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Goldman Sachs, Blackstone settle bond dispute; 2 New Jersey banks to merge

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Goldman Sachs, Blackstone settle bond dispute; 2 New Jersey banks to merge

Goldman Sachs Group Inc. and Blackstone Group LP settled a standoff related to a derivatives trade on bonds issued by homebuilder Hovnanian Enterprises Inc., The Wall Street Journal's sources say. Blackstone's GSO Capital Partners LP offered cheap, long-term debt to Hovnanian in exchange for the homebuilder intentionally skipping an interest payment. Blackstone had bought insurance against a default and stood to make money from the skipped interest payment from Hovnanian. This arrangement put Goldman at the risk of losing money. The two companies have "effectively zeroed out" the trade between them and Blackstone has agreed to assume Goldman's position, the sources say.

In banking news, Manasquan, N.J.-based MB Mutual Holding Co. is acquiring Metuchen, N.J.-based Metuchen MHC in a deal expected to close in the fourth quarter.

Cerberus Capital Management LP is planning to sell DynCorp International Inc., a defense contractor it acquired in 2010 for more than $1 billion, sources told Reuters. The private equity firm has hired two investment banks to assist in the deal, which could be valued at more than $1.3 billion.

PayPal Holdings Inc. plans to pursue several deals valued between $1 billion and $3 billion in each of the next several years. The payment processor may target markets in India, Indonesia, Brazil, Mexico and possibly China. The company recently announced that it is acquiring iZettle AB for $2.2 billion, its largest deal ever.

SIA S.p.A., an Italian payment processor, is set to acquire First Data Corp.'s card processing business in parts of Central and Southeastern Europe for $439.2 million. The deal is expected to close in the third quarter.

In other parts of the world

Asia Pacific: Ex-PICC Group president sentenced to prison; Fidelity Life bids for ANZ unit

Europe: EC proposes 'safe bonds'; Deutsche Bank chair survives removal attempt

Middle East & Africa: Hapoalim, Leumi post Q1 profits; Kenya keeps rate cap; South Africa holds rate

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng declined 0.56% to 30,588.04, while the Nikkei 225 increased 0.6% to 22,450.79.

In Europe, around midday, the FTSE 100 was up 0.24% to 7,736.44, and the Euronext 100 was up 0.46% to 1,077.21.

On the macro front

The durable goods orders report, two-year FRN note settlement report and the Baker-Hughes Rig Count report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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