Fidelity sells $1 billion of bonds
From The Boston Globe
Institutional investors gave Fidelity a warm welcome for its bond offering, so much so that it raised the amount of the offering by a third to an even billion. It sold $750 million in 30-year notes at 7.57% and another $250 million in 20-year notes at 7.49%, to four investment banks and Fidelity's own capital markets division, according to Bill White, head of US syndication at Morgan Stanley Dean Witter, the investment bank that led the offering. Standard & Poor's assigned the debt a double-A rating and Moody's Investor Service assigned a double-A3 investment grade rating. Fidelity is also trying to put the kibosh on rumors that it intended the bond offering as a way to test the waters for a public offering of its stock. The speculation is "rubbish" according to a firm spokesperson.

Performance-based fees highlighted by Fidelity, Amex
From The Wall Street Journal -- subscribers only
Wall Street's paper of record takes on the issue of performance based fees for funds. It reports that just 1.3% of fund companies have compensation tied to the funds' performance versus a benchmark. Leading the story is Fidelity's attempts to remove the performance based fee from its Destiny funds. Also recently, American Express launched five new funds using this fee and plans more. Along with American Express, fund companies using this fee structure include Vanguard, Fidelity, and Pioneer Group Inc.'s Pioneer Investment Management. The paper makes the point that many fund managers have their own compensation tied to the fund's performance, so many fund companies feel they do not need to use the variable pay format.

Principal to buy Australia's BT
From USA Today
Principal Financial Group is buying Bankers Trust Australia Group for $1.38 billion. Germany's Deutsche Bank is selling BT Australia to eliminate overlaps created by its $9 billion purchase of Bankers Trust, which made it the world's biggest bank. Principal Financial, a large pension and insurance company, says the deal includes BT Funds Management's Australian and New Zealand businesses, BT Portfolio Services, BT Margin Lending and the company's investment banking business. 

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