Business Archives

Credit Counseling Now Available for WikiLoan Users

WikiLoan, Inc. (OTCBB: WKLI), a peer-to-peer lending platform, announced today that the Company has signed a deal with Progrexion Marketing, the exclusive marketing firm for Lexington Law, to provide credit counseling for WikiLoan users with poor credit history.

The deal allows the company to offer a value added service to the users who are not credit worthy, while receiving generous affiliate commissions.

“More than 85% of users applying for peer-to-peer loans are not credit worthy.  Instead of flatly rejecting the majority of our users, we believe that getting them back on the road to financial independence is an important way to build credibility and loyalty for our brand.  In addition, Lexington Law has a new program that notifies us when our users meet the baseline credit score for our program that should allow us to convert our users to paying customers,” said Marco Garibaldi, WikiLoan, Inc. CEO.

About WikiLoan

WikiLoan is a Social Network with a focus on finance.  At WikiLoan.com, family and friends can borrow and lend money among themselves at rates suitable to their respective needs.  The company’s website provides repayment schedules and documentation for loans, along with proprietary administrative tools, which enable users to securely pull credit reports and automate the loan repayment process.

About Progrexion Marketing

Progrexion Marketing is the exclusive marketer of Lexington Law.  Progrexion provides a credit counseling affiliate program through Lexington Law that has a history of quality services and a long commitment to credit correction research and development, with 20 years of experience assisting over 1/2 million clients in their credit counseling and repair efforts.

This release contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which represent the company’s expectations or beliefs concerning future events of the company’s financial performance.  These forward-looking statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements.  These factors include the effect of competitive pricing, market acceptance of the company’s products and the effects of government regulation.  Results actually achieved may differ materially from expected results included in these statements.

Investors may contact:
Ben Hansel
(720) 288-8495
benh@ttfsco.com

Web Site: http://www.wikiloan.com

Debit Card Use Rising: New Survey

Debit Card Use Rising: New Survey

Throughout the national economic crisis, many consumers have chosen to use debit instead of credit when paying for goods and services, as reported in Credit-Land.com 2009 research. Personal finance expert Carmen Wong Ulrich, author of “The Real Cost of Living,” said recently on “The Early Show” that these introductory rates are being offered strategically, in an attempt to coax Americans back into using their credit cards more frequently. “Then the rates jump, [to] anywhere from 14 to 20 percent, so it becomes incredibly costly,” cautions Wong Ulrich. “You have to know how to use these cards.”

“Our credit card usage has gone way down [since the economic downturn]. And our revolving balances have gone way down,” explained Wong Ulrich. Credit card companies would like to see this trend reverse, and are doing what they can to boost the appeal of credit cards. By transferring balances from high interest credit cards to low interest credit cards, consumers can save themselves a lot of money in interest charges, but only if they pay off the entirety of their outstanding balance before the teaser rate expires.

Roman Shteyn, a financial guru and CEO at Credit-Land.com, advises people to outline a payment plan that will enable them to settle their transferred balance within the time frame of the teaser rate and adjust their budgets accordingly.

“Some credit card companies are offering 0% interest on transferred balances for up to 21 months with no annual fee. That gives you nearly two years to pay off your balance and get out of debt. It’s an amazing opportunity to save money,” says Shteyn.

The consumer trend research team at Credit-Land.com determined the top four balance transfer credit cards favored by consumers.

They are: the Citibank Citi® Platinum Select® MasterCard®, offering a 0% APR on balance transfers for 21 months; Discover® Card’s Discover® More Card, which has an 18-month promotional 0% APR on balance transfers; the Platinum Prestige Credit Card by Capital One®, which has 0% APR on transferred balances until December 2012; and Chase’s Chase Freedom® Visa, which offers 0% APR on balance transfers for 12 months plus a $100 cash-back bonus.

If utilized correctly, a balance transfer credit card may seem an excellent tool for a financially struggling individual to pay down some of her personal debt. Denial of an application may become an inquiry mark on your credit history, which you may prevent by knowing your realistic credit potentials.

Contact Details:

Roman Shteyn
Credit-Land.com Inc.
2751 S Ocean Drive
Suite 1202 South
Hollywood, FL 33019
Phone: 1-888-281-1556
Email: press@credit-land.com
Website: http://www.credit-land.com/

Web Site: http://www.credit-land.com

College Students Facing Enormous Financial Challenges

College Students Facing Enormous Financial Challenges-Image by York College of PA via Flickr

 NSLP, a private not-for-profit serving post-secondary institutions, today released an action plan for developing a campus financial education program. The report, titled Financial Capability Now: Why College Students Can’t Wait, provides a framework for student financial success.

The report recommends:

Create a multidisciplinary success team that includes the stakeholders on your campus and engages them to improve the financial capability of students.

  • Identify the financial topics relevant to students. Each campus and student population has a different need, and those needs may change as students progress through their education.
  • Identify the best and most accessible strategy for your campus, and select a delivery method that works for your school.
  • Once you begin your program, promote it to your students in order to get them to participate throughout their college career.
  • Assess the impact of your financial education program. Gather data related to programs and services to highlight the impact on financial capability and to support the need for continued resources moving forward.

The data released today supports the mounting body of evidence that proves financial education is critical for students in higher education. A study by Hartford Financial Services Group shows that only 24 percent of students feel well prepared to deal with the financial challenges that await them after graduation. Financial education improves a student’s financial knowledge, cultivates their money management skills, and increases confidence around financial decision-making.

“In study after study we’re seeing the same thing—students want to increase their financial capability,” says Kate Trombitas, NSLP vice president of financial education. “It is time for campuses to work creatively and collaboratively to respond to this need. This report makes it clear that students can’t wait for this critical piece of education; colleges need to respond.”

In addition, many students rely on credit cards to pay for textbooks and tuition when financial assistance fails to cover their expenses. Therefore, along with mounting student loan debt, young adults also face growing credit card debt. Overwhelming debt creates stress that many students are unable to manage. Financial education not only helps relieve stress related to excessive debt, but it also can be proactive in providing students with the resources they need to make informed choices before they borrow.

While some schools have implemented financial education programs on their campuses, the report explains why schools need to go beyond simply offering a program to their students.

“Schools must assess the impact of their programs to ensure they are meeting the unique needs of their student population,” Trombitas says. “When it comes to financial education programs, one size does not fit all situations. More than collecting information about how many students they serve in their programs, schools need to collect qualitative data about what students say about their financial issues. Schools must accurately gauge the effectiveness of their programs.”

This report encourages schools to act now to ensure a better financial future for students, schools and our communities. Download the report here.

ABOUT NSLP

Headquartered in Lincoln, Nebraska, NSLP is a private, not-for-profit company with a 25-year legacy in the higher education marketplace. A former Top-10 student loan guarantor, NSLP continues to be a passionate leader and advocate for student success; providing colleges and universities nationwide with financial education, delinquency prevention, default aversion, financial aid related support, and Title IV training and compliance programs. NSLP collaborates with schools to develop programs that will ultimately help our future generations thrive financially.

CONTACT: CONTACT: Susan Helmink, +1-402-479-6802, SusanH@NSLP.org

Web Site: http://www.nslp.org

Allstate (NYSE: ALL) Board OK’s Stock Repurchase

The Allstate Corporation (NYSE: ALL) today announced that its board of directors has approved plans to issue preferred stock and senior unsecured debt to fund a new $1.0 billion share repurchase program and repay maturing debt. The board also approved a quarterly dividend of 21 cents per share.

“We believe this is an opportune time to repurchase common stock given Allstate’s current valuation,” said Thomas J. Wilson, Allstate’s chairman, president and chief executive officer. “As a result, we plan to adjust our capital structure to capture this opportunity while maintaining our strong capital position. Our $1.0 billion share repurchase program and upcoming 2012 debt maturity will be funded by issuing a combination of preferred stock and senior unsecured notes totaling $1.25 billion, market conditions permitting.” The share repurchase program will be made through open market purchases and may include an accelerated repurchase program. The program is expected to be completed by March 31, 2013.

The board also approved a quarterly dividend of 21 cents on each outstanding share of the corporation’s common stock, payable in cash on January 3, 2012 to stockholders of record at the close of business on November 30, 2011.

This press release contains “forward-looking statements” that anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. We believe that these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those communicated in these forward-looking statements. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. We assume no obligation to update any forward-looking statements as a result of new information or future events or developments.

Allstate has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents Allstate has filed with the SEC for more complete information about Allstate and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, Allstate will arrange to send you the prospectus if you request it by calling tollfree 1-800-416-8803.

The Allstate Corporation (NYSE: ALL) is the nation’s largest publicly held personal lines insurer known for its “You’re In Good Hands With Allstate®” slogan. Now celebrating its 80th anniversary as an insurer, Allstate is reinventing protection and retirement to help nearly 16 million households insure what they have today and better prepare for tomorrow. Consumers access Allstate insurance products (auto, home, life and retirement) and services through Allstate agencies, independent agencies, and Allstate exclusive financial representatives in the U.S. and Canada, as well as via www.allstate.com and 1-800 Allstate®.

CONTACT: Maryellen Thielen, Media Relations, +1-847-402-5600, or Robert Block or Christine Ieuter, Investor Relations, +1-847-402-2800

Web Site: http://www.allstate.com

Student Loan Payments Go to Bottom of the Pile

With student loan repayment receiving much attention, the crux of the issue is joblessness. The long duration of a poor U.S. economy with near zero job growth is continuing to take a deepening toll on young adults. Faced with the highest joblessness since the end of World War II, young Americans are forced to deal with an increasingly limited number of opportunities for jobs and are delaying major financial and life decisions based on the economy – 27% say they will delay paying off student loans or other debt due to economic factors.

“The heart of the matter here is that young Americans need jobs in order to repay any debts, including student loans, and to plan for the future,” said Paul T. Conway, President of Generation Opportunity and a former Chief of Staff at the US Department of Labor. “The poor economy and a lack of jobs are the central reasons why millions of young Americans have delayed their dreams of buying a home, getting more education, saving for retirement, getting married, or starting a family. Millennials know that more rhetoric from elected leaders and new federal programs are no substitute for employment opportunities and simply having a job. Elected officials in both parties should put as much energy into allowing the private sector to create jobs for the next generation as they do preparing for the next election.”

Generation Opportunity commissioned a poll with the polling company, inc./WomanTrend (April 16 – 22, 2011, +/- 4% margin of error) and a highlighted result for all young Americans ages 18-29 appears below:

  •  77% of young people ages 18-29 either have or will delay a major life change or purchase due to economic factors:
    • 44% delay buying a home;
    • 28% delay saving for retirement;
    • 27% delay paying off student loans or other debt;
    • 27% delay going back to school/getting more education or training;
    • 26% delay changing jobs/cities;
    • 23% delay starting a family;
    • 18% delay getting married.

ABOUT GENERATION OPPORTUNITY

Generation Opportunity is a non-profit, non-partisan 501 (c)(4) organization that seeks to engage everyone from young adults, to early career professionals, college students, young mothers and fathers, construction workers, current service men and women, veterans, entrepreneurs, and all Americans who find themselves dissatisfied with the status quo and willing to create a better tomorrow.

Generation Opportunity operates on a strategy that combines advanced social media tactics with proven field tactics to reach Americans 18-29. The organization’s social media platforms – “Being American” on Facebook and “The Constitution” on Facebook – have amassed a total fan base of more than 1.8 million. Both pages post links to relevant articles and reports from sources ranging from the federal General Accountability Office (GAO), to The New York Times, The Washington Post, The Brookings Institution, The Wall Street Journal, The Huffington Post, and The Heritage Foundation.

Read about Generation Opportunity here; visit “Being American” on Facebook here and “The Constitution” on Facebook here.

For our Spanish-language page – Generacion Oportunidad – click here.

Matthew Faraci
202-997-1636

http://generationopportunity.org/

Business Shifting Strategy to Cash Management

Business Shifting Strategy to Cash Management

Business Shifting Strategy to Cash Management-Image by BlatantWorld.com via Flickr

Companies today are placing a greater value on the historic role of their treasury department in managing cash and liquidity as a direct consequence of  the current economic and credit environment, according a survey by the Association for Financial Professionals (AFP) released today at the AFP Annual Conference.  At the same time, treasury responsibilities continue to expand to include critical finance activities ranging from accounting and SEC compliance to financial planning and analysis to serving as a valued internal financial consultant to the company.

The AFP Strategic Role of Treasury Survey , underwritten by SunTrust, found that the role of corporate treasury, the subset of finance that assures that a company has enough cash on hand to meet its needs, in the last five years has become more strategic than operational. Not surprisingly, companies are also keeping a close eye on how they measure financial performance.

“At many companies, treasurers and their staff are interacting directly with senior management, including the board. Their expertise in forecasting and budgeting is even required at the business unit level as companies seek to calculate ROI on a project basis,” said Jim Kaitz, AFP’s president and CEO.  “Time is also critical.  Companies need to know how they are performing according to plan, so we are seeing an increased focus on financial metrics.”

“SunTrust is pleased to sponsor the 2011 Strategic Role of Treasury Survey,” said Eric Brewer, Executive Vice President of Treasury & Payment Solutions at SunTrust Banks, Inc. “This timely report captures the perspectives of senior-level financial professionals and offers analysis which highlight emerging trends and subtle shifts in the treasury function.”

Key survey findings:

Eighty-one percent of senior-level financial professionals report that treasury is playing a greater strategic role in their organizations than it did five years earlier.

Treasury’s greater strategic role is the result of:

  • Increased importance of cash management and liquidity given economic and credit market volatility (78 percent)
  • Senior management and boards seeking increased visibility into liquidity and risk exposures (70 percent)
  • Closer monitoring of financial metrics on projects and other activities (44 percent)

Treasury takes a leadership role in key finance functions, including bank relationship management, global treasury management, borrowing, investing and cash flow forecasting.

Treasury also plays critical roles in financial risk management, working capital management, financial planning & analysis, risk management, mergers & acquisitions, counterparty risk analysis, business continuity planning, enterprise risk management and capital structure.

  • In 87 percent of organizations, the treasury group acts as an internal financial consultant to other departments.
  • This expanded strategic scope has occurred even while many treasury departments committed a greater percentage of resources to traditional cash management responsibilities.  The dual expansion was able to occur due to automation, professional development leading to expanded employee skill sets, and by recruiting employees with broadened skill sets.

View the full report on www.afponline.org/research

About AFP®

The Association for Financial Professionals (AFP), headquartered outside Washington, D.C., serves a network of more than 16,000, members with news, economic research and data, treasury certification programs, networking events, financial analytical tools, training, and public policy representation to legislators and regulators. AFP is the daily resource for the finance profession.

AFP’s global reach extends to over 150,000 treasury and financial professionals worldwide, including AFP of Canada; London-based gtnews, an on-line resource for the treasury and finance community; and bobsguide, a financial IT solutions network.

CONTACT: CONTACT: David Johnson, Association for Financial Professionals, Media Specialist, +1-301-907-2962, pr@afponline.org

Web Site: http://www.AFPonline.org

Zacks Releases Bull of the Day

Zacks Equity Research highlights Delta Air Lines (NYSE: DAL) as the Bull of the Day and Plexus Corporation (Nasdaq: PLXS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Kellogg Company (NYSE: K), General Mills, Inc. (NYSE: GIS) and Ralcorp Holdings Inc. (NYSE: RAH).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.

Here is a synopsis of all five stocks:

Bull of the Day:

We are upgrading our recommendation on Delta Air Lines (NYSE: DAL) to Outperform based on third quarter results, which matched the Zacks Consensus Estimate, and continuous cost reduction initiatives. Despite soaring fuel prices, earnings on a GAAP basis climbed on fare hikes, capacity cuts and unbundled offerings.

Delta continues to make efforts to reduce its operating expenses, including both fuel and non-fuel costs. The company is also progressing well on upgrading seats, replacing older planes in its fleet, installing WiFi and expanding Economy Comfort to other aircrafts.

Additionally, Delta is expanding its footprint in both domestic and international markets, thereby strengthening its competitive position. Furthermore, merger synergies from Northwest Airlines as well as efforts to deleverage its balance sheet make the stock more attractive.

Bear of the Day:

Plexus Corporation (Nasdaq: PLXS) reported mixed fourth quarter 2011 financial results. The company beat the Zacks Consensus Estimate of $0.50 per share but fell shy of the revenue expectation of $540.0 million. Plexus continues to face cut-throat competition in the EMS market, where component shortages and supply chain constraints are increasing operational complexities.

Moreover, Plexus continues to invest in new sites and increasing headcount that may affect profitability in the near term. We maintain our Underperform rating and set a target price of $25.00.

Further, investment in Plexus is expected to generate just 10% over the next 5 years, compared to the peer group average of 11.5%. We therefore believe that downside potential exists.

Latest Posts on the Zacks Analyst Blog:

Kellogg Misses, Provides Guidance

Kellogg Company (NYSE: K) has posted third-quarter 2011 earnings of 80 cents per share, missing the Zacks Consensus Estimate of 89 cents. The earnings also lagged the prior-year earnings of 90 cents per share by 11%. On a currency-neutral basis, the earnings in the reported quarter plummeted 13% year over year.

Kellogg’s results were driven by weak economic environment, increased cost of goods sold, increased supply-chain costs and due to the reinstatement of incentive compensation costs.

Guidance

Following the earnings results, Kellogg reaffirmed its full-year 2011 internal net sales growth guidance to a range of 4% to 5%. The increased net sales outlook is expected to offset anticipated higher cost pressures. For 2012, internal net sales are expected to grow by 4% to 5%, above long-term annual targets, reflecting price/mix benefits and a strengthening innovation pipeline.

The company lowered its 2011 internal operating profit guidance to a range of down 2% to 4% due to the impact of the third quarter results and expected continued investments in supply chain during the remainder of the year. For 2012, Kellogg expects growth in operating profit to be below its long-term annual targets, as it continues to invest in the future.

Kellogg also expects its full-year 2011 guidance of currency-neutral earnings per share growth to be approximately flat on a year-over-year basis. Assuming no foreign exchange impact, this implies earnings per share of approximately $3.27 to $3.33. Further, the company estimates a foreign exchange benefit of 8 cents, which would result in reported 2011 earnings per share guidance in the range of $3.35 to $3.41.

For 2012, Kellogg expects currency-neutral earnings per share to grow 2% to 4% including a benefit from the three-year $2.5 billion share repurchase program and the impact of continued investments in supply chain, the re-implementation of SAP, and an increase in the level of investment in brand building.

Headquartered in Battle Creek, Michigan, Kellogg engages in manufacture and marketing of ready-to-eat cereal and convenience foods. General Mills, Inc. (NYSE: GIS) and Ralcorp Holdings Inc. (NYSE: RAH) are its competitors.

Currently, Kellogg holds a Zacks #3 Rank, translating into a short-term Hold rating. On a long-term basis, we maintain a Neutral recommendation on the stock.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks “Profit from the Pros” e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=7158.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment

Research is through our free daily email newsletter; Profit from the Pros. In short, it’s your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com

Web Site: http://www.zacks.com

Report on Employment Statistics Released by Feds

Modest Job Growth in a Sluggish Economy is all We can Muster
There is not enough demand to support more than the modest job growth seen in September and October. And therefore, look for more of the same late this year and into the winter. While it may be enough to barely escape recession, the gain in jobs and incomes is not enough to offset consumer pessimism. The economy is simply not strong enough to deliver more than 125,000 jobs a month and continues to struggle to deliver even that much. There is no help on the way from monetary or fiscal policy, at the federal, state, or local level. It all adds up to a labor market struggle, continuing right through the upcoming holiday season and into winter.

About The Conference Board
The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org

Follow The Conference Board
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CONTACT: Carol Courter, The Conference Board, +1-212-339-0232, courter@conference-board.org

Web Site: http://www.conference-board.org

Equity Markets Drive Pension Funds Higher

Equity Markets Drive Pension Funds Higher

Strong asset returns and no change in liabilities in October drove a 4.7 percentage-point increase in the funded status of the typical U.S. corporate pension plan, according to BNY Mellon Asset Management.  The increase, fueled by strong performances in the equity markets, brought the funded status for the typical plan to 74.8 percent.

Year to date, the funded status has declined 10.3 percentage points, according to the BNY Mellon Pension Summary Report for October.

For the month of October, assets for the typical corporate plan increased 6.8 percent, according to BNY Mellon.  The rebound in equities reversed a three-month trend of falling stock values, the report said.

Plan liabilities are calculated using the yields of long-term investment grade corporate bonds.  As there was no material movement in these yields, the liabilities held steady.

“Apparent progress toward a solution to the European debt crisis resulted in investor optimism,” said Jeffrey B. Saef, managing director, BNY Mellon Asset Management, and head of the Investment Strategy & Solutions Group.  “However, as the probability of a resolution rises and recedes, we see continuing market volatility.”

Saef added that global events such as the European debt crisis and the U.S. budget negotiations have become important factors for pension funds as they make asset allocation decisions.   “If favorable outcomes can be achieved for these issues, it could set the stage for continuing the rally in equities that we saw in October. Such a rally would provide significant relief to the funding pressures that sponsors face.”

Notes to Editors:

BNY Mellon Asset Management is one of the world’s leading asset management organizations, encompassing BNY Mellon’s affiliated investment management firms and global distribution companies. Information about BNY Mellon Asset Management can be found at www.bnymellonam.com.

BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $25.9 trillion in assets under custody and administration and $1.2 trillion in assets under management, services $11.9 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available at www.bnymellon.com and through Twitter @bnymellon.

All information source BNY Mellon Asset Management as of September 30, 2011. This press release is qualified for issuance in the US only and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. This press release is issued by BNY Mellon Asset Management to members of the financial press and media and the information contained herein should not be construed as investment advice.  Past performance is not a guide to future performance. A BNY Mellon Company(SM)

 

CONTACT: Mike Dunn, +1-212-922-7859, mike.g.dunn@bnymellon.com

Web Site: http://www.bnymellon.com

Fast Growing Index Business Creates Opportunities

Fast Growing Index Business Creates Opportunities-Image by milletre via Flickr

McGraw-Hill (NYSE: MHP), one of the world’s foremost financial information companies and owner of S&P Indices, and CME Group (NASDAQ: CME), the world’s leading and most diverse derivatives marketplace and 90-percent owner of the CME Group/Dow Jones joint venture, announced today an agreement to establish a new joint venture in the rapidly growing index business.  Under the terms of the agreement, which has been approved by the Boards of both companies, McGraw-Hill will contribute its S&P Indices business and the CME Group/Dow Jones joint venture will contribute the Dow Jones Indexes business to create S&P/Dow Jones Indices, a global leader in index services with annual revenue of more than $400 million.  Approximately $6 trillion in assets are benchmarked against these leading indices.

McGraw-Hill will own 73 percent of S&P/Dow Jones Indices, CME Group will own 24.4 percent through its affiliates, and Dow Jones will own 2.6 percent.  S&P/Dow Jones Indices is expected to be operational in the first half of 2012, subject to regulatory approval and customary closing conditions.  The new company will become part of the new McGraw-Hill Markets company following the separation of McGraw-Hill into two public companies, as announced on September 12, 2011.

As part of the new joint venture, S&P/Dow Jones Indices will enter into a new license agreement whereby CME Group will pay S&P Indices a share of the profits of CME Group’s equity product complex, which is their trading and clearing business for futures, swaps and options on futures.  In addition, the new license agreement expands the products covered under the license to include swaps and extends CME Group’s existing exclusive rights (currently in place through December 31, 2017) to the E-mini and other S&P indexed futures.

Harold McGraw III, chairman, president and chief executive officer of McGraw-Hill, said, “This joint venture expands our dynamic index business and accelerates the growth of the new McGraw-Hill Markets company.  By combining our unique and complementary strengths, we are creating a leading global index provider with the breadth and depth to provide both retail and institutional investors with the cutting-edge products and services they need to make sound investment decisions in today’s complex markets.  In addition, McGraw-Hill Markets will benefit from the new license agreement that changes S&P’s Indices’ relationship with CME Group from a transactional fee-per-trade model to a partnership in which S&P Indices participates in the profits of CME Group’s overall equity product complex.”

Terry Duffy, CME Group executive chairman, said, “This new joint venture reflects CME Group’s continued commitment to creating trading opportunities for our global customer base.  Through the new JV company, we look forward to developing leading risk-management solutions in equity indexes and across other asset classes, as well as diversifying our revenue streams, thereby creating value for our shareholders and customers in both institutional and retail client segments.”

Craig Donohue, CME Group chief executive officer, said, “As part of our global growth strategy, CME Group has continued to expand our index services business, both through our own index futures and options products as well as through new product development at our Dow Jones Indexes subsidiary.  The expanded partnership announced today not only creates a leading index services provider that will benefit our customers and shareholders, but also will deliver new opportunities for innovation, including a long-term, ownership-based exclusive global license for CME Group to use the S&P 500® for futures and options on futures products going forward.”

The transaction is expected to be immediately accretive to McGraw-Hill’s earnings and S&P/Dow Jones Indices is expected to drive profit growth by:

  • Increasing revenue through international and asset-class expansion, new product development, enhanced market data offerings and increased cross-selling opportunities
  • Achieving cost savings and accelerating time to market by leveraging technology, data procurement, other back office functions and McGraw-Hill Markets’ infrastructure
  • Reducing capital requirements and generating free cash flow for parent companies.

 

Alexander Matturri, executive managing director of S&P Indices, will be chief executive officer of S&P/Dow Jones Indices and Lou Eccleston, president of McGraw-Hill Financial, will chair the company’s seven-member Board that will include five directors designated by McGraw-Hill and two by CME Group.

Matturri said, “Those who rely on indices worldwide – from product issuers to exchanges to investors – will benefit from a deeper lineup of indices as well as a business model focused on innovation, performance and impact.  Combining S&P Indices’ institutional strength with CME Group’s global exchange partnerships and Dow Jones Indexes’ retail focus will optimize our ability to respond to the changing global environment with increased speed and efficiency.  Just as important, the structure of the joint venture is flexible enough to allow us to maintain our existing exchange relationships and work with other potential partners that could bring additional capabilities to the new company.”

All current indices will retain their brand names (S&P or Dow Jones).  The S&P 500 and the Dow Jones Industrial Average® will continue to be separately maintained and licensed as the basis for a wide variety of funds and financial instruments.  This transaction does not affect existing licensing agreements with other exchanges, nor does it preclude entering into future agreements with additional providers.

Other provisions of the agreement include:

  • McGraw-Hill will acquire London-based Credit Market Analysis Ltd. (CMA), a leading source of independent data in the over-the-counter markets, from CME Group.  This acquisition significantly expands McGraw-Hill’s asset-class coverage for data and pricing and adds the technology to move into intraday quotes on derivative and other OTC securities.
  • A separate license agreement between Platts, a unit of McGraw-Hill, and CME Group/NYMEX will be extended.

 

McGraw-Hill was advised by BofA Merrill Lynch, Goldman Sachs and Deutsche Bank.  Barclays Capital acted as exclusive financial advisor to CME Group.

Conference Call/Webcast Scheduled for 8:00 am Eastern Time on November 4, 2011:  Harold McGraw III, chairman, president and CEO of The McGraw-Hill Companies, and Craig Donohue, CEO of the CME Group will host a joint conference call this morning, November 4, at 8:00 AM Eastern Time.  This call is open to all interested parties.  Discussions may include forward-looking information.  Additional information presented on the conference call may be made available on the corporations’ respective Investor Relations Web sites at www.mcgraw-hill.com/investor_relations and www.cmegroup.com.

Webcast Instructions:  Live and Replay

The webcast will be available live and in replay through the corporations’ respective Investor Relations Web sites via the following link: http://investor.mcgraw-hill.com/phoenix.zhtml?p=irol-eventDetails&c=96562&eventID=4225043. (Please copy and paste URL into Web browser.)  The archived replay will be available beginning two hours after the conclusion of the live call and will remain available for one year.

Telephone Access:  Live and Replay

Telephone participants are requested to dial in by 7:50 AM.  The passcode is “McGraw-Hill” and the conference leader is Harold McGraw III.

  • For callers in the U.S.: (888) 391-6568
  • For callers outside the U.S.: +1 (415) 228-4733 (long distance charges will apply)

The recorded telephone replay will be available beginning two hours after the conclusion of the call and will remain available until December 5, 2011.

  • For callers in the U.S.: (800) 348-3514
  • For callers outside the U.S.: +1 (402) 220-9676 (long distance charges will apply)

Presenters’ Slides & Remarks

The presenters’ slides will be made available for downloading at the conclusion of the conference call/webcast on the corporations’ respective Investor Relations Web sites at www.mcgraw-hill.com/investor_relations and www.cmegroup.com.  The final prepared remarks will be available for downloading by the end of the business day.

Forward-looking Statements

The forward-looking statements in this news release involve risks and uncertainties and are subject to change based on various important factors, including worldwide economic, financial, liquidity, political and regulatory conditions; the health of debt and equity markets, including possible future interest rate changes; the successful marketing of competitive products; the effect of competitive products and pricing; the risk that the transactions described herein are not consummated on their terms; and other matters described in McGraw-Hill’s filings with the SEC.

About The McGraw-Hill Companies:  McGraw-Hill, which announced on September 12, 2011, its intention to separate into two public companies – McGraw-Hill Markets (working name), primarily focused on global capital and commodities markets and McGraw-Hill Education focused on digital learning and education services worldwide – is a leading global financial information and education company that helps professionals and students succeed in the Knowledge Economy.  Leading brands include Standard & Poor’s, S&P Capital IQ, S&P Indices, Platts energy information services, J.D. Power and Associates and McGraw-Hill Education.  With sales of $6.2 billion in 2010, the Corporation has approximately 21,000 employees across more than 280 offices in 40 countries.  Additional information is available at http://www.mcgraw-hill.com/.

About S&P Indices:  S&P Indices, a leading brand of The McGraw-Hill Companies, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Over $1.25 trillion is directly indexed to Standard & Poor’s family of indices, which includes the S&P 500, the world’s most followed stock market index, the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, the S&P Global BMI, an index with approximately 11,000 constituents, the S&P GSCI, the industry’s most closely watched commodities index, and the S&P National AMT-Free Municipal Bond Index, the premier investable index for U.S. municipal bonds. For more information, please visit: www.standardandpoors.com/indices.

About CME Group:  As the world’s leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk.  CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate.  CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its trading facilities in New York and Chicago.  CME Group also operates CME Clearing, one of the world’s leading central counterparty clearing providers, which offers clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions through CME ClearPort®.  These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk in both listed and over-the-counter derivatives markets.

About Dow Jones Indexes:   Dow Jones Indexes is a leading full-service index provider that develops, maintains and licenses indexes for use as benchmarks and as the basis of investment products. Best-known for the Dow Jones Industrial Average, Dow Jones Indexes offers more than 130,000 equity indexes as well as fixed-income and alternative indexes, including measures of hedge funds, commodities and real estate. Dow Jones Indexes employs clear, unbiased and systematic methodologies that are fully integrated within index families. Dow Jones Indexes is part of a joint venture company owned 90 percent by CME Group and 10 percent by Dow Jones & Company, Inc., a News Corporation company (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV).

Investors Relations Contacts:

McGraw-Hill
Donald S. Rubin
Senior Vice President, Investor Relations
(212) 512-4321 (office)
donald_rubin@mcgraw-hill.com

CME Group
John Peschier
Managing Director, Investor Relations
(312) 930-8491
john.peschier@cmegroup.com

News Media Contacts:

McGraw-Hill
Patti Rockenwagner
Senior Vice President, Corporate Communications
(212) 512-3533
patti_rockenwagner@mcgraw-hill.com

S&P Indices
David Guarino
Director, Communications
(212) 438-1471
dave_guarino@standardandpoors.com

CME Group
Laurie Bischel
Director, Corporate Marketing & Communications
(312) 907-0003
laurie.bischel@cmegroup.com

Web Site: http://www.mcgraw-hill.com

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