Honolulu Star-Bulletin Business Briefs /2005/06/07/

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DEALING WITH ICE EPIDEMIC

FL MORRIS / FMORRIS@STARBULLETIN.COM
Hawaii filmmaker Edgy Lee produced videos on drug prevention that were shown yesterday to local maritime executives. The videos included interviews with longshore workers in recovery from addiction to crystal methamphetamine.

NATION
Lenders may cut rates for Boyd Gaming Corp.

Bank of America Corp., CIBC World Markets and Wells Fargo & Co. may cut the rates on $1.85 billion of bank loans for Boyd Gaming Corp., which co-owns the Borgata Hotel Casino & Spa in Atlantic City, N.J.

Boyd Gaming wants to increase its revolving credit to $1.35 billion, from $1.1 billion, and reduce the interest rate to 1.25 percentage points more than the London interbank offered rate, said Treasurer Paul Chakmak. He said the Las Vegas-based company is paying Libor plus 1.5 percentage points on the revolving credit.

A conference call to sell the proposed loans was held Thursday, Chakmak said. Boyd Gaming also wants to cut the interest rate to Libor plus 1.5 percentage points on a $496 million term loan, from Libor plus 1.75 percentage points.

Three-month Libor, an average of rates set daily by banks and used as a borrowing benchmark, is 3.37 percent. In a revolving credit, money can be borrowed again once it's repaid; in a term loan, it can't.

New York's Olympic bid set back

ALBANY, N.Y. » New York City's bid to host the 2012 Olympics was dealt a setback yesterday when a powerful state board rejected a plan to build a $2 billion stadium in Manhattan.

The state financing board failed to approve $300 million in state money for the stadium. The plan needed the unanimous approval of the three-member board, and it received only one vote.

New York is competing with Paris, London, Madrid and Moscow for the 2012 Games. Earlier yesterday, the International Olympic Committee released a report ranking Paris highest among the finalists and indicating that construction of the stadium is crucial to New York's chances.

"If we don't have a stadium, we cannot get the Olympics," New York Mayor Michael Bloomberg said hours before the vote, when it became clear the state funding plan did not have unanimous support.

The board's vote does not mean the city's bid is dead: The funding plan could still be renegotiated and brought back for reconsideration. But with the IOC scheduled to choose a host city July 6, time is running short on the protracted stadium negotiations.

Scrushy jury fails to break deadlock

Deadlocked jurors in the corporate fraud trial of HealthSouth Corp. founder and fired CEO Richard Scrushy deliberated an 11th day yesterday without reaching a verdict.

With the extended talks bumping into other commitments, including vacation plans, a court official said the jury was scheduled to deliberate only one more day this week despite the judge urging them to make a unanimous decision and avoid a mistrial.

U.S. District Judge Karon Bowdre ordered the jury to continue talks yesterday after getting a note from the foreman on Friday saying the panel couldn't make a unanimous decision on any of the 36 counts accusing Scrushy of orchestrating a $2.7 billion earnings overstatement.

Washington Mutual plans to buy Providian

SAN FRANCISCO » Washington Mutual Inc., the nation's largest savings and loan, said yesterday it is expanding into the credit card business by buying Providian Financial Corp., a once-troubled lender that bounced back from the brink of failure to become a prime takeover target.

Seattle-based Washington Mutual initially valued the stock-and-cash deal at $6.45 billion, or $18.71 per share -- a modest 4 percent above Providian's closing price last week.

Investors weren't impressed. Providian's shares fell 33 cents, or 1.8 percent, to close yesterday at $17.63 on the New York Stock Exchange, where Washington Mutual's shares declined $1.03, or 2.5 percent, to finish at $40.54.

Hoping to thwart potential rival bids, Washington Mutual imposed a $245 million break-up fee as part of its agreement with Providian.

Warehouse developer is buying competitor

ProLogis, a company that touches just about every good found in American households, further cemented its lead in the global warehousing industry yesterday by agreeing to pay $4.9 billion for a competitor.

The world's largest real estate investment trust company specializing in warehouse development is paying nearly $34 a share in cash and stock to purchase San Francisco-based Catellus Development Corp.

Combined, the companies will have assets exceeding $21 billion. They expect to develop at least 12 percent of the roughly 100 million square feet of industrial warehouses projected to be constructed in the United States next year.