assistance with collection accounts

(Updates to afternoon)

By Edward Krudy

NEW YORK (Reuters) - U.S. stocks fell Tuesdayamid concerns about European banks and as investors booked strong gains from last week.

Analysts said the decline after Wall Street's best week inthe past two months indicated the market was likely to remainrange bound, with bouts of volatility in the near term.

Worry about the health of Europe's banks resurfaced afterthe Wall Street Journal reported major lenders understatedholdings in potentially risky government debt during testsdesigned to probe banks' strength.

Although investors said the report contained little newinformation, it was enough to prompt profit-taking. Bankingstocks experienced much of the selling, with Bank of AmericaCorp and JP Morgan Chase & Co down around 1.3percent and 1.9 percent, respectively.

"It looks more like a consolidation than some type ofconviction selloff," said Maier Tarlow, a New York StockExchange floor trader at Raven Securities. "We think that themarket has got a bullish trend now, and unless we see repeatedselloffs on better volume, we're going to keep that opinion."

The Dow Jones industrial average dropped 67.05points, or 0.64 percent, to 10,380.88. The Standard & Poor's500 Index shed 7.89 points, or 0.71 percent, to1,096.62. The Nasdaq Composite Index fell 16.19 points,or 0.72 percent, to 2,217.56.

The losses followed the long Labor Day holiday weekend.Indexes had regained ground last week as stronger-than-expectedeconomic data helped to quell fears of a double-dip recession.

The KBW Bank index lost 2.4 percent and the S&Pfinancial index fell 1.6 percent. Bank of America fellto $13.34 and JP Morgan Chase was down to $38.44.

Also weighing on banks, Germany's banking association saidthe country's 10 biggest banks may need 105 billion euros innew capital as regulators revamp rules designed to preventfuture crises.

European bank shares traded on Wall Street also lostground. Barclays PlcU.S.-traded shares dropped 5.4percent to $19.18, while Deutsche Bank AGADRs were down2.7 percent at $62.84, and UBS AGADRs dipped2.8 percent to $17.55.

Traders said volume was light following the Labor Dayholiday, underscoring a lack of conviction selling. Declinerstopped advancers by about five to two on the New York StockExchange.

Bruce Zaro, chief technical strategist at Delta GlobalAdvisors in Boston, said he expects markets to remain volatileand range bound until after U.S. elections in November. Oncethat was over, markets could rally sharply, he said.

"I don't think it's necessarily a reversal that has a lotof upside from here," he said of last week's rally. Part of themove was "a reactionary bounce to the pretty dramatic sellingwe had in August," he said.

Zaro said he saw the S&P 500 hitting a ceiling at around1,120 to 1,130, with a downside limit at around 1,000 before alate-year rally after the elections.

Among advancers, Oracle Corp jumped 4.8 percent to$24.02 after the world's third-largest software maker hiredMark Hurd, the former boss at Hewlett-Packard Co, aspresident. Hurd resigned from HP in August after a probe intosexual harassment allegations. (Reporting by Edward Krudy; Editing by Kenneth Barry)

Chinese state-owned chemical company Sinochem Corp. has approached Singapore's state investment company Temasek Holdings to discuss the potential creation of a bidding consortium for Potash Corp. of Saskatchewan Inc. (POT), a person familiar with the matter said Tuesday.

The move comes as companies from China--one the world's largest importers of the fertilizer potash--weigh their options to rival a hostile, $39 billion takeover bid by BHP Billiton Ltd. (BHP) amid continued efforts to sustain and expand the world's most populous country's food supply. Although Potash Corp. rejected last month's bid as "grossly inadequate," a competing bid led by China could prove unwelcome to the Canadian province, which holds the world's biggest reserves of potash, and its export cartel, which is keen to keep a grip on its pricing power.

"They (Temasek) have been approached by Sinochem to participate in a bidding consortium that might also include private-sector companies," the person said. "But it's very premature, talks are in early stages," the person said. "No decision has been taken yet. It will become more clear within the next two weeks or so."

Word of Sinochem's approach to Temasek follows a Wall Street Journal report saying Sinochem has hired HSBC Holdings PLC (HBC) to advise it on its options regarding Potash, and an earlier Journal report saying a consortium led by Chinese private-equity fund Hopu Investment Management Co. was studying the feasibility of a rival bid. This consortium is made up of investors from Canada, the U.S. and Asia, a person familiar with the situation told the Journal.

Temasek and Goldman Sachs Group Inc. (GS) are among the founding members of Hopu, but it isn't clear whether the Singaporean company would participate on its own in a consortium, or along with Hopu. The person familiar with Sinochem's plans said Tuesday that the consortium would also have to include a third member from the private sector in order to pass muster with Canadian regulators.

Sinochem has longstanding ties to Potash, which owns 22% of Sinochem's fertilizer unit. As it increases in population and wealth, China is keen to maintain stable supplies of the potassium-rich salts, a key ingredient in fertilizer.

But any Chinese-led bid would have to overcome resistance from Saskatchewan's government, which is worried that Chinese ownership could lower prices and endanger revenue. Potash revenue accounted for 15% of the province's budget as recently as 2008, though that is projected to drop to 2% this fiscal year as demand has dropped.

The province's premier, Brad Wall, whose opinion will be sought by federal regulators in charge of approving the deal, told Dow Jones Newswires last week that he would have serious concerns about Chinese ownership of Potash Corp.

Spokesmen for Potash Corp., BHP Billiton and export cartel Canpotex Ltd. declined to comment on Sinochem's approach to Temasek. Canpotex is made up of the province's top producers--Potash Corp., Mosaic Co. (MOS) and Agrium Inc. (AGU)--distributing and setting prices for potash exported to most markets other than the U.S.

Mark Smith-Windsor, vice president of Saskatoon investment firm MGI Securities, said a state-owned Chinese investor such as Sinochem would likely have to compromise over ownership structure to succeed in a bid.

"The concern is that the Chinese desire is to maintain stable supply at low prices, which isn't necessarily what an investor or a government here would want," Smith-Windsor said. "They could do a partnership with an offtake agreement, which guarantees them a certain amount of supply at half the price--or something like that."

Chinese buyers have been bargaining hard for low potash prices against potash export cartel Canpotex. In some cases, buyers have delayed contract negotiations or refused to sign long-term contracts.

BHP has said it prefers a floating market price for potash and ramped up production, rather than the control over prices exercised by Canpotex. BHP has said its plan would be to "ultimately" market Potash Corp.'s production outside of Canpotex.

Saskatchewan Premier Wall has said in turn that he would look at possibly changing the province's potash royalty regime or imposing conditions on mining licenses if BHP Billiton's takeover endangers Canpotex.

(The Wall Street Journal's Dinny McMahon and Phred Dvorak contributed to this article.)

Copyright © 2010 Dow Jones Newswires

NEW YORK -(Dow Jones)- International CCE's $1 billion bond has launched, according to a person familiar with the matter.

The 10-year $525 million tranche launched at 100 basis points over Treasurys and the five-year $475 million portion launched at 80 basis points over Treasurys. The bond will price later Tuesday.

Meanwhile, France Telecom's (FTE, FTE.FR) $750 million bond has priced, according to a person familiar with the matter.

The bond sold at 82 basis points over Treasurys, to yield 2.238%.

These bonds are one of several new investment-grade bonds flooding the market Tuesday, with Dell Inc. (DELL), Home Depot Inc. (HD) and other top-rated companies issuing more than $9 billion in debt, exceeding the total of $5.35 billion in all of September last year.

Companies were able to take advantage of low interest rates because investors had few savory alternatives: Stock market volatility spiked on renewed concern about the health of Europe's biggest banks and yields on money markets and government debt are plumbing record lows.

"Interest rates are low, we got past the payroll numbers on Friday and everyone is chasing yields," said Patrick Sporl, a senior portfolio manager at American Beacon Advisors in Fort Worth, Texas.

Tuesday was especially busy because this week--the first after the unofficial end of summer--includes two holidays: Labor Day on Monday and Rosh Hashana, the Jewish New Year starting Wednesday at sundown. "The calendar is such that we have a lot of deals," Sporl said. In a holiday-shortened week, he added, issuers are keen to sell bonds sooner rather than later.

Dell was selling a $1.5 billion deal, as were the Canadian Imperial Bank of Commerce (CM, CM.T) and the insurer AON Corp. (AON). Home Depot was selling $1 billion of debt, its first bond sale since 2006, as were Medco Health Solutions Inc. (MHS) and International CCE, the soft-drinks bottler.

Allergan Inc. (AGN) was in the market with a $650 million 10-year note; Hospira Inc. (HSP) with a $500 million 30-year bond; and Burlington Northern Santa Fe (BNI), with a $500 million note.

Societe General (SCGLY, GLE.FR) and the Province of Ontario had benchmark notes, Health Care Reit Inc. (HCN) had a $450 million seven-year note and Parker Hannifin (PH) had a $300 million note.

Canadian Imperial Bank of Commerce's three-year note has launched, according to a person familiar with the matter, and is due to price later Tuesday. It is rated Aa2/A+/AA- and launched at 75 basis points over Treasurys. Barclays Capital, Citigroup Inc. (C), J.P. Morgan Chase & Co. (JPM) and CIBC are leading the sale.

Dell's $1.5 billion three-part note has maturities of three, five and 30 years, and is expected to price on Tuesday. Barclays Capital, Goldman Sachs (GS) and Morgan Stanley (MS) are joint leads on the deal.

The joint bookrunning managers are J.P. Morgan Securities LLC, Barclays Capital and Deutsche Bank Securities Inc., and the co-manager is Wells Fargo Securities, LLC.

Copyright © 2010 Dow Jones Newswires

U.S. stocks declined Tuesday as investors sought safer havens to plant their money, with worries flaring up about Europe's banks.

"Just as the glass appeared half-full last week, the glass is looking more like half-empty today," John Stoltzfus, an analyst at Ticonderoga Securities, wrote in a note.

"In Europe, investors are focusing on the concerns over implications for the region's economic health, financial sector and earnings coming from further austerity and fiscal reform," he said about reports that European banks might have more risky debt on their books than previously thought.

The Dow Jones Industrial Average (DJI) fell 73.26 points to 10,374.6, with 24 of its 30 components losing ground. American Express Co. (AXP) led the blue-chip decliners; its shares were down 3.4%.

McDonald's Corp. (MCD) led the Dow's limited gains, with shares of the fast-food giant up 1.2% at $75.95, surpassing its prior record hit on Friday. The chain's gains came as troubled rival Burger King Holdings (BKC) last week agreed to sell itself to investment firm 3G Capital.

The S&P 500 Index (SPX) shed 8.88 points to 1,095.63, with financials weighing the most heavily among its 10 industry groups. Lincoln National Corp. (LNC), off 4%, was among the notable decliners.

The government on Tuesday announced it would sell warrants in Lincoln National and Hartford Financial Services Group Inc. (HIG) as the insurers finish their exit from the Troubled Asset Relief Program.

Barclays PLC (BCS) fell 5.6% after the British bank said American Robert Diamond Jr. would take over as chief executive next year.

Bucking the down trend, shares of Oracle Corp. (ORCL) advanced 5.6% after the database-software titan said it hired Mark Hurd, the former Hewlett-Packard Co. (HPQ) chief, as one of its presidents.

The Nasdaq Composite Index (RIXF) slid 18.92 points to 2,214.83.

The dollar gained against the euro and gold, and U.S. Treasury prices rallied as Wall Street echoed moves from overseas with no domestic economic data on Tuesday's docket.

"One reason why euro-zone concerns are back in the spotlight are the strikes in France and London, protesting the austerity measures put in place," noted analysts at Action Economics.

On the New York Mercantile Exchange, gold futures gained $8.20 to end at $1,259.3 an ounce, topping its record close reached in June. Crude futures were off 32 cents at $74.28 a barrel.

Treasury yields held steady after the government's sale of $33 billion in 3-year notes, awarded at a record low 0.79% rate.

The yield on the 10-year Treasury note (UST10Y), a measure used in setting interest rates on mortgages and other consumer loans, fell to 2.622% as its price rose.

More than two stocks were on the decline for each issue rising on the New York Stock Exchange, where volume topped 410 million as of 1:50 p.m. Eastern.

Usually slow during the summer, trading volume has been particularly low of late, and did not show any immediate signs of picking back up as traders returned from their vacations after the Labor Day holiday.

On Wednesday, the Federal Reserve releases its so-called Beige Book, offering a glimpse at regional economic activity, while on Thursday the government releases its weekly count of those filing initial claims for unemployment benefits.

Copyright © 2010 Dow Jones Newswires

UBS AG (NYSE:UBS) rehired Bruce Amlicke to oversee its primary hedge fund after he left five years ago to serve as an investment chief with Blackstone Group (NYSE:BX), according to The Wall Street Journal.

Amlicke is the alternative investment unit’s first senior hire since former head Joseph Scoby left the bank in June after 23 years.

The veteran hire, based in Stamford, Connecticut, reports to William Ferri, the newest head of the division, the newspaper reported.

In the position, Amlicke is reportedly responsible for more than $20 billion in client assets invested in hedge funds within the unit.

He initially joined the company as a currency-options trader at its subsidiary O’Conner & Associations, and in 2000, with UBS, he helped start the alternative investment solutions business.

He left the company in 2004 to become an investment chief at Blackstone.

By Dave Clarke

WASHINGTON (Reuters) - Prospects are dimming that anew U.S. consumer agency head will be in place this year,prompting fears that what was envisioned by supporters as apowerful watchdog could get off to a rocky start.

A dwindling legislative calendar and Republican momentumgoing into the November elections could lead to a protractedconfirmation process, especially if the White House nominatesHarvard law professor Elizabeth Warren, who Wall Street hasblasted for her attacks on banking practices.

President Barack Obama is expected to announce as soon asthis week his nominee to lead the agency, a position whichrequires Senate confirmation.

Consumer advocates, labor unions and other supporters ofthe agency are concerned that a months-long delay will be asetback in establishing the authority of the Consumer FinancialProtection Bureau over consumer lending practices, includingmortgages and credit cards.

"From our point of view, a delay into next year inappointing leadership would be a serious problem," said TravisPlunkett, legislative director of the Consumer Federation ofAmerica. "It would call the need for the agency intoquestion."

Supporters of the agency say a leaderless agency will havea tough time attracting top talent, setting its agenda, andestablishing itself as a regulatory force as the governmentmoves quickly to implement the financial regulatory overhaullaw enacted in July.

"We really need to get a running start on protecting peoplefrom the big banks and Wall Street," said Stephen Lerner of theService Employees International Union.

But a delay is a problem advocates will likely have to faceand opponents of the bureau say its supporters' concerns arevalid.

"I just think the agency is going to get off to verysluggish start, which doesn't pain me particularly, I'm not afan of that thing," said Bert Ely, a banking consultant inAlexandria, Virginia.

In the meantime, work has begun to put the agencytogether.

Under the law, Treasury is charged with getting the bureauup and running until a director is confirmed. A senior Treasuryofficial said that work on all areas related to the bureau,from policy issues, to nuts and bolts bureaucratic decisions,have begun in earnest.

"There is no constraint at all to us pushing ahead on bureaustart-up and consumer protection initiatives in the absence ofa director," the official said.

While Warren may be a hero to many liberals and consumergroups, she has few fans among Republicans or in the bankingworld. But any nominee will almost certainly need 60 votes toget confirmed by the 100-seat Senate due to Republicanopposition to the bureau itself and the need for asupermajority to overcome procedural hurdles.

In addition, Congress, currently led by Democrats, is onlyexpected to be in session for about a month starting Sept. 13before members head home for the November elections.

That leaves little time for the nominee to go through theregular vetting process by the banking committee and thenreceive a vote by the full Senate, especially if delayingtactics are employed, according to congressional aides.

A post election lame-duck session will also be a difficulttime to get the process completed.

That would leave the bureau without a leader entering thenew year.

Alternatively, Obama could use his ability to bypass theSenate and appoint a director before the end of the year whenthe Senate is in recess.

But a recess appointee could only serve for about a year,under congressional rules, instead of a full five-year term.

The bureau has broad authority to regulate a variety ofconsumer financial products and banks and other financialsector players are concerned it will impose rules limiting feesand penalty charges while also making regulatory compliancecosts shoot upward.

Among bureau boosters, concerns are that a leaderlessagency may have to put off making decisions about what areas ofconsumer finance -- such as mortgages, payday lenders andoverdraft issues -- it should focus on first when drafting newrules.

In addition, there is a question of whether a delay inhaving a leader in place will make it difficult to attracttalent for top jobs that will be critical to getting the agencyup and running, including the deputy director and thosefocusing on collecting consumer complaints, unfair lendingpractices, senior citizens and financial literacy.

"They're going to want to know who they are working for,"Plunkett said. (Reporting by Dave Clarke; Editing by Karey Wutkowski and TimDobbyn)

By Jonathan Spicer and Herbert Lash

NEW YORK (Reuters) - U.S. regulators are probingcertain practices around "quote stuffing," where large numbersof rapid-fire stock orders are placed and canceled almostimmediately, Securities and Exchange Commission Chairman MarySchapiro said Tuesday.

"The SEC and other regulators are looking carefully atcertain practices in this area to assess whether they violateexisting rules against fraudulent or other improper behavior,"Schapiro said at the Economic Club of New York.

Regulators were also looking at quote stuffing inconnection with the mysterious May 6 "flash crash," when theDow Jones industrial average dropped dramatically beforequickly recovering.

Schapiro appeared to broaden the already wide array ofissues the SEC is looking at in the wake of the flash crash,including the fact that some firms regularly send more than 90buy or sell orders for every trade they ultimately make.

"Quote stuffing" is not seen as the cause of the dramaticmarket drop, sources have said. A report that may explain theflash crash is expected toward the end of the month, Schapirotold Reuters before delivering the speech.

Regardless, the SEC has introduced a pilot "circuitbreaker" program that pauses trading in a single stock if thatstock is in a free fall. Schapiro said the circuit breakerprogram -- which stops trading for five minutes if a stockfalls more than 10 percent in five minutes -- can be improved.

"Currently, the circuit breakers can be triggered byanomalous trades that may not warrant pausing all trading inthe stock for five minutes," Schapiro said.

Schapiro said the SEC's next steps are likely to include acareful review of a limit-up and limit-down procedure thatwould directly prevent trades outside specified parameters,while allowing trading to continue within those parameters.

A limit-up and limit-down rule, used in U.S. futuresmarkets, is seen as a possible alternative to circuitbreakers.

MARKET STRUCTURE RULES

The SEC has undertaken a review of the structure ofmarkets, which has changed dramatically over the years.Schapiro said many investors have complained to the SEC aboutU.S. market structure. "We must listen closely," she said.

Quote stuffing is a term coined by Nanex LLC, a tradedatabase developer that issued a study suggesting computeralgorithms did this to gain an edge during the May 6 crash. Thestudy argued that high-frequency traders regularly flood themarketplace with bogus orders to distract rival trading firms.

Investors could make trades under the false impression thatthose orders were legitimate, only to see liquidity disappearand the market move against them when the orders are canceled-- all in the blink of an eye.

The SEC is looking at the rules for high-frequency tradersand anonymous trading venues known as dark pools. The flashcrash threw the the rapid trading industry in the spotlight,triggering some lawmakers to call on the SEC to rein in thepractice.

On Tuesday, New York Senator Charles Schumer urged the SECto consider new rules to slow the rapid trades when the marketis volatile. Schumer, who sits on a committee that oversees theSEC, said the regulator should consider imposing a minimumquote duration so orders cannot be sent and canceled in afraction of a second.

Schumer has inserted himself in other market structureissues and last year called on the SEC to ban flash orders,which give advance knowledge of stock orders to some traders.

The SEC has since proposed a ban on the flash orders. Theagency has also proposed ways to shed light on dark pools.

Schapiro said the SEC continues to look at the full rangeof issues, including market fragmentation and market makers.

The SEC is trying to adopt the rules before they are forcedto craft about 100 rules under the Dodd-Frank financialregulation bill.

Schapiro did not provide a timeline for the marketstructure rules. (Reporting by Jonathan Spicer, Herbert Lash and RachelleYounglai; Writing by Rachelle Younglai; Editing by Tim Dobbynand Maureen Bavdek)

WASHINGTON (Reuters) - The U.S. Treasury DepartmentTuesday said it designated an Iranian-owned bank in Germanyas facilitating Iran's efforts to develop nuclear weapons, amove that effectively prevents the firm from doing businesswith international financial institutions.

The European-Iranian Trade Bank AG, called EIH Bank inGermany, has facilitated billions of dollars of transactionswith Iranian banks that the United States and European Unionhave blacklisted for aiding Iran's nuclear or missileprograms.

"EIH has acted as a key financial lifeline for Iran," UnderSecretary for Terrorism and Financial Intelligence Stuart Leveysaid in a statement.

"As international sanctions tighten, Iran will find itincreasingly difficult to find banks like EIH that willcooperate with it," he added.

The move by the Treasury Department will make it illegalfor any U.S. entity to do business with Hamburg-based EIH orwith any firm that does business with the targeted bank. Thateffectively shuts out EIH from transactions with otherfinancial institutions, as even foreign banks have largelyobeyed U.S. sanctions on Iran.

The Treasury said that EIH was the first financialinstitution targeted for facilitating Iran's weapons activitiesunder a new law enacted this year. Under the law's regulations,the United States may impose strict limits on foreign financial institutions' access to the U.S. banking system forfacilitating transactions with an entity already undersanctions for weapons proliferation or support of terrorism.

The U.S. Treasury said that EIH was one of the fewremaining European banks that actively engaged in business withIranian banks. The Treasury said it took the action afterconsulting with the German government, which is also takingsteps to curb EIH. (Reporting by Donna Smith; Editing by Kenneth Barry)

BRUSSELS -(Dow Jones)- Irish Finance Minister Brian Lenihan Tuesday declined to rule out a further restructuring of Anglo Irish Bank's debt after a government guarantee scheme ends later this month.

The government's bill for bailing out Ireland's banks has already hit EUR33 billion euros, or roughly 20% of Ireland's gross domestic product. Concerns about the cost of fixing the banks has weighed on Irish government bond prices in recent weeks, pushing its cost of borrowing higher.

The government is proposing to restructure state-owned Anglo Irish, the most troubled of the banks, either splitting it into "good" and "bad" pieces or winding it down over the next 15 to 20 years.

Under the program that ends this month, the government has guaranteed EUR87 billion of bonds issued by banks.

In a press conference, Lenihan was asked whether the government intends to restructure bonds issued by Anglo Irish in order to lessen the cost of repaying that debt.

"That element of the guarantee will end of course on the 30th of September and again at that stage it's open to the government to review where we go," Lenihan said. "Already there have been debt management exercises in relation to part of that subordinated debt."

In July 2009, Anglo Irish bought back some of its bonds at a steep discount to their face value.

"The bank already engaged in debt liability exercise on subordinated debt that led to a substantial reduction in the value of the debt," Lenihan said.

Lenihan said that it will take time to deal with Anglo Irish Bank.

"Clearly the workout of banking assets always takes time," he said. "You can't have a fire sale of banking assets. Certainly the workout element of any strategic plan will take place over time, where Anglo is concerned."

Lenihan said his government had been "very aggressive" in tackling the nations bank problems, and insisted it would not need outside help to deal with Anglo Irish.

In particular, he said the government won't seek financial help from the European Financial Stability Facility, which was set up by the euro zone to help governments that are having difficulty borrowing in the bond markets.

"I don't anticipate that at all," Lenihan said. "What we anticipate doing is continuing to go to the markets, which remain open for Ireland, and borrow in the ordinary way."

Copyright © 2010 Dow Jones Newswires

By Huw Jones

LONDON, Sept 7 (Reuters) - Central bank and regulatoryofficials agreed tougher new global bank capital rules onTuesday but will keep investors on tenterhooks about the detailsuntil Sunday when formal endorsement is expected.

The Basel Committee ended its meeting with recommendationson how much extra capital banks will have to hold in future toavoid governments having to bail out the sector in the nextcrisis, a source familiar with the process said.

It also agreed arrangements for phasing in higher standardson the quality of capital banks must hold in future.

"The Basel Committee has said they are on track with theirdiscussions but there will be no announcement today," acommittee spokeswoman said without elaborating further.

The recommendations will be put to the Group of Governorsand Heads of Supervision, chaired by European Central BankPresident Jean-Claude Trichet, which meets in the Swiss town ofBasel on Sunday.

Germany had held back from endorsing prior changes to BaselIII, hoping to win concessions on issues such as giving itsstate-backed banks more time to upgrade the quality of a form ofnon-voting bank capital known as "silent participations," widelyused in the country.

However, a German source familiar with the talks said: "Whathas been decided was not a consensus but a paper that most ofthe members said would be a good compromise."

The so-called Basel III reform is the cornerstone of theworld's response to the financial crisis and endorsement byBasel's oversight body will pave the way for the G20 meeting inNovember to give their seal of approval.

Germany's Die Zeit newspaper reported on Monday that a draftof the package showed banks would have to hold Tier 1 capital of9 percent, including a 3 percent so-called "conservationbuffer".

At least 5 percent of Tier 1 would have to be in the form ofpure equity or retained earnings for maximum market shockabsorbency. The current Tier 1 ratio minimum is 4 percent, witha core pure equity minimum of 2 percent.

The leak sparked some skittishness in Europe's stock marketas investors refocused on how much capital banks may need toraise and how this might hit dividend payments.

ONEROUS END

Germany continued to press for more time to implement thechanges so its banks do not have to raise huge amounts ofcapital quickly.

"We want a tightening of the rules ... (but) the financialsector must be in a position to continue to carry out itsbusiness," German Finance Minister Wolfgang Schaeuble said.But Germany gave up trying to win blanket regulatoryrecognition for "silent participations".

"That battle is hopeless," said one source familiar with thetalks, adding that the participations would no longer count ascore capital at joint-stock companies, while savings banks andlandesbanks without a joint-stock corporate structure would needto meet a raft of new requirements to use them.

Analysts and regulators have been expecting the new levelsto come in at around 6 percent for core Tier 1, with aconservation buffer of at least 2 percent.

Any bank that failed to keep above the capital conservationbuffer would have to curb payouts such as bonuses and dividends.

Andrew Lim, an analyst at Matrix Group said the minimumratios outlined in the newspaper leak were at the more onerousend of what the market had been expecting once the additionalbuffers were added.

"This, we believe, is incrementally negative and is one ofthe reasons why the market is weak today," Lim added.

"Our analysis shows that BBVA, HSBC, Intesa Sanpaolo,Unicredit and Barclays would still be at risk of being in theconservation buffer even by year-end 2013," Lim said.

Banking and regulatory sources confirmed the Die Zeitfigures but said it was unclear if the figures were final.

"If the new core minimum is 5 or 6 percent then that looksgood. A majority of European banks would be definitely abovethat level," said Antonio Ramirez of Keefe, Bruyette & Woods.

Analysts said much of the impact would hinge on what qualitycapital banks would be expected to hold in their extra buffers.

The Group of 20 leading countries agreed earlier this yearthat its original end of 2012 deadline should include wiggleroom for countries to have more time to comply. (Additional reporting by Alexander Huebner, Angelika Gruber andJonathan Gould in Frankfurt and Noriyuki Hirata in Tokyo;Editing by Sharon Lindores)

(Refiles, fixes spelling of Cadereyta throughout)

By Gabriela Lopez

CADEREYTA, Mexico (Reuters) - An explosion rippedthrough a major Mexican refinery operated by state oil companyPemex Tuesday, and rescue workers said at leastfive people were seriously injured.

Local media in northern Mexico initially reported thatseven people had died in the explosion at Pemex's Cadereytacomplex. Pemex could not confirm the deaths, and an emergencyservices official told local radio that nobody had beenkilled.

The oil refinery is Mexico's most sophisticated and thecountry's third largest, with a capacity of 275,000 barrels perday. The blast could force Mexico, which already relies onimports for more than 40 percent of domestic gasoline demand,to significantly boost fuel imports. (Graphic:http://link.reuters.com/dew89n )

Firefighters were hosing down the unit where the accidentoccurred, but said the blast did not cause a fire.

"We felt the windows shake. It was only a few seconds, butthe whole building shook," said Jose Luis Garza, a governmentemployee in Juarez, about 20 minutes from the refinery.

U.S. crude oil and RBOB gasoline futures pared lossesslightly after the explosion.

Mexico bought 432,000 barrels a day of fuel from the UnitedStates in June, making it the top importer of U.S. refinedproducts, according to the U.S. government.

"Mexico is already short of refining capacity and this willmake it even shorter," said Antoine Halff, deputy head ofresearch at Newedge Group in New York. "It could well raise oilproduct prices as Mexico needs to increase imports."

The blast comes in a year marred by serious accidents inthe North American oil industry, including the months-longDeepwater Horizon spill, a major pipeline accident in Michiganand an explosion at a Gulf of Mexico natural gas platform.

Guillermo de Leon, head of civil protection forces inCadereyta said five people had been seriously injured inTuesday's explosion.

Francisco Montano, a Pemex spokesman in Mexico City, saidhe was unable to confirm whether anyone had been killed. Alocal emergency services official told Mexican radio that therewere no deaths.

Montano said the blast took place in one of the Cadereytarefinery's hydrotreating units, which removes sulfur from fuelsunder high pressure in the presence of explosive hydrogen gas.

Mexico, the world's seventh largest oil producer, mustimport fuel due to a lack of refining capacity.

A Gulf Coast products trader said it was "hard to gauge"whether Pemex would pull more U.S. exports in the aftermath ofthe explosion. "Pemex already moves a lot of cargoes off theGulf Coast," the trader said.

Pemex, struggling under a mountain of debt and rapidlyaging oil fields, is studying a plan to import crude oil forthe first time in over three decades to improve theprofitability of its refineries. (Additional reporting by Robert Campbell, Cyntia BarreraDiaz, Miguel Angel Gutierrez and Catherine Bremer in MexicoCity and David Sheppard and Joshua Schneyer in New York,Kristen Hays in Houston; Editing by Kieran Murray)

LONDON -(Dow Jones)- Final bids for Dutch retailer Maxeda BV's department store V&D and restaurant chain La Place are due by the end of this week, a person familiar with the situation told Dow Jones Newswires Tuesday.

Maxeda, which is owned by a buyout group including Kohlberg Kravis Roberts & Co, Cinven Group, Permira and AlpInvest Partners, kicked off an auction for its V&D department store some months ago.

The sale process, which is being run by ING NV (ING) and JPMorgan Chase (JPM), attracted around eight bidders in its early stages. Maxeda then selected three potential buyers to submit fully financed bids.

European private equity firms H2 Equity Partners and Merchant Equity Partners, both turnaround specialists, are among the bidders, people have previously told Dow Jones Newswires.

Maxeda was bought by the private equity consortium for EUR2.52 billion in June 2004 and its owners had originally planned to hang onto the company, which also comprises a home improvement business, for two to three years before selling it or floating it. However, it decided on a sale of its fashion business after it received several expressions of interest from potential buyers earlier this year.

The sale of V&D, which made a profit in the fiscal year 2009/2010 for the first time in several years, will likely be followed by separate sales of Maxeda's other fashion formats such as lingerie chain Hunkemoller and luxury fashion store De Bijenkorf.

At the end of August, Maxeda reported an 18.3% rise in first half operating profit to EUR118 million, driven by its fashion activities, while net sales rose 1.6% to EUR1.57 billion.

At the time, Maxeda's Chief Executive Tony DeNunzio said its department store V&D and restaurant chain La Place had the strongest profit growth, followed by lingerie chain Hunkemoller.

The company has said it will continue to run its home improvement stores which include Praxis, Formido and Brico.

A spokeswoman for Maxeda declined to comment Tuesday.

(Anna Marij van der Meulen in Amsterdam contributed to thsi report.)

Copyright © 2010 Dow Jones Newswires

LONDON -(Dow Jones)- Man Group PLC (EMG.LN) Tuesday said the net asset value of AHL Diversified Futures Ltd. at the close of business Monday was down 2.56% on the week at $36.92.

In the last 12 months, it is up 2.1%.

It uses quantitative models to exploit price trends in a variety of markets, including stocks, bonds and commodities.

Across all of its funds, Man Group had some $38.5 billion in funds under management at June 30.

-Shares closed at 225.70 pence.

Copyright © 2010 Dow Jones Newswires

As controversy continues to swirl over his bank’s accounting practices, Vikram Pandit, the normally reticent CEO of Citigroup (NYSE:C), will be hosting a lunch today with major investors of the big bank, FOX Business Network has learned.

Pandit has taken heat for his low profile as Citi’s stock hovers below $5 a share, but this afternoon, he and Citigroup CFO John Gerspach are meeting with about two dozen “institutional clients” of research firm Sanford C. Bernstein for a lunch at the bank’s headquarters in Manhattan. The meeting was set up by Bernstein bank analyst John McDonald.

A spokesman for Citi described the meeting as “private and routine,” and one that was previously scheduled. It comes, however, as the bank has been engaged in an increasingly nasty war with CSLA analyst Mike Mayo, who has issued reports questioning the bank's accounting for tax credits known as “deferred tax assets,” or DTAs.

Since the financial crisis began in 2007, Citigroup has lost tens of billions of dollars and needed a massive government bailout to survive. On paper at least, the bank is now marginally profitable. However, Mayo believes Citi has improperly inflated the value of its DTAs by as much as $10 billion, which, if Mayo is right, would produce massive losses for the bank and eat into its capital levels.

Citi believes its accounting for DTAs is accurate, and has barred Mayo from speaking with senior executives including Pandit and its CFO for nearly two years. Mayo’s criticism of the bank has gone beyond its accounting; late last week, he issued a note ranking banking sector CEOs according to stock performance. Pandit was listed in last place even as Citi recently alerted Mayo that it will schedule a meeting between he and bank executives sometime this month. (The bank won’t say if Mayo will be meeting either Pandit or Gerspach, as is usually the case during such events.)

Pandit has received criticism from investors and analysts for taking an unusually low profile for the CEO of one of the world’s largest banks. He has shunned interviews with most media outlets and rarely speaks in public. However, with the exception of Mayo, he has sat down with investors and analysts in private, as he is scheduled to do today.

Both Pandit and Gerspach are expected to be asked many of the same questions Mayo has posed about the firm’s accounting for DTAs. So far, Wall Street analysts are somewhat split over the firm’s accounting; some like Richard Bove are supporting the bank’s treatment of its DTAs.(Bove, however, has been critical of Citigroup’s decision to blackball Mayo for nearly two years).

But others, like former Securities and Exchange Commission accounting chief Lynn Turner, are questioning the bank’s DTA accounting, saying that a write-down of losses may be in order.

As first reported by FOX Business, the SEC has inquired at least twice about Citigroup’s accounting for DTAs over the past 18 months; it’s unclear if the SEC has broadened its inquiry amid the latest controversy.

A Citi spokesman says the bank has no knowledge of whether the SEC has expanded its examination of the firm’s DTA accounting.

By Harpreet Bhal

LONDON, Sept 7 (Reuters) - European shares fell on Tuesday,stubbing out a two-week rally, with banks hit by concerns overthe sector's health and the impact of capital reform, whileminers dropped on renewed jitters over Australia's tax plan.

The pan-European FTSEurofirst 300 index of top shares closed0.4 percent lower at 1,061.79 points, after gaining almost 7percent over the past two weeks.

The Euro STOXX 50, the euro zone's blue chip index, was down1 percent at 2,727.16 points, dropping back below its 50 percentFibonacci retracement of a fall from an April high to a May low.

Banks were pressured by a report in the Wall Street Journal,which said recent stress tests in the European banking sectorunderstated some lenders' holdings of potentially riskygovernment debt.

Among the fallers, Societe Generale, Dexia and Deutsche Bank fell 1.7 to 3.9 percent.

Adding to the concerns, Germany's Die Zeit newspaper,quoting a draft proposal from the Basel committee, reported thatglobal banks would be required to hold Tier 1 capital of 9percent, including a 3 percent so-called "conservation buffer".

The Basel committee, in charge of drawing up global bankingrules, agreed tougher new capital rules on Tuesday but will keepinvestors on tenterhooks until Sunday when formal endorsement isexpected.

"Nobody really knows yet how these reforms will affect thebanking sector and that is making the market quite nervous,"said Oliver Roth, head trader at Close Brothers Seydler Bank inFrankfurt.

Barclays fell 2.7 percent. The bank said Bob Diamond, headof its investment and wealth management business, would succeedJohn Varley as group chief executive.

In the mining sector, Xstrata, BHP Billiton and Rio Tinto were off 1.4 to 1.8 percent, after Australian Prime MinisterJulia Gillard secured a second term in office, with hergovernment vowing to press ahead with a new mining tax.

MACRO HEADWINDS

Investors were also rattled by poor macroeconomic data fromGermany, and a weak outlook for U.S. employment.

German manufacturing orders in July unexpectedly fell 2.2percent, their steepest rate in more than a year, dragged bybelow-average volume in big orders.

In the United States, the Conference Board's EmploymentTrend's Index declined in August, signaling that employmentgrowth may continue to slow in the coming months. "Therestill is some doubt about economic growth in the second half,"said Koen De Leus, economist at KBC Securities. "We have justhad a relief rally and investors are waiting to see whatdirection the economy is going to take in the second half."

Bucking the weak trend, Invensys climbed 7.4 percent, withtraders citing a newspaper report that the engineering group isa takeover target. An Invensys spokesman declined to comment.

Nokia added 4.5 percent, and touched its highest level in 12weeks, after Morgan Stanley upgraded its recommendation on thestock to "overweight" and raised earnings forecasts for theworld's top cellphone maker.

Across Europe, Britain's FTSE 100, Germany's DAX andFrance's CAC were 0.6 to 1.1 percent lower. (Additional reporting by Joanne Frearson; Editing by SharonLindores)

Court-appointed investigator Joshua Hochberg Tuesday asked a bankruptcy judge to give him until Nov. 1 to wrap up his probe of the proposed settlement of legal disputes arising out of the largest banking collapse in U.S. history--that of Washington Mutual Bank, or WaMu.

Hochberg has not yet reached conclusions about the settlement, which forms the underpinning of the proposed Chapter 11 plan of WaMu's former parent, Washington Mutual Inc. (WAMUQ), according to papers filed with the U.S. Bankruptcy Court in Wilmington, Del.

Hochberg, an attorney with McKenna Long & Aldridge and former Department of Justice fraud investigator, is expected to issue a report that will indicate whether Washington Mutual's proposed settlement of a variety of legal actions is a fair deal for creditors owed an estimated $8 billion.

He is due to go before Judge Mary F. Walrath of the U.S. Bankruptcy Court in Wilmington, Del., Monday afternoon to talk about his preliminary report and seek an extension of time to complete it.

Filed with the court, the preliminary report outlines the ongoing investigation of the roots of WaMu's collapse, and the aftermath, including an agreement to split up tax refunds of $5.5 billion to $5.8 billion.

The proposed pact is with J.P. Morgan Chase & Co. (JPM), which bought WaMu after it was seized by regulators, and with the Federal Deposit Insurance Corp., which brokered the sale.

If Hochberg concludes the settlement is fair and the Chapter 11 plan is approved, Washington Mutual's top-ranking creditors will have $7 billion to share, meaning windfall profits for those who bought the debt for pennies on the dollar soon after the loss of WaMu sent its former parent into Chapter 11 bankruptcy.

Shareholders and holders of trust-preferred securities issued by WaMu's former parent oppose the settlement, claiming it's designed to compensate top-ranking creditors while covering up serious flaws with the handling of the ailing thrift.

Stuffed with risky home loans, WaMu was taken over in September 2008 by regulators who feared it was on the brink of collapse and a threat to the stability of the U.S. financial system. Hearings before a Senate panel, however, have revealed that not all regulators believed WaMu was in such bad shape that it needed to be seized.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)

("=Investigator Targets Nov 1 Release For Findings On WaMu Pact," at 11:52 a.m. EDT, misstated the day the investigator is due in court in the fourth paragraph. The correct version follows:)

Court-appointed investigator Joshua Hochberg Tuesday asked a bankruptcy judge to give him until Nov. 1 to wrap up his probe of the proposed settlement of legal disputes arising out of the largest banking collapse in U.S. history--that of Washington Mutual Bank, or WaMu.

Hochberg has not yet reached conclusions about the settlement, which forms the underpinning of the proposed Chapter 11 plan of WaMu's former parent, Washington Mutual Inc. (WAMUQ), according to papers filed with the U.S. Bankruptcy Court in Wilmington, Del.

Hochberg, an attorney with McKenna Long & Aldridge and former Department of Justice fraud investigator, is expected to issue a report that will indicate whether Washington Mutual's proposed settlement of a variety of legal actions is a fair deal for creditors owed an estimated $8 billion.

He is due to go before Judge Mary F. Walrath of the U.S. Bankruptcy Court in Wilmington, Del., Tuesday afternoon to talk about his preliminary report and seek an extension of time to complete it.

Filed with the court, the preliminary report outlines the ongoing investigation of the roots of WaMu's collapse, and the aftermath, including an agreement to split up tax refunds of $5.5 billion to $5.8 billion.

The proposed pact is with J.P. Morgan Chase & Co. (JPM), which bought WaMu after it was seized by regulators, and with the Federal Deposit Insurance Corp., which brokered the sale.

If Hochberg concludes the settlement is fair and the Chapter 11 plan is approved, Washington Mutual's top-ranking creditors will have $7 billion to share, meaning windfall profits for those who bought the debt for pennies on the dollar soon after the loss of WaMu sent its former parent into Chapter 11 bankruptcy.

Shareholders and holders of trust-preferred securities issued by WaMu's former parent oppose the settlement, claiming it's designed to compensate top-ranking creditors while covering up serious flaws with the handling of the ailing thrift.

Stuffed with risky home loans, WaMu was taken over in September 2008 by regulators who feared it was on the brink of collapse and a threat to the stability of the U.S. financial system. Hearings before a Senate panel, however, have revealed that not all regulators believed WaMu was in such bad shape that it needed to be seized.

Copyright © 2010 Dow Jones Newswires

Court-appointed investigator Joshua Hochberg Tuesday asked a bankruptcy judge to give him until Nov. 1 to wrap up his probe of the proposed settlement of legal disputes arising out of the largest banking collapse in U.S. history--that of Washington Mutual Bank, or WaMu.

Hochberg has not yet reached conclusions about the settlement, which forms the underpinning of the proposed Chapter 11 plan of WaMu's former parent, Washington Mutual Inc. (WAMUQ), according to papers filed with the U.S. Bankruptcy Court in Wilmington, Del.

Hochberg, an attorney with McKenna Long & Aldridge and former Department of Justice fraud investigator, is expected to issue a report that will indicate whether Washington Mutual's proposed settlement of a variety of legal actions is a fair deal for creditors owed an estimated $8 billion.

He is due to go before Judge Mary F. Walrath of the U.S. Bankruptcy Court in Wilmington, Del., Tuesday afternoon to talk about his preliminary report and seek an extension of time to complete it.

Filed with the court, the preliminary report outlines the ongoing investigation of the roots of WaMu's collapse, and the aftermath, including an agreement to split up tax refunds of $5.5 billion to $5.8 billion.

The proposed pact is with J.P. Morgan Chase & Co. (JPM), which bought WaMu after it was seized by regulators, and with the Federal Deposit Insurance Corp., which brokered the sale.

J.P. Morgan is answering questions about its role in WaMu's demise, as Hochberg looks into allegations "that [J.P. Morgan] misappropriated [Washington Mutual and WaMu] confidential information, learned from the FDIC that a seizure of [WaMu] was likely, and discouraged other bidders so as to acquire WMB's assets at an unreasonably low price," court documents say.

WaMu was sold to J.P. Morgan for $1.9 billion, months after Washington Mutual rebuffed an earlier offer from J.P. Morgan to buy the thrift for much more.

Besides the allegations against J.P. Morgan, Hochberg said, he is looking at defenses that WaMu's new owner might be able to use to shield itself from damage claims. If market conditions or the Office of Thrift Supervision are really to blame for bringing the thrift to its knees, J.P. Morgan could escape liability, the preliminary report said.

The FDIC will gain some cash from the settlement--a share of tax refunds. It will also get out from under the threat of lawsuits from Washington Mutual creditors if the settlement is approved.

Critics of the WaMu sale have accused regulators of hurting WaMu's chances of survival by prematurely telling J.P. Morgan and others the thrift was a takeover candidate. Hochberg is looking into those allegations, as well as claims that the bidding process was rigged in J.P. Morgan's favor.

If Hochberg concludes the settlement is fair and the Chapter 11 plan is approved, Washington Mutual's top-ranking creditors will have $7 billion to share, meaning windfall profits for those who bought the debt for pennies on the dollar soon after the loss of WaMu sent its former parent into Chapter 11 bankruptcy.

Shareholders and holders of trust-preferred securities issued by WaMu's former parent oppose the settlement, claiming it's designed to compensate top-ranking creditors while covering up serious flaws with the handling of the ailing thrift.

Stuffed with risky home loans, WaMu was taken over in September 2008 by regulators who feared it was on the brink of collapse and a threat to the stability of the U.S. financial system. Hearings before a Senate panel, however, have revealed that not all regulators believed WaMu was in such bad shape that it needed to be seized.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)

Copyright © 2010 Dow Jones Newswires

By Jonathan Spicer and Herbert Lash

NEW YORK (Reuters) - U.S. regulators are probingcertain practices around "quote stuffing," where large numbersof rapid-fire stock orders are placed and canceled almostimmediately, Securities and Exchange Commission Chairman MarySchapiro said Tuesday.

"The SEC and other regulators are looking carefully atcertain practices in this area to assess whether they violateexisting rules against fraudulent or other improper behavior,"Schapiro said in remarks to be delivered at the Economic Clubof New York.

Regulators were also looking at quote stuffing inconnection with the mysterious May 6 flash crash, when the DowJones industrial average dropped dramatically before quicklyrecovering.

However, it is not seen as the cause of the dramatic marketdrop, sources have said. A report that may explain the flashcrash is expected toward the end of the month, Schapiro toldReuters before delivering the speech.

Regardless, the SEC has introduced a pilot "circuitbreaker" program that pauses trading in a single stock if thatstock is in free fall. Schapiro said the circuit breakerprogram -- which stops trading for 5 minutes if a stock fallsmore than 10 percent in 5 minutes -- can be improved.

"Currently, the circuit breakers can be triggered byanomalous trades that may not warrant pausing all trading inthe stock for 5 minutes," Schapiro said in her preparedremarks.

Schapiro said the SEC's next steps are likely to include acareful review of a limit-up and limit-down procedure thatwould directly prevent trades outside specified parameters,while allowing trading to continue within those parameters.

A limit-up and limit-down rule, used in U.S. futuresmarkets, is seen as a possible alternative to circuitbreakers.

MARKET STRUCTURE RULES

The SEC has undertaken a review of the structure of theequity markets, which has changed dramatically in the past fewdecades.

Quote stuffing is a term coined by Nanex LLC, a tradedatabase developer that issued a study suggesting computeralgorithms did this to gain an edge during the May 6 crash. Thestudy argued that high-frequency traders regularly flood themarketplace with bogus orders in order to distract rivaltrading firms.

Investors could make trades under the false impression thatthose orders were legitimate, only to see liquidity disappearand the market move against them when the orders are canceled-- all in the blink of an eye.

The SEC is looking at the rules for high-frequency tradersand anonymous trading venues known as dark pools. The flashcrash threw the the rapid trading industry in the spotlight,triggering some lawmakers to call on the SEC to rein in thepractice.

So far, the SEC has proposed to ban so-called flash orders,which give advance knowledge of stock orders to some traders.

The agency has also proposed ways to shed light on darkpools. The SEC is trying to adopt the rules before they areforced to craft nearly 100 rules under the Dodd-Frank financialregulation bill.

Schapiro did not provide a timeline for the marketstructure rules.

The Dodd-Frank legislation gives the SEC new authority toregulate the trillion dollar over-the-counter derivativesmarket and new powers to oversee hedge fund advisers. (Reporting by Jonathan Spicer, Herbert Lash and RachelleYounglai; Editing by Tim Dobbyn)

DUBLIN -(Dow Jones)- Irish Minister for Finance Brian Lenihan said Tuesday that the state will guarantee short-term bank liabilities to year-end from its current expiry date of Sept. 29.

This includes corporate and interbank deposits, as well as debt securities.

He said it is an important support to the Irish banking system, facilitating their access to both short- and longer-term funding to help maintain the overall stability of the banking sector.

An approval by the European Commission under state aid rules needs to be secured before the guarantee can be extended. Lenihan was in Brussels Monday and Tuesday, and held discussions with European Competition Commissioner Joaquin Almunia about the future of nationalized Anglo Irish Bank Corp. and the bank guarantee.

"I am very grateful for the assistance of Commissioner Almunia and his officials in the European Commission for their open engagement and cooperation on this important issue for Ireland," Lenihan said. "And I look forward to continued strong cooperation in resolving this and other significant issues for the Irish banking system in the coming weeks."

Lenihan reiterated that this announcement doesn't affect retail deposits of up to EUR100,000 as these deposits continue to be guaranteed under the ordinary deposit guarantee scheme and that scheme isn't time-limited.

Copyright © 2010 Dow Jones Newswires

NEW YORK -(Dow Jones)- Canadian Imperial Bank of Commerce's (CM) $1.5 billion three-year note has launched, according to a person familiar with the matter.

The bond, due to price later Tuesday, launched at 75 basis points over Treasurys.

The bond, rated Aa2/A+/AA-, is jointly led by Barclays Capital, Citigroup Inc., JP Morgan Chase & Co. and CIBC.

Proceeds will be used for general corporate purposes, as per the term sheet.

Also Tuesday, France Telecom's $750 million five-year note has launched, according to a person familair with the matter.

The bond, rated A3/A-/A-, and joint led by Citigroup, HSBC and Morgan Stanley, has launched at 82 basis points over comparable Treasurys.

These bonds are among a flood of new bonds in the investment-grade corporate bond market. So far on Tuesday alone, bonds valued at over $8 billion have been issued. This exceeds the total volume issued in September last year, when bonds worth $5.35 billion were sold, according to data provider Dealogic.

The heightened issuance is a result of low interest rates and investor appetite for high-quality bonds as they put their money to work.

Among the issuers are Aon Corp. (AON), International CCS and Home Depot (HD) with $1 billion notes each, Dell Inc. (DELL) with a $1.5 billion bond, Hospira Inc. (HSP) with a $500 million 30-year bond and Burlington Northern Santa Fe (BNI) with a $500 million note.

Dell's $1.5 billion three-part note has maturities of three, five and 30 years. Joint leads on the deal are Barclays Capital, Goldman Sachs and Morgan Stanley.

The use of proceeds is listed as general corporate purposes and the bond is expected to price on Tuesday.

MetroPCS Wireless, Inc., an indirect wholly owned subsidiary of MetroPCS Communications, Inc. (PCS) is in the market with a $500 million registered senior note due 2018.

The joint bookrunning managers are J.P. Morgan Securities LLC, Barclays Capital and Deutsche Bank Securities Inc., and the co-manager is Wells Fargo Securities, LLC.

Burlington Northern Santa Fe (BNI) is in the market with a $500 million two-part note.

Health Care Reit, Inc. (HCN), is also in the market with a $400 million 7-year note, according to a term sheet. Joint leads on the note, rated Baa2/BBB-/BBB, are Barclays, JP Morgan Chase & Co. and UBS.

Copyright © 2010 Dow Jones Newswires