Bank of America gets more help
The government has extended a new multibillion-dollar lifeline to one of the country’s biggest banks as officials continue to struggle with a serious crisis in the financial system.
After a marathon negotiating session, the Bush administration agreed early Friday to provide Bank of America with an additional $20 billion in support from the government’s $700 billion financial rescue fund. Bank of America agreed to pay a dividend on the cash injection and will accept more restrictions on executive pay.
The administration, Federal Reserve and Federal Deposit Insurance Corp. also agreed to participate in a program to provide guarantees against losses on approximately $118 billion in various types of loans and securities backed by real estate loans.
Only hours after the announcement of the government lifeline, Bank of America on Friday reported a fourth-quarter loss of $2.39 billion.
Washington
Chrysler to use loan for car deals
The Treasury Department said Friday it will provide a $1.5 billion loan to Chrysler LLC’s financing arm, and the automaker announced it will immediately use the money to offer zero-percent financing on several models and expand lending to car buyers with less than ideal credit.
The Treasury said the new aid is in addition to the $17.4 billion in loans earmarked for Chrysler and General Motors Corp. last month in an effort to buy time for the two companies to reorganize and ultimately return the domestic auto industry to profitability.
Chrysler Vice Chairman and President Jim Press said the new loan will allow Chrysler Financial to provide more customers with affordable financing, including those with credit scores around 620.
Chrysler’s zero-percent offer covers a variety of 2008 and 2009 models including the Chrysler Town & Country, 300 and 300C; Jeep Grand Cherokee, Commander and Wrangler; and Dodge Grand Caravan, Charger, Magnum, Challenger, Ram Pickup and Ram Heavy Duty.
Carson City, Nev.
Casinos’ earnings take a big hit
A new report shows Nevada’s major hotel-casinos had a large drop in net income in fiscal 2008 as a global economic downturn worsened, hanging onto $721.2 million or a third of what they netted in the previous year.
The report released Friday by the state Gaming Control Board showed the 266 resorts grossed $25 billion but were hammered by increasing expenses during the fiscal year ending last June 30. The net income is just 2.9 percent of the gross, down from 9.1 percent in fiscal 2007.
While payroll totals were down slightly in fiscal 2008, there were big jumps in interest expenses and in a catchall “other” category that includes various legal expenses, insurance premiums and other items.