7/31T8:40 Co. in the News

ABX Barrick Gold sells non-core royalties to Royal Gold-Achieves lower royalties on Cortez-Crossroads (42.41 )
Co announces that it has entered into a definitive agreement to sell certain non-core royalties to Royal Gold (RGLD) in exchange for $150 mln in cash and a significant reduction of royalties otherwise payable to Royal Gold on Barrick's 100%-owned Cortez property. This transaction rationalizes Barrick's non-core royalty portfolio and improves the economics of the permitted Crossroads deposit at one of the company's core operations. The majority of these royalties held by Royal Gold cover claims contiguous to the existing operations at Cortez, including the Crossroads deposit. The lower royalties will remove a major obstacle to mining the deposit.


EOG EOG Resources upgraded to Outperform at Howard Weil (103.00 -2.15) -Update-
Howard Weil upgrades EOG to Outperform from Mkt Perform, following last night's Q2 results, saying the results for the qtr were a good beat despite lower NGL volumes from infrastructure constraints in the Barnett. Firm says that there was little hype in the call today. A targeted net debt/cap of 8% by YE08 illustrates the strength of EOG's balance sheet, they say. Reigning in the fundamentals, EOG mentioned ROCE and debt-adjusted production growth more than once. With the Company's Barnett volumes peaking at the end of '09 and with the well-known Bakken outperformance, they believe the Company's 13-15% '09 production growth forecast may be conservative

Notes from the Edge:

The raters are finally understanding the ominous impact that negative equity has across all loan types and borrower grades. Negative equity knows no bounds. While factoring in the unprecedented home price deprecation seen in the past 12-months and projecting that out, they are discovering that those who purchased a home as early as 2004 are now under water and at an exponentially greater risk of default. Even many who purchased much earlier and put a second mortgage on the property are in a negative equity position. This is making their modeling systems ‘TILT’. Due to this I believe we will see some serious ratings actions over the next 90-days stretching deep into the heart of the ‘Prime’ loan sector

Global Scoreboard -- percentage gained or lost so far this year --INDEXS&P 500 -13.97%Frankfurt DAX -20.68%London FTSE 100 -17.62%Hong Kong Hang Seng -19.97%Paris CAC-40 -23.04%Tokyo Nikkei 225 -14.03%ASIASeoul Composite -17.39%Singapore Straits Times -16.71%Sydney All Ordinaries -23.33%Taipei Taipex -17.54%Shanghai Shanghai B -41.60%

July 30 (Bloomberg) -- Merrill Lynch & Co. gave up any potential gains on $30.6 billion of securities it sold this week while remaining ``on the hook' for losses, Bank of America Corp. analysts said, revising their earlier positive view of the sale.
Merrill agreed to sell collateralized debt obligations to private-equity firm Lone Star Funds for about 22 cents on the dollar and to lend about 75 percent of the purchase price. Bank of America analysts, who said yesterday the sale ``suggests the endgame' for banks' CDO risk, today wrote they had overstated the ``positive implications' of the transaction.
A drop in the value of the CDOs by about a further 5 cents would wipe out the equity from Lone Star and ``leave Merrill back on the hook for the exposure,' said the analysts, led by Jeffrey Rosenberg in New York. Lone Star bought ``the upside of the underlying subprime assets in the CDO pools' while Merrill retained ``most of the downside,' they wrote.
Merrill, the third-biggest U.S. securities firm, has written down or lost almost $52 billion mainly on mortgage-backed CDOs since the third quarter of last year. Financial firms worldwide have marked down or lost $474 billion since the start of the credit crunch.
Merrill yesterday raised $8.55 billion by selling new shares to cushion the loss on the asset disposal. The bank will have recourse only to the CDOs it sold should Lone Star fail to repay the loan, it said July 28.5-Cent Call OptionLone Star effectively ``purchased a call option on the value of the subprime assets backing the CDO' for the $1.68 billion it paid from its own funds, or about 5 cents on the dollar, the Bank of America analysts wrote today. That is about the level indicated by the lowest-rated portions of the benchmark Markit ABX.HE BBB- indexes of mortgage-backed securities.
An option gives the holder the right and not the obligation to buy or sell a security at a stated price. A call option, which gives the right to buy, is a bet the price of a security will rise.
The Bank of America analysts wrote yesterday that the sale ``creates initial losses but relieves future uncertainty,' before issuing its report today, titled ``On Second Thought?'…