UPDATE 1-Credit Suisse sued by Assured over mortgage losses


* Credit Suisse says to defend itselfOct 17 (Reuters) - Credit Suisse Group AG was sued by billionaire Wilbur Ross’ Assured Guaranty Ltd for allegedly misleading it about the quality of mortgage loans underlying securities it insured, exposing it to hundreds of millions of dollars in potential claims.In a complaint filed on Monday, Assured said the Swiss bank’s DLJ Mortgage Capital unit made false representations about 7,338 mortgage loans, or 93 percent of those it reviewed, that underlay six residential mortgage-backed securities (RMBS) offerings marketed by Credit Suisse in 2006 and 2007.Assured said these loans had an original principal balance of $1.8 billion, that it would not have provided insurance had DLJ been truthful and that DLJ has refused to buy back the problem loans.”This failure by DLJ to honor its ‘put-back’ obligations has resulted in massive harm to Assured,” exposing the bond insurer to “hundreds of millions of dollars in current and future claim payments,” the complaint filed with the New York State Supreme Court in Manhattan said.Assured is seeking to force Credit Suisse to buy back the problem loans, or else cover its losses.Credit Suisse spokesman Steven Vames said the bank will vigorously defend against the lawsuit. He said Assured filed the lawsuit to “evade” its insurance obligations and that Assured has made only “minimal” payouts to date.”Assured is a sophisticated multibillion dollar insurance company that received full disclosure about the securities they chose to insure,” Vames said.Philippe Selendy, a lawyer for Assured, did not immediately respond to a request for comment.Banks face many lawsuits by investors and insurers over the quality of loans underlying RMBS. In April, Assured reached a $1.6 billion settlement of a mortgage-related lawsuit with Bank of America Corp .The case is Assured Guaranty Municipal Corp et al v. DLJ Mortgage Capital Inc et al, New York State Supreme Court, New York County, No. 652837/2011.

New England foliage fans undeterred by tropical storm damage


Just seven weeks ago, the storm shut down 557 miles of state roads and closed 193 bridges in Vermont alone, but nearly all of them have been repaired and reopened in time for the annual brilliance of scarlet, orange and yellow.Shop owners in some towns had fretted over thin traffic during weeks of rebuilding efforts across several states. But over the weekend tour companies reported full buses of foliage lovers, and store owners were thrilled to see souvenir buyers lining up at the cash register.In Massachusetts, where the rain-swollen Deerfield River flooded downtown streets and buildings and forced evacuations in Shelburne Falls, Jacinta Hunting isn’t sure whether most tourists are coming back to view the autumn leaves or if they’re just curious about the storm damage that captured headlines around the world.”This weekend has been right on par with last year at this time, but it feels like the peak hasn’t hit yet,” Hunting said at Mo’s Fudge Factor, the sweet shop where she works.Some 3.3 million people are expected to visit Massachusetts during the foliage season, loosely defined as the month of October — the state’s second-biggest month for tourism expenditures after August, said Betsy Wall, director of the Massachusetts Travel & Tourism Office.In that time, tourists will spend an estimated $1.3 billion at businesses like shops, hotels, and tour companies, Wall said.”Experts’ observations that foliage may be peaking a little late this year — about a week late — may be true,” she said. “But it should be no less spectacular.”Peak foliage hues are forecast until about October 24 when vistas again will start to fade in much of inland Massachusetts.SOME TOURISTS UNDETERREDAllen Charlton, who with his wife Paula drove up from Meriden, Connecticut, stopped along a Shelburne Falls promenade facing the Deerfield River rapids to snap pictures of the “beautiful” foliage on the vibrant landscape beyond.There, visiting groups also pointed to piles of debris still visible from the August flooding near the water’s edge, such as uprooted trees and a smashed former quilting studio.Fifty miles to the north, southern Vermont was especially hard-hit by Irene. But the state quickly mobilized comprehensive road and bridge repairs and launched a marketing campaign to lure visitors back for the fall.”We were very concerned at the end of September that our message was not getting heard that roads were reopened and we were ready for business,” said Megan Smith, commissioner of the Department of Tourism and Marketing.”But October has proved to just be extremely busy,” she said. “People have been attending fundraisers and visiting communities that were hardest hit and having a very generous spirit.”Vermont draws about 3.6 million visitors generating $332 million in spending between September and November, said the Vermont tourism office’s operations chief, Greg Gerdel.Experts say the most brilliant fall foliage changes occur when the days start to shorten but the weather often stays pleasant.For the best so-called “Indian summer” colors, trees need plenty of rain and lots of sunshine during spring and summer.Considered one of the best fall foliage viewing spots in the country is northern New Hampshire’s Kancamagus Highway in the White Mountains, which reopened in September after two weeks of repairs.”So far, tourist traffic has been really, really good for us,” said Kim Barnes, tour manager for Travel Kuz, a bus company based in Gill, Massachusetts that features trips to the “Kank,” as it is known locally.”All three tours going out this weekend were sold out,” Barnes said.

TEXT: Fitch Affirms Far Eastern International Bank at ‘BBB-‘


The ratings reflect the bank’s continued strengthened asset quality, adequate capitalisation and sound liquidity profile. The ratings also reflect the bank’s small franchise which renders it less cost-competitive and structurally constrains its profitability.The Stable Outlook reflects Fitch’s expectations that FEIB will maintain sound asset quality and remain adequately capitalized. A significant and sustained improvement of FEIB’s economies of scale would benefit ratings while any excessive risk-taking in pursuit of growth that undermines asset quality or capitalization may put pressure on ratings.FEIB reported an annualized return on equity of 13.3% in H111 (2010: 10%), mainly due to lower loan loss charges and strong recoveries. Fitch expects satisfactory earnings in 2011/2012, underpinned by sound asset quality, and higher fees from an expanding wealth management business as a result of its recent acquisition of ING Securities Company Ltd.FEIB grew its loan book by 16% at end-H111 (sector average: 9%) as the bank increased corporate lending, especially to the public sector and financial institutions - which is low risk relative to other sectors. Fitch views the potential for deterioration in asset quality is limited given the bank’s diversified loan portfolio and improved asset quality. FEIB’s non-performing loan ratio fell to 0.4% while loan loss reserve coverage ratio rose to 390% at end-H111 (end-2009: 1.1% and 101%, respectively).FEIB’s tier 1 ratio fell to 8.7% at end-H111 from 9% at end-2010 due to its strong loan growth. The bank intends to maintain capital at around the current levels, which Fitch views as adequate given its risk profile. FEIB’s sound liquidity profile is underpinned by a stable but concentrated deposit base. The concentration could expose the bank to systemic funding risks - although Fitch views this as a remote prospect given its liquid balance sheet and possible support from its affiliates in Far Eastern Group (FEG).FEIB is a mid sized bank with a deposit share of 1.3% at end-H111. FEG is the bank’s controlling shareholder with a stake of around 60% and controls seven out of nine board seats. FEG is one of the largest conglomerates in Taiwan which owns several leading industrial and service companies across various sectors.FEIB’s rating actions:Long-Term IDR affirmed at ‘BBB-‘; Outlook StableShort-Term IDR affirmed at ‘F3’National Long-Term affirmed at ‘A(twn)’; Outlook StableNational Short-Term affirmed at ‘F1(twn)’Viability Rating affirmed at ‘bbb-‘Individual Rating affirmed at ‘C/D’Support Rating affirmed at ‘4’Support Rating Floor affirmed at ‘B+’Subordinated bond rating affirmed at ‘A-(twn)’

U.S. envoy in Pakistan as suspected drone kills Haqqani aide


The strike came as U.S. special representative Marc Grossman arrived in Islamabad to meet top officials and mend ties strained by recent U.S. allegations that Pakistan is supporting the Haqqanis, blamed for high-profile violence in Afghanistan.Jalil Haqqani, 33, who helped organize the Haqqanis’ operations and coordinate the group’s affairs, was one of four militants killed when two missiles allegedly fired by a U.S. drone struck a house in the village of Dande Darpa Khel.”Jalil was a highly trusted companion of Sirajuddin. He had been with the Haqqani group for a long time and was tasked with handling communications,” one intelligence official said, requesting anonymity.The Haqqanis, led by Sirajuddin Haqqani, have emerged as a major source of tension in U.S.-Pakistani ties, with former chairman of the Joint Chiefs of Staff Admiral Mike Mullen calling them a “veritable arm” of Pakistan’s spy agency, the Directorate of Inter-Services Intelligence (ISI.)Pakistani officials have angrily denied U.S. allegations that it is helping militant groups like the Haqqani network strike at NATO and Afghan targets in Afghanistan, including a September 13 attack on the American embassy in Kabul.”We have never paid a penny or provided even a single bullet to the Haqqani network,” ISI chief Lieutenant-General Ahmed Shuja Pasha told Reuters recently.The Haqqanis are believed to be based in Pakistan’s North Waziristan tribal area, but in a recent interview with Reuters, Sirajuddin said his group felt secure enough to operate freely in Afghanistan and had no need of safe havens in Pakistan.U.S. Secretary of State Hillary Clinton told Reuters on Tuesday that the United States remains open to a peace deal including the Haqqanis, despite their alleged involvement in attacks in Afghanistan, including a September 13 attack on the American embassy in Kabul.”We are not shutting the door on trying to determine whether there is some path forward,” Clinton told Reuters when asked whether she believed members of the Haqqani network might reconcile with the U.S.-backed Afghan government.Sirajuddin told Reuters in September that his group would take part in peace talks, but only if the Afghan Taliban did so as well, a shift from his earlier position.He has previously rejected several peace gestures from the United States and President Hamid Karzai’s government, calling them an attempt to “create divisions” between militant groups.Grossman, appointed in February, held meetings with Pakistan’s prime minister, the chief of the country’s powerful army and the foreign minister, according to Pakistani state television.His visit comes at a time of some of the worst tensions in U.S.-Pakistani ties, already badly strained after a May 2 commando raid killed al Qaeda leader Osama bin Laden, who had apparently been living in a garrison town near Islamabad for nearly five years.The United States did not tell Pakistani of the raid in advance because of concerns bin Laden might have been tipped off by possibly sympathetic elements in the ISI.Pakistan reacted angrily to the raid, denouncing it as a breach of sovereignty and a display of mistrust between allies.Clinton said Wednesday the United States had no choice but to work with Pakistan in trying to stabilize neighboring Afghanistan.”As frustrating as it is, we just keep every day going at it and I think we make slow, sometimes barely discernible progress,” she said at an event sponsored by the Center for American Progress in Washington, while answering questions.”But we’re moving in the right direction.”