H&R Block customers lose option of short-term loans

Millions of H&R Block Inc. customers who relied on short-term loans backed by their expected tax refunds will not have that option this year, since Block’s banking partner was forced by federal regulators to stop offering the loans.

It’s a blow to Block, the nation’s largest tax preparation company, which could lose tax customers to competitors still offering the loans. Block has virtually no time to find a new funding partner before tax season starts in January.

That means Block could lose millions of dollars in revenue, since nearly 45 percent of its customers use a refund anticipation loan or refund anticipation checks. The company made about $146 million on the two products in 2010.

 

Insurance giant AIG obtains $3 billion in credit facilities

American International Group Inc. is taking yet another step on its road to recovery, obtaining $3 billion in credit facilities.

The news sent AIG shares soaring 9 percent Monday.

The New-York based insurance giant said it will be able to tap the facilities once it finishes paying back its bailouts.

AIG received the biggest government rescue of any financial company during the recent crisis. Its lifelines from the Federal Reserve and Treasury were worth $182 billion.

The $3 billion in credit facilities will be split evenly between a 364-day agreement and a three-year agreement. AIG also said that Chartis has entered a one-year, $1.3 billion letter of credit facility. There are 36 banks participating in the facilities.

 

European Central Bank steps up bond purchases

Data from the European Central Bank shows it bought government bonds worth $1.46 billion in the week ended Dec. 24, as the ECB stepped up purchases in its bid to ease Europe’s debt crisis.

The previous week the central bank invested much less in bonds from governments with shaky finances such as Ireland, Greece and Portugal, disappointing traders who had hoped the ECB would play a more active role as the region tries to keep the debt crisis from pushing more states into international bailouts.

Buying bonds supports their prices and keeps countries’ borrowing costs in check.

Despite the increase, Monday’s data is still far below ECB bond purchases seen earlier this year.

 

Corporate mergers rise for first time since 2007

Snapping a three-year slowdown, the corporate world’s appetite for dealmaking has returned.

The volume of global mergers this year rose 19 percent, according to Dealogic, ticking up for the first time since 2007 as firms looked for ways to deploy the record amount of cash sitting on their balance sheets.

But because companies often shed jobs when they combine, this renewed enthusiasm for mergers could spell trouble for some workers.

Conditions are ripe for a comeback in mergers and acquisitions because U.S. companies are holding a record $2 trillion in cash. They have been hesitant to use these funds to hire as they wait to see whether the economic recovery picks up more speed.

The deal market, however, is still far from its glory days in 2007, when global mergers totaled $4.6 trillion. comparison, this year deals are on track to surpass $2.7 trillion, according to Dealogic, which tracks corporate mergers and acquisitions.

 

Germany plans creation of cyber defense center

Germany is planning the creation of a national cyber defense center in 2011 in reaction to a growing number of cyber attacks on government institutions that mostly originate in China.

An Interior Ministry spokesman said Monday that in 2009 the government registered only 900 attacks, compared with 1,600 electronic attacks in the first half of 2010, as well as a high number of unreported cases.