEO
Shares of Federal Agricultural Mortgage Corp. jumped after the District company appointed a new acting chief executive and raised $65 million to replenish capital and satisfy regulatory requirements. Farmer Mac, as the government-sponsored enterprise is known, also named Michael A. Gerber acting president and chief executive, replacing Henry D. Edelman. Shares closed up 66 percent, at $6.79.
CarMax to Lay Off 600 Workers
CarMax said it was laying off 600 employees, or about 4 percent of its workforce, as it tries to cut costs as car and truck sales decline. The Richmond company said the reductions are in its service departments at a majority of its production superstores, where it reconditions vehicles. The production superstores make up 60 of the company's 99 retail locations.
Employees were notified yesterday and were offered severance packages, said CarMax spokeswoman Trina Lee. The company, which has about 15,250 employees, said it expected about $7 million in severance costs to be included in its results for the third quarter, which ends Nov. 30.
Gannett Taps Credit Line
McLean-based Gannett, the largest U.S. newspaper publisher, said it drew on a revolving credit line to ensure it has funds to repay its commercial paper. Companies sell commercial paper, which matures in nine months or less, to help pay for day-to-day expenses, including payroll and rent. The action was taken in response to credit-market disruption, Gannett said. The publisher of USA Today said it has significant credit available under a $3.9 billion revolving credit line, in excess of its $2 billion in commercial paper outstanding.
Standard & Poor's said it may lower Gannett's BBB+ corporate credit rating, the eighth-highest investment grade, and its A-2 commercial paper rating. The ratings company cited the worsening decline in newspaper advertising.
Allied Capital Completes Sale of Equity Interest
Allied Capital, a buyout and lending firm based in the District, said it completed the sale of its equity interest in Norwesco to private-equity firm Olympus Partners. The sale resulted in a gain of about $86 million, Allied said. Allied also was repaid about $65 million of subordinated debt outstanding to Norwesco, a maker of agricultural and industrial storage tanks, the company said. Those amounts are subject to post-closing adjustments, the company said.
HealthExtras Changes Name to Catalyst Health
Pharmacy benefits manager HealthExtras changed its name to Catalyst Health Solutions, adopting the name of its largest subsidiary.
The Rockville company said it gets almost all its revenue from the Catalyst Rx PBM, which covers more than 5 million members in the United States and Puerto Rico. The company's stocker ticker changed to CHSI from HLEX.
Catalyst shares slipped 70 cents, or 2.7 percent, to close at $25.36.
Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.