Hartford Courant from Hartford, Connecticut • 177

2iaf fotb goufunt 1 1 I SECTION THURSDAY AUGUST 10, 1989 C7-11 CLASSIFIED mm BUSINESS XJ. f. i legislate thrift bailout A A "vf 1 ft mm lit 'i Associated Press WASHINGTON President Bush, saying, "I'm proud to sign this monster," Wednesday put his signature on a $159 billion rescue package for the savings and loan industry. With the ink barely dry on the 371-page rewrite of federal banking laws, his administration began putting the plan into effect, approving the first $815 million installment for cleaning up the na-' tion's most heavily indebted savings and loans. "The bill is not perfect, but it is a first step, a crucial first step toward restoring public confidence," Bush said at a Rose Garden ceremony attended by the chief architects of the legislation.

Bush said the overhaul the government's biggest-ever industry bailout will help "ensure that not one dollar of insured funds will be lost by any depositor." The legislation, a lightly modi-, fied version of the rescue plan Bush first submitted to Congress on Feb. 6, authorizes $50 billion in new government borrowing over the next 26 months to clean up ailing in part by buying up high-rate certificates of deposit issued by the shaky thrifts to attract capital. The measure requires owners, within three months, to have $1.50 in tangible capital for every $100 in lending as a cushion between future losses and government insurance funds. By 1995, the standard will rise to $3 for each $100 in loans. The overhaul also toughens criminal penalties for fraud and triggers the most sweeping over- haul of the banking regulation in 50 years.

7 The overhaul includes a dismantling of the primary regula- tory agency, the Federal Home Loan Bank Board. Federal deposit insurance for will be provided by a new insurance fund, the Savings Association Insurance Funds, or SAIF, pronounced "safe." Shortly after Bush signed the bill, Treasury Secretary Nicholas Brady convened a meeting of the new Resolution Trust Corp. Oversight Board, set up by the legislation to sell off problem loans and repossessed real estate the 'gov-' ernment is inheriting from the failed thrifts. The board' voted to spend $815 million as the first installment in shutting down or merging with the highest negative net worths, including $215 million for dealing with three yet-to-be-identified insititutions Thursday. The government, which has already closed 223 is authorized under the legislation to shut down as many as 500 more of the nation's nearly 3,000 institutions over three years.

It is to spend $20 billion over the next seven weeks alone on the problem. Latest administration estimates put the total cost of the bailout at $159 billion through 1999. Bush said the legislation, which received final congressional approval Saturday, "says to tens of millions of savings and loan depositors: you will not be the victims of others' mistakes." The Financial Institutions Reform, Recovery and Enforcement Act of 1989, nearly a foot thick, was resting on a table awaiting Bush's signature. "Thank you all very much and, now, I'm proud to sign this monster." Among the 300 or so people at the ceremony were Treasury Secretary Brady, Housing and Urban Development Secretary Jack Kemp and key Capitol Hill backers of the legislation, including Sen. Donald W.

Riegle Jr, and 'Rep. Henry B. Gonzalez, D-Texas, 'chairmen of the congressional banking committees. Riegle later told reporters, "The bill deals with every major problem we were able to identify." He Please see Thrift, Page C2 Associated Press President Bush present a pen to U.S. Rep.

Chalmers P. Wylie, R- Nicholas F. Brady, Sen. Donald W. Riegle Sen.

Phil Ohio, right, after signing historic legislation to bail out the savings Gramm, R-Texas, White House budget Director Richard G. Darman and loan industry. Also shown, are, from left, Treasury Secretary and U.S. Rep. Henry B.

Gonzalez, D-Texas. Problems still cloud industry's prospects Associated Press WASHINGTON The savings and loan industry will emerge leaner and more closely replated, but perhaps no better able to make a profit, as a result of legislation signed Wednesday by President Bush, analysts say. The bill, enacted six months after Bush first called for emergency action to solve a crisis inherited from the Reagan administration, is expected to profoundly alter and probably drastically shrink a business that has enjoyed a privileged position in the nation's financial system for more than 50 years. Savings and loans, because they financed the American dream of home ownership, have been permitted to operate under accounting standards and capital requirements much more lax than those applied to commercial banks. No longer.

In 120 days, thrift owners will be required to back every $100 in lending with $1.50 in tangible capital, which will act as a cushion between future losses and government insurance funds. By 1995, the standard will reach $3. An estimated 77 percent of the nation's 2,946 meet the 1.5 percent standard and thirds already satisfy the 3 percent requirement that is more than five years away, according to Sheshunoff a consulting firm in Austin, Texas. Those that cannot measure up face takeover by government regulators or merger with bigger and stronger institutions. Because the legislation for the first time permits banks to buy solvent even prosperous institutions could be quickly scooped up by large holding companies anxious to expand their retail branch network.

The bill makes it easier for banks to integrate thrifts into their operations. "In five years, I expect there'll be less than a thousand thrifts," said Bert Ely, a financial institutions analyst in Alexandria, Va. "Five hundred to 1,000 thrifts will be shut down by the government. The rest will go because banks will seek to acquire them, and they will seek to be acquired. It will be a two-way street." The prospects for thrifts that remain after the shakeout are mixed.

Optimists point out that the bill, by eliminating ailing that bid up interest rates on deposits, will make it less expensive for healthy institutions to raise mon- Please see Prospects, Page C2 Weather service grows out of investment in high-tech forecasting proved what a local forecasting operation was capable of even on a modest budget and equipment level." Chase believes that his investment in state-of-the-art tools and independent weather information-gathering ability will provide him with superior forecasts. "The speed and the accuracy is untouchable," said Chase. But his competitors aren't so convinced. "Their instrumentation is state- and state and local governments and agencies. Chase declined to name clients that might use the service but said he is negotiating with three potential buyers.

The service, however, has been promoted as part of the Channel 61 newscast since July 10, and WTIC radio confirmed this week that it will drop Accu-Weather Inc. of State College, in favor of its own New England Weather Service. Whether the new service will be welcome news to anyone outside of WTIC television and radio, however, is yet to be determined. Chase said the WTIC television and radio stations will be the company's only broadcast clients. The state's best-known and most respected weather service, the Travelers Weather Service, closed in 1984 after three decades of operation.

That company. Chase said, "served as an inspiration to me in that it of-the-art and as such it should be delivering as precise a weather picture as can be had, but I don't think it necessarily follows that that provides a better forecast," said Mel Goldstein, director of the Weather Center at Western Connecticut State University in Danbury. Goldstein's forecasts appear in several newspapers, including The Courant, and on eight radio stations in the state. Goldstein is also the weekend weather anchor at WTNH-TV (Channel 8) Chase firm to buy out-of-state radio, TV stations By JAMES ENDRST Courant TV Writer The worse the weather gets, the happier WTIC-TV (Channel 61) owner Arnold Chase is likely to be. Chase has invested close to $1 million in high-tech weather gear over the past year for his station's "WTIC News at 10," which debuted in April and which has blossomed into the New England Weather Service, a private, 24-hour weather service Chase said this week will begin oper-' ation in September.

Chase, co-chairman of Chase Communications which owns Channel 61 and WTIC-AM and FM radio, said that the new business, located alongside Channel 61's newsroom, will employ six full-time and two part-time meteorologists. Roger Griswold, weather anchor for "WTIC News at 10," has been named the company's director, though Chase said the weather service will be a separate corporate entity. The New England Weather Service, said Chase, will be "highly client-specific. We are able to offer everything from traditional forecast updates to continuous weather monitoring." Potential clients for the service include utility companies in New Haven. The former director at Travelers, Charlie Bagley, who now works for WRCH-FM and WNEZ-AM, predicts flatly that the New England Weather Service "will not be a profit-making He's going to be competing against people who have been in it for years and years," said Bagley, mentioning such out-of-state companies as Accu-Weather and Weather Services Corp.

of Bedford, Mass. George Stamos, vice president of marketing at Weather said, "There's a lot of business out-there, and I guess the name of the game is service." Chase said that "weather services in general are not big moneymak4 but added that "what the; weather service will do for tjhe; broadcast facilities alone makes the-whole operation worthwhile." The move, Chase has much to do with the promotional; possibilities it offers WTIC and his personal fascination with futuristic! technology. Ever since the April debut of the; station's half-hour weeknight news-t at 10, Channel 61 has promoted its high-tech weather1: i Please see Weather, Page! C2 Communications of Providence. Chase Communications owns and operates several broadcast properties, including WTIC-AM and FM' radio and WTIC-TV (Channel 61) in Hartford. Chase Enterprises and Chase Communications are owned by David T.

Chase and his family. David Henderson, chairman of -Outlet Communications said the sale of the stations to Chase Communications is part of a plan developed by First Boston an investment banking firm. "We've just been carrying a very By STEPHEN M. WILLIAMS Courant Staff Writer Chase Communications in an effort to expand its broadcasting business, said Wednesday that it has agreed to buy two televison stations and two radio stations for $120 million in cash from a Providence company. Chase Communications, an affiliate of Hartford-based Chase Enterprises has agreed to buy television stations in Atlanta and Indianapolis, and two radio stations in Washington, D.C., from Outlet heavy debt load," Henderson said.

"With the proceeds of the sale we will substantially reduce our debt" Roger M. Freedman, Chase Communications co-chairman and chief executive officer, said, "We have a commitment to expand our broadcast operations in a very substantial way." That expansion is part of a long-range plan, he said. Broadcasting "has been very prof-. itable for us," Freedman said. ''As a family business, we have an opportunity to select business that we enjoy being involved with." He said that market conditions, such as the current nationwide slowdown in advertising, have made the price of broadcast properties more attractive.

"The business has been through a lot of upheaval and the prices are depressed," Freedman said. "It is a good time to buy." The two independent television stations, WATL-TV in Atlanta and WXIN-TV in Indianapolis, are both ranked about fourth or fifth in their markets. Please see Chase, Page C2 1 Dow slips United Airlines expected to reject offer U.S. dollar falls 13.09 feu The Federal Reserve's Index measuring the dollar against 1 0 other currencies on a trade-weighted basis was 98.63 Wednesday. Today's data DOW JONES AVERAGE (Wednesday's close) 30 Industrials 2,686.08 Down 13.09 points T-BILLS 12 month 7.73V 6 month 7.70 3 month 7.94 MORTGAGES (Average, based on local survey) Adjustable, 1 10.52 Fixed, 30 10.10 Inside Economy growing slowly The nation's economy continues to grow at a moderate Page C2 Gtech agrees to buyout Lottery giant Gtech Corp.

said it has agreed to a $290 million buyout. Page C2 Steinberg, will join forces in a leveraged buyout 1 United pilots, whose 1985 buyout proposal was rejected, likely would resist a management-led buyout that didn't include the union. In another development, Pan Am Corp. Chairman Thomas Plaskett said Pan Am would consider making a bid for UAL if it were put up for sale. Financially troubled Pan Am, which also made an unsuccessful takeover bid for NWA, parent.

of Northwest Airlines, has said it must merge with another carrier to survive. Pan Am would only consider a friendly offer for UAL, since a hos-. tile bid would be "too expensive, not likely to succeed and not our style," Plaskett told the New York Daily News in Wednesday's editions. Davis stands to profit from his Dl. Tt mm Associated Press CHICAGO The UAL Corp.

board of directors met Wednesday to consider a takeover bid Los Angeles investor Marvin Davis, but industry insiders predicted the offer, estimated at more than $4 billion, would be rejected. The billionaire oilman's proposal for a negotiated deal for the Chicago-based parent of United Airlines is said to be more than $200 a share, or $4.3 billion. At the close of trading Wednesday on the New York Stock' Exchange, UAL stock was up $24.62, to $243.87 a share on rumors that Davis was contemplating raising his bid to $240 a share, or more than $5 billion. UAL shares have, leaped more than $100 in the past year. United likely will reject Davis' offer and wait for higher bids or move to recapitalize the company, industry analysts say.

Takeover frenzy renewed in airline industry. Pag C3. Bids from other investors eyeing UAL are likely to follow, said Kevin Murphy, an analyst for New York-based Morgan Stanley Co. "Usually when stocks go up 20 points in a day, that attracts attention," Murphy said. "I would guess that they will reject the bid" from Davis, he said.

UAL is an attractive takeover target because it owns 80 percent of its 408-jet fleet, which can be sold to finance debt from a takeover. The nation's second-largest carrier, behind American Airlines, also has a vast route network in the Pacific, the world's fastest-growing air-travel market A likely scenario for UAL, according to Wall Street observers, is that management employees and the company's largest shareholder, Saul Associated Press NEW YORK Stock prices' turned downward near the close of a-turbulent session Wednesday, run- ning into some resistance at or near; record highs. -i Airline stocks extended their runaway rise, prompted by a bid for! UAL parent of United Air-'; lines, and other stocks jumped' around in takeover-related The Dow Jones average of 30 in- dustrials, up more than 10 points to early trading, closed with a 13.09-', point loss at 2,686.08. The boom in airline stocks, mean- while, sent the Dow Jones average of! 20 transportation stocks surging) ahead 50.49 points, or 3.72 to 1,406.29, UAL jumped toj Please see Dow, Page C3 1973 BASS EQUALS 100 100 I i. L.l.

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