Business Briefs

Reported by Star-Bulletin staff & wire

Monday, November 17, 1997

Bankoh parent's outlook
is 'negative', S&P says

The Standard & Poor's credit-rating organization said today it is maintaining its strong ratings for Pacific Century Financial Corp. but that it has revised its outlook for the parent company of Bank of Hawaii to "negative" from "stable."

S&P said profitability at Hawaii's biggest banking and trust company is under continued pressure because of the ongoing sluggishness of the Hawaii economy and an expected slowdown in many of the Asian markets where it does business.

S&P rates Pacific Century's long-term debt at A-minus and Bank of Hawaii's at A. S&P's outlook is the agency's opinion of the company's prospects but does not affect the company's bond rating.

Hawaiian Electric awards
$20 million contract

A Spokane, Wash., company said it has won a $20 million contract to equip Hawaiian Electric Co. with a system so that household electricity meters can be read by wireless equipment in a van in the street.

Itron Inc. said the utility will initially install the system on 80,000 meters at Oahu homes and has an option to extend it to the rest of Oahu as well as the meters of its Maui Electric Co. and Hawaii Electric Light Co. subsidiaries, a total of 330,000 meters.

Installation of the first phase, in Leeward Oahu, should start early next year, Itron said. Hawaiian Electric Co. is a subsidiary of Hawaiian Electric Industries Inc.

Japan markets rally
on government's action

TOKYO - Japan's 11th-biggest commercial bank effectively collapsed today because of bad loans, but the government's quick move to protect depositors reassured financial markets and sent stock prices soaring.

Hokkaido Takushoku Bank Ltd. will transfer most of its branch operations to another bank, government officials said. It informed the Bank of Japan - the central bank - that it would be difficult to continue business because of its bad debt problems.

The Bank of Japan said it will provide special unsecured loans to Hokkaido Takushoku to cover withdrawals by depositors.

Encouraged that government money might be used to help financial institutions deal with their bad loans, investors bought heavily on the Tokyo Stock Exchange, ending a three-week slump. The benchmark 225-issue Nikkei Stock Average surged 8 percent, its fourth biggest one-day percentage gain ever.

Many Japanese financial institutions were saddled with huge amounts of bad debts after stock and land prices, pushed up in a wave of speculation based on easy credit, collapsed in the early 1990s. Many of the loans were secured with land, which is now about 70 percent below its peak prices.