2024-03-15 20:24

WASHINGTON, March 13 (Reuters) - (This March 13 story has been corrected to say most hydrogen today is produced through steam methane reforming, not electrolyzers in paragraph 4, and to say the goal is the production of 10 million metric tonnes of clean hydrogen per year by 2030, not 10 million metric tonnes by 2030, in paragraph 6) The U.S. Department of Energy said on Wednesday it is granting $750 million to projects across 24 states that are building capacity to produce and use clean hydrogen. Hydrogen is a fuel that the administration of President Joe Biden sees as crucial to reducing use of fossil fuels and cutting emissions from hard-to decarbonize industries such as aluminum and cement. It is made by electrolyzers that split water into hydrogen and oxygen and can be considered green if they are powered by zero-emission sources like solar, wind, nuclear or hydro. Today the vast majority of hydrogen is produced through steam methane reforming with unabated emissions, at a fraction of the cost of clean hydrogen. The funding for 52 projects in states from Rhode Island to Oregon comes from the 2021 bipartisan infrastructure law. The projects are working on six aspects of the hydrogen industry, including research and development on production of electrolyzers, securing supply chains for the machines, and recycling critical materials used in hydrogen production, such as iridium. "It's a really holistic approach," Sunita Satyapal, head of the DOE's hydrogen and fuel cell technologies office, told Reuters about the range of the projects receiving grants. Satyapal said the grants would help the U.S. reach its National Clean Hydrogen Strategy goals, including production of 10 million tonnes of clean hydrogen per year by 2030. Energy Secretary Jennifer Granholm said the projects will "supercharge our progress and ensure our leadership in clean hydrogen will be felt across the nation for generations to come." The grants will help lay the groundwork for the administration's $7 billion hydrogen hub program, funding of which was also included in the 2021 bipartisan legislation. The administration announced last October seven hubs in 16 states will share the grants in an effort to spur the industry. Satyapal said the projects should help the U.S. boost its electrolyzer manufacturing capacity from a couple of gigawatts per year to 10 GW, enough to produce an additional 1.3 million tonnes of clean hydrogen annually. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/us-grants-750-million-hydrogen-projects-across-24-states-2024-03-13/

2024-03-15 20:06

NEW YORK, March 15 (Reuters) - Sam Bankman-Fried should spend between 40 and 50 years in prison after being convicted for stealing $8 billion from customers of his now-bankrupt FTX cryptocurrency exchange, prosecutors said on Friday. In November, a jury found Bankman-Fried, 32, guilty on seven counts of fraud and conspiracy. Federal prosecutors in Manhattan said "thousands of everyday people" including residents of war-torn and unstable countries had entrusted their nest eggs to FTX. "Even now Bankman-Fried refuses to admit what he did was wrong," prosecutors wrote in a sentencing memorandum. "His life in recent years has been one of unmatched greed and hubris; of ambition and rationalization; and courting risk and gambling repeatedly with other people's money." They are seeking $11 billion in forfeiture, to account for losses FTX's investors and Alameda's lenders suffered as well. The former billionaire's lawyer Marc Mukasey told U.S. District Judge Lewis Kaplan that a 5-1/4 to 6-1/2 year prison term would be appropriate. They said FTX clients would get most of their money back, and that Bankman-Fried did not set out to steal. Mark Botnick, a spokesman for Bankman-Fried, said Mukasey would file a response next week to prosecutors' memorandum. Kaplan is scheduled to sentence Bankman-Fried on March 28 in Manhattan federal court. Bankman-Fried plans to appeal his conviction and sentence. Bankman-Fried is the son of two Stanford Law School professors. A graduate of the Massachusetts Institute of Technology, Bankman-Fried worked on Wall Street before riding a boom in the values of digital assets such as bitcoin to a net worth Forbes magazine once estimated at $26 billion. His fortune evaporated in November 2022, when FTX declared bankruptcy after a wave of customer withdrawals. In their sentencing memorandum, prosecutors pointed to his privileged upbringing and elite education as reasons he should face an especially harsh sentence. "He knew what society deemed illegal and unethical, but disregarded that based on a pernicious megalomania guided by the defendant's own values and sense of superiority," they wrote. POLITICIANS RETURN DONATIONS At his trial, three former close associates testified that Bankman-Fried directed them to loot FTX customer funds to plug losses at his Alameda Research hedge fund, while portraying himself publicly as a responsible steward in the volatile cryptocurrency market. Prosecutors said Bankman-Fried also used customer funds to buy luxury real estate in the Bahamas and to donate to U.S. politicians who might support cryptocurrency-friendly regulations. So far, 251 U.S. political candidates and committees have returned to the government some $3.3 million in contributions from Bankman-Fried and other FTX executives, prosecutors said. Democratic President Joe Biden's campaign and the Republican National Committee are among those that have returned funds. Bankman-Fried testified that he did not realize how much Alameda owed to FTX until shortly before both failed. His trial lasted one month. In a letter to Kaplan, Bankman-Fried's parents said their son took responsibility for the errors that led to FTX's collapse, and worked hard before his arrest to help recover customers' money. Bankman-Fried was arrested in December 2022 in the Bahamas, where FTX was based, and extradited to the U.S. He has been jailed at Brooklyn's Metropolitan Detention Center since August, when Kaplan revoked his bail after finding that he likely tampered with witnesses. Jumpstart your morning with the latest legal news delivered straight to your inbox from The Daily Docket newsletter. Sign up here. https://www.reuters.com/legal/sam-bankman-fried-deserves-40-50-years-prison-ftx-fraud-prosecutors-say-2024-03-15/

2024-03-15 18:58

March 15 (Reuters) - The U.S. market for one of the riskiest types of corporate debt is resurging this year, as companies cater to investor demand for assets that can lock in high yields for several years ahead of an expected decline in interest rates. Holders of these bonds, called junior subordinated debt, are among the last to be paid in case of a default and companies can defer interest payments. The reward for such high risk is yields that exceed those of senior bonds, for maturities of up to 40 years, though issuers typically call, or redeem, the bonds in five or 10 years. Like stocks, these hybrid bonds rank low in a company's capital structure, but they resemble bonds with interest payments. With the Federal Reserve widely expected to start cutting rates later this year, investors are scrambling to get their hands on securities that will pay the current levels of high interest for years to come. To meet this demand, five companies this year have issued $4.6 billion of junior subordinated debt, and a sixth hit the market on Thursday. This pace is significantly faster than in the last two years, Barclays data shows, with $8 billion issued in full-year 2023. Barclays' analyst Bradford Elliott estimates sales of junior subordinated bonds could reach $15 billion to $20 billion this year. Investors have plowed in a net $1 billion into funds that invest in hybrid bonds since October, he noted. The renewed interest is giving companies an additional financing option as debt comes due. INCREASING ATTRACTIVENESS A change in Moody's rating methodology on Feb. 1 has made hybrid bonds more attractive for companies, bankers and analysts said. Last month, Moody's said it would start giving 50% equity credit when rating a company's hybrid debt or count half of an issuer's subordinated debt as equity capital, up from 25% previously. The move, in line with S&P and Fitch, means companies can reliably use hybrid bonds to raise more capital without hurting their credit ratings. Among issuers of junior subordinated debt so far this year, NextEra Energy Capital (NEE.N) , opens new tab used some of the proceeds to refinance short-term commercial paper. Energy Transfer (ET.N) , opens new tab, which owns and operates a diversified portfolio of energy assets, said it refinanced preferred shares, another type of hybrid bond that is riskier than junior subordinated debt. Daniel Botoff, global head of debt capital market syndicate at RBC Capital Markets, said junior subordinated debt also had a tax advantage over preferred shares. "It is more cost-efficient for companies to issue junior subordinated debt whose interest payments were tax-deductible to refinance taxable preferred stock that is becoming callable," Botoff said. STRONG DEMAND With strong demand, the average credit spreads on corporate hybrid bonds, or the premium paid over Treasuries, tightened nearly 200 basis points since it peaked at 523 basis points in October, Elliott said. The six companies that have issued subordinated bonds this year paid 6% to 8% in yields, just 150-200 basis points more than on their higher ranked senior bonds. In another sign of firm demand, Energy Transfer increased its offering in January to $800 million from an initial $500 million. It received $5 billion in orders, Informa Global Markets data showed. Hybrid bonds are "sensitive to macro conditions," said Tim Crawmer, global credit strategist at Payden & Rygel. "They have a higher correlation to improving credit quality and improving equity risk sentiment than they do to interest rates." Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/peak-rates-boost-us-demand-riskier-form-corporate-debt-2024-03-15/

2024-03-15 18:25

MILAN, March 15 (Reuters) - Telecom Italia's (TIM) Chief Executive Pietro Labriola has warned investors the company could need to raise billions in capital if the planned sale of its network to U.S. fund KKR (KKR.N) , opens new tab collapsed, two sources briefed on the matter said. Labriola met a few dozen investors in Milan on Friday after presenting a new three-year strategy last week for the company set to emerge from the fixed network divestment. The TIM CEO will meet other investors in London on Monday. Labriola told the meetings TIM expected to gain necessary approvals to complete the sale to KKR this summer as repeatedly indicated, the sources told Reuters, requesting anonymity as the meetings were confidential. Asked about what would happen if the KKR deal fell through, Labriola said cash-burning, debt-laden TIM would need to reduce spending drastically or seek fresh capital to sustain planned investments, the sources said. TIM shares recorded their sharpest fall on record following the plan's unveiling as investors fretted about debt rising further in the short term and the new company not generating cash before 2026, despite projected robust core profit growth. The market reaction piles pressure on Labriola ahead of a shareholder vote next month over whether to hand him another mandate. Backed by the Italian government and worth up to 22 billion euros, the network deal is opposed by TIM's top investor Vivendi (VIV.PA) , opens new tab, which has questioned the sustainability of the remaining business. With its 24% stake, Vivendi could stand in the way of Labriola's reappointment if an alternative slate of board candidates emerged ahead of the April AGM. Any successor to Labriola would still need to finalise the KKR deal, or else expose TIM to penalties under the accord it sealed with the U.S. fund, one of the sources said. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/business/media-telecom/telecom-italia-flags-cash-call-risk-investors-if-kkr-deal-collapses-sources-say-2024-03-15/

2024-03-15 18:16

March 15 (Reuters) - The United States has widened its investigation of India's Adani Group to focus on the conduct of its founder, Gautam Adani, and whether the company may have engaged in bribery, Bloomberg News reported on Friday. Prosecutors are digging into whether an Adani entity or people linked to the company, including Gautam Adani, were involved in paying officials in India for favorable treatment on an energy project, the report said, citing people with direct knowledge of the matter. The U.S. Attorney's office for the Eastern District of New York and the Justice Department's fraud unit in Washington are handling the investigation and are also looking at Indian renewable energy company Azure Power Global, the report added. "We are not aware of any investigation against our chairman," Adani Group told Bloomberg News. Adani Group, Azure Power and the DOJ did not immediately respond to Reuters' requests for comments. The Attorney's Office for the Eastern District of New York could not be immediately reached. Adani Group's stocks and bonds saw a massive selloff early last year after U.S. short-seller Hindenburg Research issued a report that alleged improper governance practices, stock manipulation and the use of tax havens by the group. The Indian company has denied these allegations. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/india/us-probing-adani-group-founder-over-potential-bribery-bloomberg-reports-2024-03-15/

2024-03-15 17:29

March 15 (Reuters) - U.S. energy firms this week added the biggest number of oil and natural gas rigs in a week since September, with the oil rig count also rising to its highest in six months, energy services firm Baker Hughes (BKR.O) , opens new tab said in its closely followed report on Friday. The oil and gas rig count, an early indicator of future output, rose by seven to 629 in the week to March 15. , , Despite this week's rig increase, Baker Hughes said the total count was still down 125 rigs or 16.6% below this time last year. Baker Hughes said oil rigs rose six to 510 this week, their highest since September, while gas rigs rose one to 116. The oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused on paying down debt and boosting shareholder returns instead of raising output. U.S. oil futures were up over 13% so far in 2024 after dropping by 11% in 2023. U.S. gas futures , meanwhile, were down about 33.7% so far in 2024 after plunging by 44% in 2023. Despite lower prices, spending and rig counts, U.S. oil and gas output was still on track to hit record highs in 2024 and 2025 due to efficiency gains and as firms complete work on already drilled wells. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/us-drillers-add-most-oil-gas-rigs-week-since-september-baker-hughes-2024-03-15/