nuclear-news

Liquidating Tokyo Electric would cause huge problems and must be avoided, Chief Cabinet Secretary Yukio Edano said yesterday. The company’s shares fell an unprecedented 28 percent to 207 yen yesterday after the head of the Tokyo Stock Exchange said it needs to be restructured. The stock rose today.

Political bickering over the future of Prime Minister Naoto Kan has cast doubt over whether his administration can implement its plan to ensure that Tokyo Electric compensates victims of a disaster at its atomic plant. Tepco, as the utility is known, has slumped 90 percent, erasing about 3.1 trillion yen ($39 billion) in market value, since a March 11 earthquake and tsunami triggered the worst nuclear crisis in 25 years.

“Speculation that it’s just a matter of time before Tepco goes bankrupt has been dominating the stock market, in stark contrast with the government’s efforts to keep it alive,” said Yasuhide Yajima, an economist at NLI Research Institute in Tokyo. “The market doesn’t trust the government’s ability to move ahead with plans to keep Tepco afloat.”

Contracts insuring Tepco’s debt for five years jumped 400 basis points to 1,150 late yesterday, or 115 million yen a year to protect 1 billion yen of debt, according to CMA prices in Tokyo. The credit-default swaps showed a likelihood of a default in five years at 59 percent, the highest level on record. Tepco has 6.83 trillion yen of bonds and loans outstanding……http://www.businessweek.com/news/2011-06-06/tepco-s-state-support-at-odds-with-market-seeing-bankruptcy.html