It looks like the Securities and Exchange Commission is heeding President Bush’s urging that all Americans return to their daily routine.

On Thursday, the SEC announced that the eased rules for corporate share repurchases–instituted after the terrorist attacks–will expire on Friday and will not be extended.

“The relief provided in that order expires tomorrow, October 12, 2001, and will not be renewed,” the agency said in a statement.

The repurchase rules were instituted to help increase liquidity in the markets after they shut down for four days.

The SEC also had suspended accounting consequences under the pooling of interests provisions for companies that repurchased their shares.

However, after the expiration of the Exemptive Order, “acquisitions by companies of their own equity securities once again will be governed by the existing accounting literature and related Commission rules and staff interpretations related to pooling-of-interests accounting as they were before the Emergency Order on September 14, 2001,” the SEC added.

Junk Default Rate to Hit 10 Percent

Here’s yet another reason why the junk bond market is all but nonexistent–The global junk bond default rate should reach 10 percent by the end of this year, according to Standard & Poor’s Corp.

Already this year, 121 companies have defaulted on a record $74.3 billion of debt, notes the rating agency.

In all of last year, 108 companies defaulted on $34.3 billion of debt.

The main reason, of course, is the lousy global economy, which is threatening to meet the official definition of recession.

And, it’s obvious which sector has experienced the most defaults: telecom, which accounted for 23 defaults totaling more than $30 billion. The telecom industry has been marred by a sudden collapse in demand for services and a hostile capital markets environment, which prevents companies from raising cash or refinancing their enormous amounts of debt.

On Tuesday, Moody’s Investors Service said its global junk bond default rate rose to about 9 percent in September, a nine-year high, and will probably peak at 11 percent in the middle of 2002.

Other industries suffering from a number of defaults include capital goods and high tech, with four defaults each.

These industries were followed by chemical companies, with three defaults, and aerospace and defense, consumer products, finance, media and entertainment, and metals and mining companies, all of which kicked in two defaults.

Other Financing News

• Independent power producer Calpine Corp. added $850 million to an existing 10-year note, up from an originally planned $287 million. As a result, the total amount of notes currently outstanding are $2 billion. The latest offering was priced to yield 8.525 percent and was rated Baa3 by Moody’s and BB-plus by S&P.

• Domtar Inc., a Canadian maker of fine and specialty papers, issued $600 million of 10-year senior notes, led by J.P. Morgan and Deutsche Banc Alex. Brown. The size of the deal was increased from a planned $500 million. It was priced to yield 8.068 percent, or 340 basis points over Treasurys and was rated Baa3/BBB-minus.

• Aegon NV filed a shelf registration to offer up to $4 billion in debt securities. It plans to use the proceeds for general corporate purposes, including operations, debt repayment, capital spending, and acquisitions.

• Southwest Airlines Co. filed to offer up to $1 billion in securities.

• Moody’s upgraded the ratings of Citigroup’s long-term debt from Aa2 to Aa1 and Citibank long-term deposits from Aa2 to Aa1. The long-term debt ratings of Citicorp and Salomon Smith Barney were also upgraded from Aa3 to Aa1. Additionally the insurance financial strength ratings of various Travelers insurance companies were raised from Aa3 to Aa1.

“The upgrades reflect Citigroup’s earnings diversification by business, customer, and geography,” notes a Moody’s release. “The company has strong global franchises in consumer banking, consumer finance, credit cards, insurance, and wholesale banking. The combination of business strength and substantial diversification generates a steady stream of operating earnings to absorb cyclical changes in credit and insurance costs.”

• Moody’s also cut Global Crossing Ltd.’s debt ratings three notches and questioned whether the high-speed communications network services company can remain in compliance with its bank covenants. The cuts affect about $9.2 billion of debt and preferred securities. According to Moody’s, Global Crossing “may be yet further impacted by the general economic slowdown and, in particular, by the broad-based scaling back of enterprise and carrier telecom spending plans.”

IPO News

Meanwhile, the IPO market is desperately trying to revive itself.

On Thursday, Therasense Inc., the ailing maker of glucose monitoring equipment for diabetics, raised $114 million in its initial public offering led by U.S. Bancorp Piper Jaffray Inc. It sold 6 million shares at $19 a pop, in the middle of its anticipated price range.

Therasense, which makes a system that enables patients to draw blood from their forearms in a less painful way than current equipment that takes samples from fingertips, plans to use the proceeds to increase its sales through marketing efforts, for research and development, and to expand its facilities.

• X-ray technology firm Bruker AXS Inc. on Thursday said it plans to issue 9 million shares in its initial public offering. However, the firm has yet to set a price.

• Meanwhile, Sea Containers Ltd. will delay its planned spin-off of its hotel affiliate–Orient-Express Hotels Ltd. Sea Containers shares apparently took a big hit after the Sept. 11 attacks. The company had already begun to sell 5 million shares of Orient, when the attacks caused the share price to fall.

In Brief

• About 56 percent of US office workers watched or listened to streaming Internet media in September, an all-time high, according to Nielsen NetRatings. Neilsen also reports that more than 21 million people either watched streaming video or listened to streaming audio in September, up 21 percent from 17 million in the same period last year.

• According to the Federal Trade Commission, The Hearst Corp. agreed to pay $4 million in civil penalties to settle charges that it failed to include required documents in its 1998 Medi-Span, Inc./Medi-Span International Inc. pre-merger notification report. It is the largest sum ever assumed by a single company for violation of the pre-merger notification law.

• It looks like business travel is slowly coming back. US Airways said it will add four shuttle flights each business day between Boston’s Logan International and New York’s LaGuardia airports because of increased demand. However, these routes will still run below pre-Sept. 11 levels.