World important news by Detra

The United Nations has been sending mixed signals lately about NATO’s record with civilian casualties in the alliance’s sixth month of air strikes against Libyan leader Muammar Gaddafi’s troops and military sites. U.N. officials and diplomats said it was hardly surprising that different senior officials at the world body are finding it hard to keep a consistent line on the conflict, which, back in March, most of them had hoped would be over in a few weeks.  But it has dragged on. Now Gaddafi’s government is complaining about what it says are mounting civilian casualties caused by NATO bombs, many of them children. Diplomats from alliance members acknowledge that there have been some civilian casualties, which they regret. But they question some of the figures that have been coming out of Tripoli. Libya’s state television, which was targeted by NATO late last month, regularly broadcasts gory images of blood-soaked bodies it says are civilians being pulled from rubble after NATO bomb attacks. Last week the head of the U.N. cultural and scientific agency UNESCO, Irina Bokova, issued an unusually sharp rebuke of the alliance for its July 30 air strikes against Libyan state television, which she said killed several “media workers.” “I deplore the NATO strike on Al-Jamahiriya and its installations,” Bokova said in a statement. “Media outlets should not be targeted in military actions.” Several U.N. diplomats from NATO member states privately expressed surprise at the statement from Bokova, herself a citizen of NATO member Bulgaria. Asked about her criticism, U.N. Secretary-General Ban Ki-moon’s deputy spokesman Farhan Haq suggested that Ban was not overly concerned with the performance of NATO in Libya. “In terms of that, we would need further details about what the operations were that were conducted. But certainly, the Secretary-General believes that resolution 1973 has been used properly in order to protect civilians in Libya and he has continually emphasized the need, as this proceeds, to make sure that civilians in Libya will be protected.” NATO defended the attack on Libyan television and said it had no evidence that anyone was killed during the strikes. With Ban’s backing, NATO began launching air strikes against Gaddafi’s forces in March on the basis of Security Council resolution 1973. That resolution authorized U.N. member states to enforce a no-fly zone over Libya and to take “all necessary measures” to protect civilians short of occupying the country. Russia, China, Brazil, South Africa and India — the so-called BRICS developing countries — seized on Bokova’s statement and brought it up during a closed-door meeting of the U.N. Security Council this week. One senior council diplomat said it was clearly a coordinated and pre-planned effort on the part of the BRICS to launch a surprise assault on Britain, France, the United States and other members of the NATO alliance that have been attacking forces loyal to Libyan leader Muammar Gaddafi since March. Two days after expressing Ban’s satisfaction with the protection of civilians in Libya, the U.N. press office issued a statement with a very different tone: “The Secretary-General is deeply concerned by reports of the unacceptably large number of civilian casualties as a result of the conflict in Libya.” Although it did not explicitly blame NATO, diplomats and U.N. officials said the statement was clearly referring to the alliance. Diplomats said that Ban’s team of close advisers received several phone calls from Western diplomats who took offense at Ban’s statement. One envoy said of it: “It’s what the Russians would call a balanced statement.”  They said it was certain to win praise from the disgruntled BRICS nations, four of which abstained from the March 17 vote on resolution 1973, allowing it to pass while making clear they had reservations about it. (South Africa, whose delegation in New York is now one of the most vocal critics of NATO operations in Libya, was the only BRICS nation to vote for 1973.) The following day Haq issued a clarification of Ban’s statement, saying that Ban “of course recognizes and appreciates NATO efforts to avoid civilian casualties.”

* Freeport union denies workers cut pipeline* Force majeure at Freeport Indonesia maybe hours or days away -analystJAKARTA, Oct 18 (Reuters) - Freeport-McMoRan Copper & Gold is looking at a possible controlled shutdown to safeguard its multi-billion dollar assets at its vast Grasberg mine in Indonesia, as a worker blockade continued to disrupt production, the company said on Tuesday.Freeport Indonesia halted production at its Grasberg mine on Monday due to security fears, worker blockades and after the main pipe carrying copper concentrate to its port was cut, in the worst supply disruption since a strike began a month ago.Analysts and traders fear that the company might declare force majeure on shipments soon, although there was no word from Freeport.”The road is still blocked… that’s true and that’s a big problem for us,” a Freeport spokesman told Reuters. “We are continuing to assess whether or not the security conditions are conducive for us to continue production.”Based on the situation that we had Sunday night and Monday, we were preparing for contingencies for a controlled shutdown.”He added that this would preserve its $2-$3 billion asset in Indonesia. Preparations for a controlled shutdown and mothballing of the mine would begin with the flushing of all remaining materials from its pipelines.Freeport said the main pipe transporting copper concentrate from Grasberg, the world’s second-biggest copper mine, was cut in a sabotage earlier on Monday, helping copper prices to initially rise the previous day to a three-week high.Three-month copper on the London Metal Exchange fell 1.7 percent on Tuesday at $7,364.25 a tonne at 0525 GMT, on persistent concerns over the euro zone debt crisis.”If the strike and mine closure is ongoing, this will underpin the price at the $7,000 a tonne mark almost irrespective of the Eurozone sovereign debt situation,” said Citigroup analyst David Thurtell.”Force majeure can surely only be hours or days away.”The stoppage is a setback for Freeport after it said last week it had cranked up copper concentrate output at Grasberg to average above 4,000 tonnes daily by relying largely on non-unionized and contract workers, a move criticized by the government.”For the repair of the pipeline — the section in mile 45 that was cut — I believe we’ve already got a temporary repair done on that,” the spokesman said.”There is no basis for the 30-day timeline,” he said, referring to comments made by a company source late on Monday that the concentrate processing plant will be shut for 30 days.The company said it had still managed to ship 103,189 tonnes of concentrate in the past week, though with blockades to the port and rising worker tension, it was unclear if further shipments can be made.The Indonesian energy and mining minister said some production had resumed on Tuesday, but the firm could not confirm this.”We still have concentrate that’s been dried at the port side. The last I heard, there were hopes to continue loading concentrate on ships,” the spokesman said.”We still have people in Tembagapura, who are going to work.” Tembagapura is where the mine is located.A second company spokesman said in a statement that the miner is currently producing concentrate at reduced levels, but “will temporarily suspend and/or curtail concentrate production as conditions warrant.”BLOCKADESRoad blockades, part of the prolonged strike by around 12,000 of the mine’s 23,000 workers, have stopped containers carrying food and medicine from reaching the mine and jet fuel from reaching the nearest airport, the company said on Monday.A clash earlier last week between striking workers and police near the mine led to the death of two protesters — one of whom was a member of an indigenous tribe — and injured others, as disgruntled and striking Grasberg workers protested after being barred from collecting belongings from barracks.”The road to the port is blocked and has been blocked since last Monday, which means we can’t get the supplies that we need,” the spokesman said. “We continue to work with the government and the security authorities, to try to provide adequate security.”An official with the Freeport workers union said on Tuesday it was still blockading roads, but plan to stop once a permanent agreement has been reached with the company.The official added that Freeport had not approached the union for more negotiations, while there had been no further security incidents on Tuesday.”Community activities are running normally, except logistic distribution for the company as roads are being blocked,” said Juli Parorrongan, a Freeport union spokesman.”We haven’t received information on who did the (pipe) cutting,” she added. “But I was informed that there was a landslide at mile 70 and the pipe could be broken because of it. I assure you, it was not the workers.”

David Wallis, head of funding at Nationwide, explained that as the institution typically had low funding needs and was an infrequent issuer (this is its third public RMBS in three years), he was confident of a positive reaction for Silverstone 2011-1.And to give investors as broad an opportunity as possible to access the programme, roadshows were scheduled for the week of October 3 in the US and Europe showing three and five-year bonds. The issuer was already aware, it seems, of which investors would express the most interest.”There was an expectation we would meet with strong demand in US dollars,” said Wallis.The dollar buyers did not disappoint. An initial update showed demand exceeding US$2.5bn for the three-year while the five-year sterling tranche lagged behind at £150m. The bonds were talked in line with Holmes - launched by Santander UK last month - at 155bp and 165bp area, and emerged at US$2.7bn and £150m in size at talk.The cost of issuing in euros, meanwhile, remains prohibitive - so much so that Nationwide avoided euro bonds completely. Wallis explained that the basis swap between euro and sterling was around 40bp, or just above, depending on the maturity.”It was difficult to justify issuing in euros for the economics of the transaction with the basis swap at that level,” Wallis said. On Friday, the three-year swap was quoted at 37bp/43bp.The size of the dollar tranche clearly compensated for the lack of euro notes though - as well as limited sterling bonds - while an usual fixed-rate dollar piece was added late on in the process. “We had interest from investors for a long-dated tranche and looked at a number of maturities. Nine years hit the right spot,” said Wallis.This tranche pays 4.15% until 2020, and then reverts to floating.RBS, meanwhile, pre-placed its deal entirely. Arran 2011-2, as with Silverstone, contained minimal sterling issuance, with investors seemingly preferring the liquidity of dollars. Printing on Monday, Arran was sold almost exclusively to JP Morgan and Citigroup (or affiliates of these two). Its structure included just £220m of sterling bonds, ?220m of euro notes and US$1.895bn in US dollars.JP Morgan bought the majority of the US$725m one-year Class A1c at three-month Libor plus 135bp and some of the 2.8-year £70m and ?220m Classes A2a and A2b at 160bp and 155bp respectively. Citigroup, meanwhile, also took some of the Class A2 bonds, and most of the £150m and US$500m 4.6-year Classes A3a and A3c at spreads of 175bp. STRUCTURAL VARIATIONS These levels are 5bp wider than Silverstone and Holmes for the three-year dollar notes and 10bp outside for the five-year bonds. Arran, however, typically trades back of Holmes and one source involved in the deal said it was down to it offering a standalone issue versus a master trust structure.Portfolio features may have also been an influence as Arran pool’s was just three months seasoned, included some buy-to-let as well as product switches. This resulted in credit enhancement of 22.4%, higher than both Holmes 2011-3 (16%) and Silverstone 2011-1 (17.2%).The demarcation between standalone and master trust has much larger pricing implications for the very short tranches with average lives of around a year or so. Hard bullets from master trusts aimed at US money market funds under Rule 2a7, for example, price more than 100bp inside amortising bonds in standalone issues.One source away from the deals explained that master trust structures such as those used by Santander (Fosse and Holmes) and Lloyds this year (Arkle) can factor in short-dated hard bullets because of the larger number of mortgages in a trust than in a single deal.There is more more cash flowing from the mortgage pool to assure investors of payment by a certain date. Typical pass-through deals would depend on the payment (CPR) rate, he said, and so do not have that guarantee. The downside is that bullets are more collateral-consumptive.Recent 2a7 notes have been priced in the low teens over Libor with maturities of a year or less. Standalone deals cannot match this, and even though the tranches at the top of the structure have short weighted average lives, the legal final maturities are considerably longer.Arran 2011-1, for example, had a one-year average life on its US$725m Class A1c, but a legal final maturity of 2048 - far too long for money market funds - which accounts for the 122bp pricing differential between this piece at 13bp and the 0.8-year tranche of Holmes.SIZE ACHIEVABLE IN DOLLARS What Holmes, Arran and now Silverstone 2011-1 do all have in common is highlighting that the US dollar market remains the only place to get deals done in size. These three have sold US$8.395bn of dollar bonds - that equates to a hefty 85% of the issues - compared with just £555m in sterling and only ?420m in euros.And it may not only be UK issuers that are coveting the US investor base, as sources suggest that Dutch issuers are also eyeing the market. It may not necessarily be in US dollar-denominated bonds, but funded in euros should they obtain 144a issuance capability. Doing so would allow them to target a large investor base that is clearly hungry for the spread offered by European products.It may require some explanation of the near 100% LTVs, or higher in some cases, that characterise Dutch RMBS, but from an investment point it can provide a substantial pick up from an asset class that has performed extremely well throughout the crisis.One European investor even estimated that a US buyer could make up to 50bp investing in a five-year or shorter euro-denominated Dutch RMBS paying around 155bp and swapping it to dollars.

The euro zone is under pressure from its G20 partners to unveil a convincing plan at this summit to address the bloc’s debt crisis and prevent the world economy from falling back into recession.”Any decision should be enforced immediately, concerning the strengthening of the EFSF or concerning increased guarantees for our banks,” Barroso told French LCI television.Barroso, who was speaking after meeting with French President Nicolas Sarkozy in Paris, insisted a review of the second Greek bailout package decided on July 21 was necessary but it should retain the voluntary involvement of banks and not trigger a credit event.”We have to recognise that we’ll need to review some of the parameters of July 21 … But it is essential to have a voluntary mechanism and to prevent any Greek default,” he said.According to sources, the two heavyweights of the euro zone, France and Germany, disagree on the scope of this review, with Berlin pushing for a bigger reduction of Athens’ debt pile and for a larger contribution of private investors than the one initially foreseen.The two countries agreed last Sunday that European banks should be recapitalised. A decision is expected on Oct. 23 on how much money will be needed but Barroso declined to comment on any figure.He said some countries in Europe should sustain economic activity by using fiscal stimulus, echoing a similar call in September by U.S. Treasury Secretary Timothy Geithner which was then opposed by Germany, one of the few countries in the euro zone with such leeway.”Countries with room for manoeuvre should boost growth”, Barroso said.