China, Brazil Agree to $10 Billion Loan, Exploration

By John Liu and Andres R. Martinez

May 19 (Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, received $10 billion of loans from China as the company seeks financing to develop the largest crude discovery in the Americas in more than 30 years.

China, the world’s second-biggest energy consumer, will provide the loan to the oil company known as Petrobras, which will supply 150,000 barrels of crude a day to the Asian nation this year and 200,000 barrels in 2010, Petrobras Chief Executive Officer Jose Sergio Gabrielli said today. He and Brazil’s President Luiz Inacio Lula da Silva are in Beijing.

“This visit will create new opportunities for the development of bilateral relations between China and Brazil,” Chinese President Hu Jintao said today at the Great Hall of the People where the two nations signed 13 accords. The agreements included the loan that the China Development Bank will provide to Petrobras and another $800 million the bank will provide to Brazil’s development bank.

Rio de Janeiro-based Petrobras needs to find alternative sources of financing after crude prices plunged about 60 percent from a record $147.27 a barrel last year. Petrobras plans to spend $174.4 billion to explore its so-called pre-salt fields over a five-year period.

The company announced in November 2007 the discovery of the Tupi offshore field, which may hold up to 8 billion barrels of oil, making it the largest find in the Americas since Mexico’s Cantarell. Petrobras aims to pump 1.8 million barrels of oil a day from the fields by 2020, Gabrielli has said.

Credit Crunch

Petrobras has been in talks about a loan with China since last year. The company sought alternatives to international bank lending and bonds to finance its spending program amid the global credit crunch.

Lula, 63, is seeking to attract investment and open China’s markets to Brazilian exports beyond oil, soy and iron to help blunt his country’s sharpest economic contraction on record. China is securing energy resources to power its economy, the world’s third-largest, by offering loans to oil-producing countries including Russia, Venezuela and Kazakhstan.

“The systemic challenges facing the world economy underscores the growing responsibilities of emerging economies,” Lula wrote in an article published today in the state-owned China Daily newspaper.

Petrobras rose 1.1 percent to 33.07 reais as of 2:59 p.m. local time in Sao Paulo trading. The shares have fallen 34 percent in the past year.

Loan Negotiations

China became Brazil’s leading trade partner this year after the global recession choked sales to the U.S. China’s economy, the world’s third-biggest, expanded 6.1 percent in the first quarter, the slowest pace in almost a decade. The government introduced a $586 billion stimulus package in November to reach a target of 8 percent economic growth in 2009.

Brazil’s economy, Latin America’s largest, may contract by the most in 19 years as the global recession prompts domestic manufacturers to scale back output. The economy may shrink 0.49 percent in 2009, according to the median forecast of economists in a May 15 central bank survey that was published yesterday.

The China Development Bank also agreed today to lend Brazil’s development bank, known as BNDES, $800 million to bolster the bank’s cash amid the financial crisis. Brazilian Trade Minister Miguel Jorge said on May 15, speaking of the possibility of a loan, that it would be used “for general purposes and reinforces BNDES’ cash.”

Poultry and Pork

During Chinese President Hu’s visit to Brazil in November 2004, he and Lula signed agreements on investments and plans to expand the products China would buy from Brazil to include beef, poultry and pork. Four years later, three commodities -- soybean, iron ore and petroleum -- account for 80 percent of sales.

“Brazil now wishes to diversify its exports to China and attract more investments,” Lula wrote in the China Daily.

The nations are also working to coordinate financial policy matters and research ways to conduct trade in their respective local currencies, the yuan and real, Brazil’s Foreign Minister Celso Amorim said today.

The discussions are the latest signal that developing nations are seeking to reduce their reliance on a weakening U.S. dollar. Talks have been focused on improving financial service systems, Amorim said. They have yet to decide what currency to use, he said today in Beijing.

China PetroChemical Corp., the nation’s largest refiner, will also explore for oil in two areas in Brazil, Zhang Guobao, the head of the National Energy Administration, said before today’s signing ceremony in Beijing.

China also agreed on Feb. 17 to provide Russia with $25 billion of loans in return for 300,000 barrels a day of oil for 20 years. Venezuela’s Petroleos de Venezuela, known as PDVSA, will provide 200,000 barrels a day to the Asian country to pay down a $4 billion loan from China Development Bank Corp.

More auto cuts: GM will eliminate 1,100 US dealers

General Motors to eliminate 1,100 dealers nationwide on top of hundreds of cuts by Chrysler

• Dan Strumpf and Tom Krisher, AP Auto Writers
• On Friday May 15, 2009, 9:41 pm EDT

NEW YORK (AP) -- General Motors on Friday told about 1,100 of its dealers -- one in five -- that they would be dropped by late next year, adding to the economic pain radiating from the beleaguered Detroit automakers to cities and towns across the country.

Including Chrysler's decision a day earlier to eliminate a quarter of its own, about 1,900 dealerships -- many pillars of their communities and heavy advertisers for local media -- learned in a matter of 48 hours that they would be forced either to sell fewer brands or close altogether.

The GM dealerships will be eliminated when their contracts end late next year.

"We're 98 years old. We're two years from a hundred, and I don't want to go out at 99 years," said Alan Bigelow, whose family runs a Cleveland-area Chevrolet dealer that learned it was on GM's hit list.

While GM doesn't own the dealers, the company says its network is too big, causing dealers to compete with each other and giving shoppers too much leverage to talk down prices and hurt future sales.

Several hundred of the GM dealers knew already they were headed for closure, but most of them learned for the first time Friday. The National Automobile Dealers Association, an industry group, says the GM and Chrysler cuts combined could wipe out 100,000 jobs.

Both GM and Chrysler are scrambling to reorganize and stay alive in a severe recession that has pummeled car and truck sales for U.S. automakers, which had already been losing market share to foreign companies for decades.

Chrysler LLC is already in bankruptcy protection, and industry analysts say General Motors Corp. is making its cuts now in preparation for a bankruptcy filing June 1. The company says it would prefer to restructure out of court.

GM declined to reveal which dealers will be eliminated. Many dealers vowed to fight, first through a 30-day company appeal process, then possibly in court.

GM's dealers are protected by state franchise laws, and the company concedes it would be easier to cut them if it were operating under federal bankruptcy protection. GM says it's trying to restructure outside of bankruptcy because of the stigma of Chapter 11.

Chrysler dealers have fewer options because the company has already filed for bankruptcy protection, and federal bankruptcy judges generally trump state law. And Chrysler said on Thursday that its cuts were final.

GM outlined a plan to cut about 40 percent of its 6,000-dealer network by the end of 2010 in hopes of getting the company back on its feet. Besides the 1,110 dealership cuts, the company will shed about 500 dealerships that market the Saturn, Hummer and Saab brands, which GM plans to phase out or sell.

And when the surviving dealers' contracts are up in late 2010, GM will cut still more by not offering renewals to about 10 percent of the dealers who are left. Dealers could stay open selling used cars or other brands, but GM and Chrysler cuts will still leave cities across the U.S. with empty buildings, vacant lots and perhaps hundreds of thousands of dollars in lost tax revenues.

FedEx letters bearing the bad news began arriving Friday morning at GM franchises around the country. The letter states that dealers had been judged on sales, customer service scores, location, condition of facilities and other criteria.

While the targeted dealers represent about 20 percent of GM's total, they make only 7 percent of its sales, the company said.

The cuts will allow the surviving dealers to expand the size of their markets, so they have a better chance of staying healthy and attracting private investment, said Mark LaNeve, GM's North American vice president of sales and marketing.

"Over time, they just can't afford to invest in their business to the degree the competition has," LaNeve said.

Toyota, for example, generally has larger and newer showrooms and service departments than GM and Chrysler dealers -- making those dealerships more attractive to potential buyers.

The Obama administration's auto task force, which is overseeing the GM and Chrysler restructuring because both have received billions of dollars from the government, was aware GM would cut dealers, LaNeve said. But he stressed the company made the decision on how many and where.

Chrysler is aiming to close its nearly 800 dealers by June 9, and those outlets may try deep discounts to clear out their remaining inventory. But in the long run, prices for cars and trucks will probably rise for customers as dealerships disappear.

"No longer will people be able to shop between three or four dealers within 15 minutes of each other for the best cutthroat price," said Aaron Bragman, an automotive industry analyst with the consulting firm IHS Global Insight.

As GM and Chrysler lost market share to Japanese and other overseas brands, they ended up with too many dealers. So did Ford Motor Co., which has managed to stay healthier than either of its Detroit siblings.

In the 1980s, GM, Chrysler and Ford accounted for more than 75 percent of U.S. sales, but that dropped to 48 percent last year. GM alone held nearly 51 percent of the market in 1962, but only 22 percent last year.

Bigelow was stunned to get his termination letter. He said he believed the dealership was meeting all of GM's criteria to stay in business. He said sales had dropped in the recession -- but he didn't know of many dealers who were doing better.

Many of the dealership's 45 employees have been there for 30 years or more. He said they pledged to stay and fight the closing "until there's no more fight left."

The Bad Old Days are Here Again

Michael Pento
Posted May 14, 2009

Commodities are rising, the dollar is falling and the trade deficit is growing. Everything bad is good again, thanks to the Feds.

All of the pernicious factors that brought us to the brink of financial Armageddon are now once again returning and are still - amazingly enough--being embraced as both normal and healthy for the long term viability of the U.S. economy. Factors such as a strengthening U.S. dollar, shrinking trade deficit, a surging savings rate and falling commodity prices were all being viewed as the bane of the U.S. economy. And now, unfortunately, what had been the budding re-emergence of economic sanity is being obliterated by a killing frost thanks to the Fed and the Administration.

Despite whatever comes from their mouths, the most important goal of this government is to stop the slide in the stock and real estate markets. The major averages have rallied since their March lows because of the massive deficit spending and liquidity provided by our government. But the costs of providing market increases that are based solely on inflation are pyrrhic in nature.

The US dollar index hit a cyclical high of just over 89 in early March while the S&P 500 reached its cyclical bottom of 676.53 on March 9th. Today we find the S&P trading above 900 while the dollar has fallen below 83. This is a direct result of our government’s incorrect viewpoint that a strengthening US dollar is bad for trade and the economy. But the truth is that a strong currency is the backbone of a healthy economy and is essential for providing price stability and low interest rates.

As a direct result of this recession and the insipient desire on the part of the US consumer to save, we have seen the trade deficit cut in half over the past year. But right on cue, the trade gap in March rose for the first time in eight months to $27.6 billion from the February low print of $ 26.1 billion. Again, this is all part of the government’s plan to eschew savings and encourage consumption; its borrow-and-spend mantra of the past is being viewed as the panacea for the economy. In reality, savings provides the capital for investment and which leads to innovation and productivity increases - the only true method of growth.

And continuing with this theme of reflation, the Reuters Jefferies CRB Index made a triple bottom on March 3rd at 200. Today, the nineteen commodities in the index are trading at 242 - a 21% increase. How can the money printing policies of the Fed, which have caused the increase in energy and materials, be viewed as helpful for the consumer? Can oil priced at $58 a barrel be considered cheap and a sign of deflation? Does $920 for an ounce of gold presage the strengthening purchasing power of our currency?

The preceding data is not at all coincidental. There can be no mistake, the Administration and Fed are succeeding in their desire to re-inflate the bubble and have dragged us further away from what was the beginning of true and lasting healing in the U.S. economy.

It is true a rising dollar, increased savings and deflating asset prices are all painful in the short term for the economy and the consumer. But they are essential for the healing process of deleveraging to occur. By not allowing the process to consummate, the government is ensuring that when - not if - inflation returns, it will be impossible to vanquish without severely harming our already vulnerable economy.

A little Round-Up sprayed on the Green Shoots

Auto layoffs lift U.S. jobless claims, PPI up

• On Thursday May 14, 2009, 9:03 am EDT

By Lucia Mutikani

WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless benefits rose more than expected last week, government data showed on Thursday, pushed up by auto plant shutdowns related to Chrysler's bankruptcy.

Initial claims for state unemployment insurance benefits increased 32,000 to a seasonally adjusted 637,000 in the week ended May 9, the Labor Department said, reversing an easing trend of the previous two weeks.

A Labor Department official said "a good part of the increase is due to automotive states and claims."

The data, coming on the heels of a report showing a consumers were still reluctant to go out and shop, was another set back an economy trapped in recession since December 2007.

"I'm afraid a little Round-Up has been sprayed on the green shoots" of the recovery, said Lee Olver, fixed income strategist at SMH Capital in Houston, Texas.

U.S. stock index futures extended losses and U.S. government debt prices extended gains after the surprisingly weak jobless claims data. The dollar fell against the yen.

Chrysler filed for bankruptcy on April 30 to help it reorganize and shut its 30 plants starting May 1.

The job pace of job losses had shown signs of losing momentum in recent weeks and nonfarm payrolls dropped by 539,000 in April, the least amount since October, government data showed last week.

High unemployment is a drag on incomes, restraining consumption by households and stalling the economy's recovery.

The government said on Wednesday that retail sales fell 0.4 percent last month, a second straight monthly decline that tempered hopes the economy would soon pull out of its downturn.

WAL-MART PROFITS FLAT

On Thursday, Wal-Mart Stores Inc (WMT - News) reported that its profits were flat in the quarter ended April 30 as it managed to attract shoppers with its low prices.

Wal-Mart CEO Mike Dunn said the company, the world's largest retailer, would remain cautiously optimistic on the timetable for an economic recovery as long as unemployment was rising.

The Labor Department said the number of people staying on the benefit rolls after collecting an initial week of aid jumped 202,000 to a record high of 6.56 million in the week ended May 2, the latest week for which the data is available.

This was the 15th straight week that so-called continued claims touched a record high. The insured unemployment rate climbed to 4.9 percent, the highest since December 1982, from 4.8 percent the previous week.

The four-week moving average for new claims, considered to be a better gauge of underlying trends as it smoothes out week-to-week volatility, rose 6,000 to 630,500 last week from 624,500. This measure had declined for four straight weeks.

PRODUCER PRICES UP

In another report, the Labor Department said prices received by U.S. producers rose at a brisk pace in April, driven by a surge in food costs.

The Producer Price Index climbed 0.3 percent after declining 1.2 percent in March. Food prices rose 1.5 percent in April, the biggest increase since January 2008. Food costs rose on a record jump in egg prices, along with soaring prices for vegetables and meat.

Excluding food, the headline PPI would have increased 0.1 percent. However, compared to the same period last year, prices received by producers tumbled 3.7 percent, the biggest decline since January 1950, keeping the risk of deflation alive.

Core producer prices, excluding food and energy costs, rose 0.1 percent in April. The core PPI was unchanged in March.

Compared to the same period a year ago, core producer prices were up 3.4 percent.

Energy prices fell 0.1 percent in April versus a 5.5 percent decline in March. Gasoline prices edged up 2.6 percent in April and residential natural gas fell 6.2 percent.

Chrysler moves to eliminate 789 of 3,200 dealers

Chrysler files bankruptcy court motion to eliminate 789 of its 3,200 dealerships

• Tom Krisher and Dan Strumpf, AP Auto Writers
• On Thursday May 14, 2009, 11:43 am EDT

NEW YORK (AP) -- Chrysler LLC wants to eliminate roughly a quarter of its 3,200 U.S. dealerships by early next month, saying in a bankruptcy court filing Thursday that the network is antiquated and has too many stores competing with each other.

The company, in a motion filed with the U.S. Bankruptcy Court in New York, said it wants to eliminate 789 dealerships by June 9. Many of the dealers' sales are too low, the automaker said. Just over 50 percent of dealers account for about 90 percent of the company's U.S. sales, the motion said.

Dealers were told Thursday morning via United Parcel Service letter if they would remain or be eliminated. The move, which the dealers can appeal, is likely to cause devastating affects in cities and towns across the country as thousands of jobs are lost and taxes are not paid.

Chrysler spokeswoman Kathy Graham would not comment other than to say the company will notify dealers before speaking publicly. A hearing is scheduled for June 3 in U.S. Bankruptcy Court in New York to determine whether to approve Chrysler's motion.

Don Burk, co-owner of Heritage Chrysler Jeep in Ozark, Mo., said he found out that Chrysler plans to get rid of his dealership when he opened his UPS letter Thursday morning.

"Right now I'm processing the information," he said shortly after reading the letter. "I'm sure I'm going to get with my partner and we'll decide what to do from here."

The dealership, in a city of about 10,000 near Springfield, Mo., is involved in the community, sponsoring sports teams and even buying championship rings for the Ozark High School girls basketball team when it won the state championship several years ago, Burk said.

"If you're a good-sized business, kind of by default you're involved a lot," he said.

Chrysler dealerships aren't the only ones scheduled to get bad news this week. General Motors Corp. says it is notifying 1,100 dealers that it will not renew their franchise agreements when they expire at the end of September of 2010.

In its motion, Chrysler said it has many dealerships that sell one or two of its brands, with Chrysler-Jeep dealerships competing against Dodge dealers as well as other automakers' stores across the country.

"In addition, as suburbs grew and the modern interstate system continued to evolve, longstanding dealerships no longer were in the best or growing locations," the company said in its filing. "Many rural locations also served a diminishing population of potential consumers. Some dealership facilities became outdated. Other locations faced declining traffic count and declining populations."

Chrysler said in its filing that dealers are not competitive enough with foreign brands. Chrysler sold an average of 303 vehicles per dealer in 2008, according to its filing. By contrast, Honda Motor Co. sold about 1,200 vehicles per dealer, while Toyota Motor Corp. sold nearly 1,300 per dealer.

Chrysler said its dealer network "needs to be reduced and reconfigured in a targeted manner to strengthen the network and dealer profitability and to achieve optimal results for the dealers and consumers."

Chrysler has received $4 billion in federal loans and has been operating in bankruptcy protection since April 30. Its sales this year are down 46 percent compared with the first four months of last year and it reported a $16.8 billion net loss for 2008.

More Truth from Communists

"A policy mistake made by some major central bank may bring inflation risks to the whole world," said the People's Central Bank in its quarterly report.

"As more and more economies are adopting unconventional monetary policies, such as quantitative easing (QE), major currencies' devaluation risks may rise," it said. The bank fears a "big consolidation" in the bond markets, clearly anxious that interest yields will surge as western states try to exit their QE experiment.

Related Articles

• Gold rallies on inflation talk

• China is right to fear US dollar debauchery

• China calls for the reign of the dollar to end

• Bank of England: recovery to be V-shaped

• William Littlewood: 'Falls below the lows in March should not be ruled out'

Simon Derrick, currency chief at the Bank of New York Mellon, said the report is the latest sign that China is losing patience with the US and aims to diversify part its $1.95 trillion (£1.3 trillion) foreign reserves away from US Treasuries and other dollar securities.

"There is a significant shift taking place in China. They are concerned about the stability of the global financial system so they are not going to sell US bonds they already have. But they are still accumulating $40bn of fresh reserves each month, and they are going to be much more careful where they invest it," he said.

Hans Redeker, head of currencies at BNP Paribas, said China is switching into hard assets. "They want to buy production rights to raw materials and gain access to resources such as oil, water, and metals. They know they can't keep buying bonds," he said

Premier Wen Jiabao left no doubt at the Communist Party summit in March that China is irked by Washington's response to the credit crunch, suspecting that the US is engaging in a stealth default on its debt by driving down the dollar. "We have lent a massive amount of capital to the United States, and of course we are concerned about the security of our assets. To speak truthfully, I do indeed have some worries," he said.

401(k)s Hit by Withdrawal Freezes

By ELEANOR LAISE

Some investors in 401(k) retirement funds who are moving to grab their money are finding they can't.

Even with recent gains in stocks such as Monday's, the months of market turmoil have delivered a blow to some 401(k) participants: freezing their investments in certain plans. In some cases, individual investors can't withdraw money from certain retirement-plan options. In other cases, employers are having trouble getting rid of risky investments in 401(k) plans.

When Ed Dursky was laid off from his job at a manufacturing company in March, he couldn't withdraw $40,000 from his 401(k) retirement account invested in the Principal U.S. Property Separate Account.

That fund, which invests directly in office buildings and other properties, had stopped allowing most investors to make withdrawals last fall as many of its holdings became hard to sell.

Now Mr. Dursky, of Ottumwa, Iowa, is looking for work and losing patience. All he wants, he said, is his money.

"I hate to be whiny, but it is my money," Mr. Dursky said.

The withdrawal restrictions are limiting investment options for plan participants and employers at a key time in the markets. The timing is inconvenient for the number of workers like Mr. Dursky who are laid off and find their savings inaccessible.

Though 401(k) plans revolutionized the retirement-savings landscape by putting investment decisions in the hands of individuals, the restrictions show that plan participants aren't always in the driver's seat.

Individual investors mightn't even be aware of some behind-the-scenes maneuvers causing liquidity problems in their retirement plans. Many funds offered in 401(k) plans lend their portfolio holdings to other investors, receiving in exchange collateral that they invest in normally safe, liquid holdings.

The aim is often to generate a small but relatively reliable return that can help offset fund expenses. But in recent months, many of the collateral investments have gone haywire, prompting money managers to restrict retirement plans' withdrawals from the lending funds.

Some stable-value funds also are blocking the exits. These funds, available only in tax-deferred savings plans such as 401(k)s, typically invest in bonds and use bank or insurance-company contracts to help smooth returns. But in cases of employer bankruptcy and other events that can cause withdrawals, these funds can lock up investor money for months at a time.

Investors in the Principal U.S. Property Separate Account said they understood the risk of losses, but didn't think their money could be locked up for months or years. Most participants in the 15,000 plans holding the fund haven't been able to make any withdrawals or transfers since late September.

"To sell property at inappropriately low prices in order to generate cash for a few would hurt the majority of investors and violate our fiduciary obligations," said Terri Hale, spokeswoman for Principal Financial Group Inc., the parent of the fund's manager. The fund, which had $4.3 billion in net assets at the end of April, still is making distributions for death, disability, hardship and retirement at normal retirement age.

As of April 28, redemption requests that had yet to be honored totaled nearly $1.1 billion, or roughly 26% of the fund's net assets. Principal doesn't anticipate that it will make any distributions to investors who have requested redemptions until late 2009 or beyond, Ms. Hale said. Meanwhile, the fund continues to fall, declining 25% in the 12 months ending April 30.

Some investors have lost hope of recovering their money. Judith Sterner, a 69-year-old part-time nurse, had more than $12,000 in the fund when she tried to transfer that balance to a money market last fall. But her transfer was denied, and her stake has since declined to less than $10,000.

"This $12,000 represents a year of my retirement money that I don't have," said Ms. Sterner, of Morton Grove, Ill.

Principal still allows new investors into the fund. It categorizes the U.S. Property account as a fixed-income investment, alongside much stodgier funds holding high-quality bonds. New investors are warned of potential withdrawal delays, Ms. Hale said. As for the fixed-income categorization, she said, "a substantial portion of the account return is based on income streams from rents, and its returns have been comparable to fixed-income funds."

While the problems selling real-estate investments are relatively straightforward, withdrawal restrictions related to securities lending stem from far more obscure practices.

Funds often lend out portfolio holdings, through a lending agent, to other investors. These borrowers give the lender collateral, often amounting to about 102% of the value of the securities borrowed. Some of the collateral pools in which funds invest this collateral held Lehman Brothers Holdings Inc. debt and other investments that plummeted in value or became hard to trade in the credit crunch.

Though agents who coordinate funds' lending programs share in profits from securities lending, the risk of such collateral-pool losses falls entirely on the funds that have lent the securities and, ultimately, retirement plans and other investors holding those funds.

The problems have limited retirement plans' ability to get out of securities-lending programs, though participants' withdrawals generally haven't been affected.

Retirement plans offered to employees of energy company BP PLC last fall tried to withdraw entirely from four Northern Trust Corp. index funds engaged in securities lending. Certain holdings in Northern's collateral pools had defaulted, been marked down, or become so illiquid that they could only be sold at low values, according to a BP complaint filed in a lawsuit against Northern Trust.

The BP plans halted new participant investments in the funds and asked to withdraw their cash so it could be reinvested in funds that don't lend out securities.

But under restrictions imposed by Northern Trust in September, investors wishing to withdraw entirely from securities-lending activities would have to take their share of both liquid assets and illiquid collateral-pool holdings, according to a Northern Trust court filing. BP rejected that option, and the companies still are trying to resolve the matter in court.

Northern Trust's collateral pools are "conservatively managed" and focus on liquidity over yield, the company said.

State Street Corp. in March notified investors of new withdrawal restrictions in its securities-lending funds. Until at least the end of the year, plans can make monthly withdrawals of only 2% to 4% of their account balance, the notice said.

Plans wishing to withdraw entirely from lending funds will have to take a slice of beaten-down collateral-pool holdings.

"Given the current state of the fixed-income market, we felt it was prudent to put some well-defined withdrawal parameters in place," said State Street spokeswoman Arlene Roberts.

Write to Eleanor Laise at eleanor.laise@wsj.com