Eleven More Banks Join Spectrum Biller Network
MIAMI - Eleven companies have signed letters of intent to participate in Spectrum LLC, the Internet bill presentment joint venture of Chase Manhattan Corp., First Union Corp., and Wells Fargo & Co.New participants include Comerica Inc., First Tennessee National Corp., HSBC USA Inc., Mellon Financial Corp., M&I Marshall & Ilsley National Bank, Michigan National Corp., Summit Bancorp, and Wachovia Corp. A news release did not name the other institutions that intend to participate.
William B. Harrison Jr., president and chief executive officer of Chase Manhattan, said the "big banks coming into this electronic exchange will create critical mass. It's another positive step."
Like the founding members, the 11 new participants will be able to send electronic bills to Spectrum from their corporate banking customers. Spectrum functions like an exchange and routes those bills to the proper recipients, so long as they are retail customers of a Spectrum bank.
"Virtually every major financial institution is interested in joining, and we expect to continue to build membership at an accelerated pace," said Ronald Braco, the chairman of Spectrum's board and a senior vice president at Chase Manhattan.
The new participants will "probably own a piece" of Spectrum, Mr. Harrison said.
The founders originally set up the joint venture as a for-profit corporation in which they would share equally in equity and income. The bill routing platform of Spectrum has been operating since the end of November. The company plans to add a payments capability in the second quarter of next year.
- Carol Power and Ross Snel
Phoenix's Finova to Buy Commercial Loan Unit
PHOENIX - Finova Group announced an agreement Wednesday to buy the commercial lending subsidiary of Fremont General Corp. for $765 million in cash.The unit, Fremont Financial Corp. of Santa Monica, Calif., provides secured working capital and term loans averaging $2 million to $4 million to midsize customers throughout the nation. The deal, which is slated to close by Dec. 31, is expected to supplement Finova's earnings in 2000.
The acquisition will expand Finova's ability to lend to midsize businesses, said Finova chairman and chief executive officer Sam Eichenfield. "This acquisition is an ideal fit in that, while adding critical mass to our business credit division, it deepens our talent pool and significantly expands our client base," he said. Fremont General, which has assets of $8.5 billion, posted a third-quarter loss of $86 million, much of it stemmed from underwriting losses in its worker's compensation business. It said it is narrowing its focus to what it considers its core business, residential and commercial real estate.
- Olaf de Senerpont Domis
Duff Adds to Its Stake In Argentine Agency
LONDON - Duff & Phelps Credit Rating Co. has further expanded its international network of offices by acquiring majority control of Buenos Aires-based Duff & Phelps Calificadora de RiesgoThe U.S. rating agency said the move would help it expand operations in Argentina and meet increased demand from investors for standardized ratings on companies and various countries.
Duff & Phelps did not disclose how much it was paying to increase its stake in the Argentine rating agency. Global investors have been major buyers of Argentine international bonds since the start of the decade and more recently have also invested heavily in Argentine equities.
Duff & Phelps and other major rating agencies such as Standard & Poor's, Moodys Investors Service, and Fitch IBCA have been steadily expanding outside the United States