Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 18, 1994 TAG: 9402180377
SECTION: BUSINESS PAGE: A7 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
BONN, Germany - Taking financial markets by surprise, Germany's central bank cut a key interest rate half a percentage point Thursday, just one day after it said the country was still struggling through its worst recession since World War II.
The Bundesbank lowered the discount rate to 5.25 percent from 5.75 percent, but left its other key rate, the Lombard, unchanged at 6.75 percent. The discount rate is the rate charged for loans to commercial banks; it effectively sets a floor for German money market rates.
Because Germany has Europe's strongest economy and most powerful currency, the Bundesbank's actions have an effect throughout Europe. After Thursday's move, the Italian, Austrian, Belgian and Dutch central banks cut some of their key lending rates. - The New York Times\ \ Affordable housing gets fund infusion
The Virginia Housing Development Authority has approved $4 million in new money that eligible housing groups can tap to provide affordable housing for low-income, elderly and disabled Virginians.
The Flexible Funds Program will provide low-interest-rate loans for mortgage financing of single-family projects and the production of affordable rental housing and projects for the homeless.
A limited amount of construction financing will be available for certain projects providing home ownership. Loan rates and terms vary with the type of financing.
Application packets for the first competitive round will be available from the VHDA in Richmond on March 1. Deadline for submission is 5 p.m. June 1.
The application process is open to nonprofit and for-profit developers and local governments.
The VHDA said it expects to have five additional rounds of funding over the next two years, with about $3.5 million in each round. Funds will be awarded three times annually.
The VHDA housing fund was created in 1986 to provide a flexible source of money for projects that could not otherwise be financed. It has allocated $58 million to this fund, which supports more than $103 million in housing finance activities. - Staff report\ \ Pioneer Financial, Signet to merge
Signet Banking Corp. of Richmond and Pioneer Financial Corp. of Chester said Thursday they have agreed to merge. The deal is expected to close in the fall.
Pioneer is the parent company of Pioneer Federal Savings Bank, a $400 million thrift.
Robert Freeman, Signet chairman, said the transaction will establish Signet offices in Hopewell and Chase City and expand its operations in Chester, Colonial Heights, Petersburg and Richmond.
Pioneer shareholders will receive 0.6232 of a Signet share for each Pioneer share. Based on Signet's closing stock price of $37.87 1/2 on Thursday, the transaction has a value of $60 million.
The stock market took little notice of the transaction Thursday. Pioneer closed unchanged at $21.75, while Signet moved down an eighth to $37.87 1/2. Tyler Pugh, vice president at the Roanoke office of Wheat First Securities, said that was because there had been some anticipation of a deal.
After conversion, 10 of Pioneer's 11 branches will remain open. A branch in Richmond will consolidate with a Signet office less than a block away. - Staff report\ \ Mortgage rates drop this week
WASHINGTON - Thirty-year, fixed-rate mortgages averaged 7.11 percent this week, down from 7.21 percent last week, according to a national survey released Thursday by the Federal Home Loan Mortgage Corp. It was the lowest rate since Feb. 4.
On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 4.18 percent, down from 4.25 percent last week.
Fifteen-year mortgages averaged 6.64 percent this week, down from 6.72 percent. - Associated Press\ \ Briefly . . .
U.S. stock and financial markets will be closed Monday for the Washington's Birthday holiday. The Treasury Department's weekly auction of short-term securities will be postponed until Tuesday. The Roanoke Times & World-News will publish regular business pages but will not include financial tables Tuesday and will resume regular reports in Wednesday's editions.
Qualex Inc., which develops photo film for retailers, will close its film processing plant in Norfolk on March 18, eliminating 66 jobs. The Durham, N.C.-based company decided it could serve its customers more efficiently from larger plants in Roanoke and Fayetteville, N.C., said Jim Hewitt, senior vice president for administration.
by CNB