Here is a look at more of Monday's top business stories:
Last year worst for corporate defaults
NEW YORK, Jan. 14 (UPI) -- Standard & Poor's Corp. said last year was the worst ever for corporate defaults, as a record 211 companies worldwide defaulted on a record $115.4 billion of debt.
The credit rating agency said the old records were set in 2000, when 132 issuers defaulted on $42.3 billion of debt.
S&P said 162 of the defaulting issuers came from the United States, including bankruptcy energy trader Enron Corp., California utilities Pacific Gas & Electric Co. and Southern California Edison, and a flurry of upstart telecommunications companies.
The default rate for speculative-grade, or junk-rated, issuers surged to 8.57 percent in 2001 from 5.68 percent in 2000, the highest since the 10.87 percent record set in 1991, S&P said.
About 4 percent of all issuers -- including those with investment-grade ratings -- defaulted in 2001, matching the record set in 1991, the rating agency said.
S&P also said it expects the U.S. economy to bottom in the first quarter of this year, and that the default rate is likely to peak near 11 percent by the beginning of summer, before trailing off by year end.
"In a typical cycle, defaults peak six months after an economic bottom," said Diane Vazza, S&P's head of global fixed income research.
Meanwhile, Weiss Ratings Inc., an independent provider of ratings and analyses on the insurance industry, said despite the recession, only 40 insurance companies failed in 2001, a modest 5 percent increase over the 38 failures recorded in 2000.
Weiss said property and casualty insurers represented a disproportionate 34 of the 40 insurance company failures, with the Reliance Group's insolvency alone accounting for 12 of the property and casualty company failures.
Conversely, the number of HMO failures declined for the second straight year, dropping 58 percent to 8 in 2001, from 19 in 2000. Likewise, bank failures decreased by 43 percent from 7 to 4 during the same period.
"The property and casualty insurers are the weakest right now. We saw property and casualty failures start to climb in 2000, and that trend has not changed," said Martin D. Weiss, chairman of Weiss Ratings.
"Fortunately, the HMO industry appears to be stabilizing as companies return to profitability. And, despite an overall weakening in the banking industry, banks and thrifts are still generally well-capitalized thanks to the last 10 years of strong earnings," Weiss said.
Among the 48 HMOs and insurance companies that failed in 2001, Weiss had issued financial safety ratings on 36, with 92 percent of those rated "Weak" or lower. The remaining 8 percent had been rated "Fair."
"What's not yet apparent in the failure statistics is the earnings weakness in each of the financial sectors," added Weiss. "Compared to this time last year, profits are down at more than half of all banks and insurance companies, indicating a need for caution ahead," he added.
Rodamco North America sold for $5.3 billion
SYDNEY, Australia, Jan. 14 (UPI) -- Australia's Westfield Group and America's Simon Property Group Inc. and The Rouse Co. have agreed to slice up Rodamco North America NV for $5.3 billion, ending a battle for control of the U.S. shopping mall owner.
Much of Dutch-based Rodamco is going to Westfield America Trust, a major property group run by Australia's Frank Lowy whose Westfield group already operates some 39 shopping malls in the United States, and has agreed to buy another nine.
Westfield, which will take on 14 of Rodamco's 35 malls, said the deal would make it the number two mall operator in the United States behind Indianapolis-based Simon Property Group, which will take 13 of Rodamco's malls. Maryland-based The Rouse Co. will assume the other eight.
The three companies will pay a combined 55 euros or about $49.15 a share, or 28 percent more than Rodamco's share price in August, when Westfield bought 24 percent of the Dutch company and announced plans to oust its management.
The transaction gives the buyers some of America's best performing malls based on sales, including Garden State Plaza in New Jersey, Copley Place in Boston and Houston's Galleria.
Westfield will get Garden State Plaza in New Jersey which has retailer tenants like JC Penney, Macy's and Lord & Taylor; and Old Orchard Center in Illinois which, among others, houses a Saks Fifth Avenue store.
Simon Property, which owns several properties in southern United States, would get the renowned Galleria in Houston and the SouthPark Mall in Charlotte and some properties in Florida.
Rouse of Columbia, Maryland, will pay $775 million for stakes in eight malls, including half of the Chicago's Water Tower Place and half of Atlanta's Perimeter Mall.
Though retail sales are down with the U.S. economy in recession, Rodamco's properties generate sales of $450 a square foot, almost 50 percent above the industry average.
Westfield's share of the transaction is valued at around $2.3 billion, while Simon and Rouse will pay $1.55 billion and $1.45 billion respectively.
The intercontinental deal is expected to close in 90 days. The buyers said they expected to achieve returns of 8.5 percent in the first year after the transaction.
"The addition of the Rodamco NA centers complements the recent acquisition of nine new centers from the Jacobs Group and further enhances the geographic spread of assets across the U.S.," said Peter Lowy, chief executive of Westfield America.
After the sale, Rodamco will be liquidated and the proceeds will be distributed to investors.
Comdisco sells unit to GE unit
ROSEMONT, Ill., Jan. 14 (UPI) -- Comdisco Inc. said it has reached an agreement to sell its Electronics and Laboratory & Scientific leasing businesses to GE Capital's Commercial Equipment Financing unit.
GE Capital is the financial services unit of the General Electric Co.
The deal is subject to approval by the U.S. Bankruptcy Court for the Northern District of Illinois at a hearing scheduled for Jan. 24, Comdisco said.
Under terms of the deal, GE Capital Commercial Equipment Financing will pay Comdisco approximately $665 million, with future contingent payments based on various portfolio performance criteria.
The consideration includes the assumption of related secured debt. If approved, the sales are expected to close by no later than March 31.
Comdisco also said that, as part of its comprehensive evaluation process to maximize business enterprise value for its stakeholders, it expects to complete its evaluation of its remaining Leasing businesses -- Information Technology, Telecommunications and Healthcare -- by Jan. 31.
The company said it received bids for all of the business units during the Court-supervised auction process that concluded in December and that all of the bids must stay open until Jan. 31.
Norm Blake, Comdisco's chairman and chief executive officer, said, "The board concluded that the consideration offered for the Electronics and Laboratory & Scientific assets represents the highest value we could expect to receive and we are confident that these businesses and their customers will benefit from the unparalleled reputation and tremendous resources of GE Capital Commercial Equipment Financing.
"With respect to our other equipment leasing businesses, we expect to conclude our review by Jan. 31, 2002," he added.
Comdisco, Inc. and 50 domestic U.S. subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Illinois on July 16, 2001.
The filing allows the company to provide for an orderly sale of some of its businesses, while resolving short-term liquidity issues and enabling the company to reorganize on a sound financial basis to support its continuing businesses.
Comdisco's operations located outside of the United States were not included in the Chapter 11 reorganization cases.
All of Comdisco's businesses, including those that filed for Chapter 11, are conducting normal operations. The company has targeted emergence from Chapter 11 during the first half of this year.
HealthSouth comfortable with Wall Street's estimates
BIRMINGHAM, Ala., Jan. 14 (UPI) -- HealthSouth Corp., the nation's largest provider of diagnostic imaging, rehabilitation care and outpatient surgery, reiterated that it remains comfortable with Wall Street's earnings estimates of $1.14 a share in 2002.
The company, which issued earnings guidance last month, said that it has been preparing for Medicare's switch to a "prospective payment system" for in-patient rehabilitation care for several years.
Analysts on Wall Street are expecting the company to benefit from increased Medicare reimbursements from this new system.
"HealthSouth has been an outspoken advocate of PPS in congressional and regulatory circles for some time. It only makes sense that cost-efficient providers, like HealthSouth, should have the opportunity to earn a profit," said Chairman and Chief Executive Richard Scrushy.
"We are ready for PPS and have seen no surprises since implementation on Jan. 1, 2002," he added.
Right Management to buy Coutts Consulting Group
PHILADELPHIA, Jan. 14 (UPI) -- Executive headhunter Right Management Consultants Inc. said it has agreed to acquire the holding company of Coutts Consulting Group Plc, a London-based career transition and organizational consulting firm, for about $108 million.
Right Management also said it expects to beat Wall Street's expectations for the fourth quarter and the full year, reporting record revenues of about $94 million and $313 million respectively.
The company said it expects to report a net income of 35 cents a diluted share for the fourth quarter and $1.20 a share for the year.
Right Management said the value of the Coutts acquisition includes anticipated costs and consists of a combination of cash, notes and the repayment of debt.
The acquisition is subject to the completion of a definitive purchase agreement and financing and is expected to close during the first quarter of 2002.
Right said it plans to finance the acquisition, refinance its existing debt and provide for additional working capital through a new term and revolving debt facility.
Richard J. Pinola, chairman and chief executive officer said, "In keeping with our strategy of being able to service our clients across the globe, this acquisition substantially enhances our delivery network in Europe and Japan.
"Moreover, as part of this acquisition we add the premier European career transition firm with an international reputation for quality, innovation and exceptional client service. Our new colleagues will fit comfortably within Right's culture of responsive, creative client service," he added.
