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Building eaten

(AP) -- Termites are being blamed for the floor collapse of an upstairs Los Angeles apartment and led authorities to order six residents out of the 104-year-old building.

There are no injuries.

City News Service said firefighters were called to the Lincoln Heights building on Sunday afternoon when one of the floors in an apartment above a business began giving way.

KTTV-TV said the building has been red-tagged, meaning it's unsafe to enter.

Three men, three women and three dogs are displaced. The Red Cross helped them find shelter.

Building and safety inspectors are expected to condemn the building.

Another REIT

(AP) -- American Realty Capital Properties Inc. (NASDAQ: ARCP) is buying another real estate investment trust, American Realty Capital Trust III, in a cash-and-stock deal as it seeks to diversify and cut costs.

Each share of privately held American Realty Capital Trust III will be converted into the right to receive either 0.95 of a share of Boston-based American Realty Capital Properties or $12 in cash. The exchange ratio is currently equal to $12.26 per share, based on American Realty Capital Properties' Friday closing price of $12.90 per share.

The companies said Monday that the combined company has an enterprise value of $3 billion and will have a portfolio of more than 800 properties.

The boards of both companies have approved the deal, which still needs approval from shareholders.

The acquisition is expected to close during the second quarter.

JPMorgan Chase sued

(AP) -- The government agency overseeing credit unions is suing J.P. Morgan Securities, the investment arm of JPMorgan Chase (NYSE: JPM), over the sale of $3.6 billion in mortgage bonds that collapsed in value after the 2008 financial crisis. It's the National Credit Union Association's (NCUA) largest lawsuit yet.

The NCUA's suit stems from actions by Bear Stearns, the failed bank bought by JPMorgan in early 2008. The suit alleges that Bear Stearns misrepresented or hid information about mortgage-backed bonds sold to four corporate credit unions, breaking federal and state securities laws.

The complaint said that many of the mortgages backing the bonds were bound to fail because underwriting standards were “abandoned.”

When the bonds later dropped in price, the credit unions suffered steep losses and eventually collapsed.

“Firms like Bear Stearns acted unfairly by ignoring the rules for underwriting,” said NCUA board Chairman Debbie Matz. “They packaged these securities and then told buyers the paper was sound. When the securities plunged in value, we learned the truth.”

The four federal credit unions were U.S. Central, Western Corporate, Southwest Corporate and Members United Corporate. NCUA oversees their liquidation.

The lawsuit was filed in a federal district court in Kansas.

The NCUA has eight similar lawsuits pending against other banks, including subsidiaries of Barclays, Royal Bank of Scotland and UBS.

Blasting the river

(AP) -- Barge operators along a key stretch of the Mississippi River braced Monday for months of restricted shipping as crews prepared to begin blasting large rock formations that are impeding navigation on the drought-plagued waterway.

The Army Corps of Engineers said contractors from Iowa and Ohio could begin demolition of the rock pinnacles on the bed of the Mississippi River south of St. Louis as early as Tuesday. They expect to remove enough rock to fill about 50 dump trucks, possibly more.

The demolition of the massive formations near Thebes, Ill., coincides with an unusual move by the agency to release water from a southern Illinois lake, adding a few inches of depth to a river that is getting lower by the day -- largely because of the lingering effects of the nation's worst drought in decades.

BofA sued

(Bloomberg) -- Bank of America Corp., the second- biggest U.S. lender by assets, was sued by German regional lender HSH Nordbank AG over more than $218 million in residential mortgage-backed securities (RMBS).

The Hamburg-based bank sued BofA (NYSE: BAC) in New York State Supreme Court in Manhattan on Dec. 14, accusing the company and its Countrywide unit of making “misrepresentations and omissions” about the underwriting standards for mortgage loans that were pooled together into the securities.

HSH Nordbank is one of a group of regional German lenders that have sued over mortgage-backed securities in New York during the past year.

HSH Nordbank filed a similar suit against Goldman Sachs Group Inc. (NYSE: GS) and Morgan Stanley (NYSE: MS) in August.

The case is HSH Nordbank AG v. Bank of America Corp., 654382/2012, New York State Supreme Court, New York County (Manhattan).

Prudential promotion

(Bloomberg) -- Prudential Financial Inc. (NYSE: PRU), the second-largest U.S. life insurer, named David Durning president of its commercial mortgage business to help lead expansion outside the U.S.

Durning will take over as president of Prudential Mortgage Capital Co., with $72.7 billion under management and administration. He'll replace David Twardock, who had the post since 1999, is retiring, the Newark, N.J.-based insurer said Monday.

Prudential is targeting commercial real estate as the insurer seeks to boost investment income.

David Hunt, CEO of Prudential Investment Management, said in the statement.

The loans Prudential Mortgage Capital Co. owns or services expanded from $69.5 billion a year earlier.

The insurer provided a $71 million loan this month for Olympia House, a 22-story mixed-use building in Manhattan near the United Nations.

The building has 240 apartments and more than 12,000 square feet of commercial space.

Durning is currently a senior managing director and head of originations.

He joined Prudential in 1988 as an investment analyst, and earlier worked at Chemical Bank and Shearson Lehman, according to the statement.

EU building

(Bloomberg) -- Money managers from Carlyle Group LP to KKR & Co. are setting up funds that will allow their investors to take advantage of Europe's $600 billion plan to build its way out of a recession.

Carlyle, the second-biggest private-equity firm, raised $1.38 billion last month to plow into energy projects, while KKR (NYSE: KKR) got more than $1 billion in June for its first infrastructure fund.

BlackRock Inc. (NYSE: BLK), the world's biggest fund manager with $3.67 trillion in assets, hired a team from Blackstone Group LP (NYSE: BX) in November to start its first European investment advisory unit for the industry.

European Union leaders, who pledged to restore growth when they gathered in Oslo last week to accept the Nobel Peace Prize, are wrangling over a 973 billion-euro ($1.3 trillion) budget for the years leading up to 2020, almost half of which is earmarked for infrastructure.

Sofaz buys in London

(Bloomberg) -- Azerbaijan's State Oil Fund, known as Sofaz, bought an office complex in London’s West End for 177 million pounds ($287 million) in its first investment in real estate to diversify reserves.

The “A” class office building erected in 1845 and fully renovated in 2003 was bought from a RREEF Real Estate fund, the real estate arm of Deutsche Bank (NYSE: DB), the Baku-based fund said Monday.

The building is leased to HSBC Bank for 9.65 million pounds annually until 2023.

“This newly acquired office building in London is the first in a series of planned property acquisitions in prime business districts of major cities around the world,” Sofaz's Executive Director Shahmar Movsumov said.

The fund, established in 1999 to manage the Caspian Sea nation's state income from oil and natural gas sales, had $33.9 billion of assets as of Dec. 1.

The RREEF's Grundbesitz-Europa fund said it is seeking to buy more real estate in the United Kingdom.

Norwegian rules

(Bloomberg) -- Norway proposed to move forward with rules that would more than double the money its banks need to reserve when lending to home buyers as regulators seek to cool a booming property market.

The Financial Supervisory Authority should put together a proposal to increase risk weights calculated under the so-called internal ratings based method to 35 percent, the Finance Ministry said Monday.

DNB ASA, the largest Norwegian bank, had an average risk weight of 12.8 percent at the end of last year, according to the central bank.

Below target inflation and falling interest rates abroad prompted Norway's central bank has left its benchmark interest rate unchanged at 1.5 percent since March, the lowest in more than two years, pushing housing prices to records.

Home prices in the fourth-richest nation per capita have doubled since 2002, according to the Norwegian Association of Real Estate Agents.

Household debt will rise to more than 200 percent of disposable incomes next year, according to central bank estimates.

Higher risk weights “should work to stem credit growth and reduce risk in the sector,” Erica Blomgren, chief strategist for Norway at SEB AB in Oslo, said.

London sellers

(Bloomberg) -- London home sellers cut asking prices by the most for a December in five years as an influx of supply and seasonal factors undermined pricing power.

Asking prices fell 4 percent from the previous month to an average 464,398 pounds ($752,000), property website Rightmove Plc (PNK: RTMVY) said Monday.

Rightmove said the decline in London may be a portent of a “less frothy” market in 2013.

The U.K. property market is struggling to gain momentum as a squeeze on mortgage lending and a weak economic recovery deter buyers.

The Bank of England is counting on its Funding for Lending Scheme to stoke borrowing, and Rightmove forecasts competition among lenders will help lift U.K. house prices by 2 percent next year.

A separate report by the Building Societies Association Monday, showed that U.K. consumers are finding it easier to get a mortgage than at any time since the organization started measuring home loan availability in 2008.

Only 45 percent of people surveyed cited mortgage availability as a barrier to property buying in December, compared with 57 percent in the same month last year.

Nevertheless, almost three-quarters of respondents who hadn't bought a home yet said they still believed they would be living with family or renting by the end of next year, with 59 percent citing saving for a deposit as the biggest obstacle to property purchase.

Mitsui in Canada

(Bloomberg) -- Mitsui & Co. has acquired a 30 percent stake in GDF Suez Canada Inc.'s wind and solar power projects in Canada, the Japanese trading company said Monday.

A cost for the acquisition wasn't given.

The Japan Bank for International Cooperation (JBIC) will provide C$477 million loans in project finance for three of the wind projects and two solar stations, the bank said in a statement.

The Bank of Tokyo-Mitsubishi UFJ Ltd., Mizuho Corporate Bank and Sumitomo Mitsui Banking Corp. (NYSE: SMFG) will provide C$318 million in loans for the projects, according to JBIC.

A group led by Fiera Axium Infrastructure Inc. of Canada also has a 30 percent stake in the C$2 billion ($2 billion) projects at 12 locations.

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