Business Digest

BANKS DETAIL RISKS: Wachovia Corp.'s off-balance sheet risks totaled $228-billion at the end of 2001, the company said in its annual report. Rival Bank of America Corp. said in its annual report that its total off-balance sheet risk is about $340-billion. The disclosures come at a time when investors are studying corporate finances more closely in light of Enron Corp.'s collapse.

CONSECO SHARES SLIDE: Shares of Conseco Inc. fell 16 percent on news the the life insurance and finance company was asking its bondholders to swap their senior notes for new notes with maturity dates of up to 21/2 years later. The new notes would receive a higher priority in repayment should the company go under, a condition that was meant to entice bondholders, but that served to spook stockholders who typically get nothing if a company folds. Stock of Conseco fell 65 cents to $3.40.

BOFA COMPUTER PROBLEM: Bank of America Corp. said a programming error delayed direct deposit transactions that should have credited some customer accounts in California, Nevada and Arizona on Friday. A spokesman said the bank solved the computer problem and credited the accounts over the weekend. The bank doesn't know how many customers were affected or how widespread the problem was.

TREASURY AUCTION: Interest rates on short-term Treasury securities rose in Monday's auction. The Treasury Department sold $13-billion in three-month bills at a discount rate of 1.84 percent, up from 1.825 percent last week. An additional $13-billion was sold in six-month bills at a rate of 2.07 percent, up from 2.02 percent. The new discount rates understate the actual return to investors: 1.874 percent for three-month bills and 2.12 percent for a six-month bill. In a separate report, the Federal Reserve said Monday that the average yield for one-year constant maturity Treasury bills rose to 2.58 percent last week from 2.41 percent the previous week.

PLANVISTA ISSUES SHARES: PlanVista Corp. of Tampa, in an effort to appease lenders, has issued about 28,600 shares of convertible preferred stock to various creditors to reduce $28.6-million of debt. The issuance took place without stockholder approval because executives said they feared a delay would "seriously jeopardize the financial viability of the company." Once the shares are converted to common stock in a minimum of 18 months, the lenders will own 51 percent of the health care technology company. PlanVista also said it had received an extension on debt restructuring until March 29. PlanVista was once part of HealthPlan Services, which was acquired in June by an investment company in Boca Raton.

PUTNAM CUTS FUND OFFERINGS: Putnam Investments, the nation's fourth-largest mutual fund company, said it is eliminating 11 of its 66 funds after sales and returns lagged. The unit of Marsh & McLennan Cos. said it aimed to lift performance by concentrating resources on fewer funds. The funds being closed or merged have assets of about $5-billion. Putnam manages $303-billion. Putnam's revenue fell 19 percent last year as its assets under management tumbled from $370-billion.

LATE FEES ON THE RISE: Several of the nation's biggest credit-card issuers have sharply raised the penalty fee they charge consumers who pay their bills late to $35 a month, shattering the industry's previous norm of about $29. That represents an increase of nearly 21 percent in late fees. Consumer groups complain that the fees far exceed the issuers' actual cost and hit customers who can least afford to pay. The fee increases follow a year in which the credit-card issuers enjoyed their highest profits since 1992, according R.K. Hammer, a investment banking firm in Thousand Oaks, Calif.

AVON TO CUT 3,500 JOBS: Avon Products Inc. said it will fire 3,500 employees, or about 8 percent of the work force, as the company scales back manufacturing to cut costs. The dismissals will take place mainly in factories and distribution facilities this year and next, Avon said in a filing with the Securities and Exchange Commission. Avon last month said it would close a jewelry plant in Puerto Rico with 320 workers. Other closings haven't been disclosed. The job cuts won't affect Avon's 3.5-million door-to-door sales people, who are considered independent contractors, the company said. Avon shares fell 1 cent to $54.06.

LAW FIRM PONDERS PAY CHANGE: Holland & Knight is considering significant changes to the way it pays and promotes its youngest lawyers and has temporarily frozen their salaries. Rob Rhodes, deputy managing partner of the 1,250-lawyer firm, which originated in the Tampa Bay area, said management wants to move away from a "lock step" system that bases salary on tenure, and instead adopt one based more on performance. He also said the firm is considering making associates wait longer than the current seven years to become non-equity partners. Managing partner Bob Feagin will make the final decision, which is expected by the end of April. Rhodes denied that the purpose of the proposals was to cut costs at a time when law firm revenue growth is slowing.

Correction

Claiming a boyfriend or girlfriend as a dependent won't pass muster with the IRS if you live in Florida. A column Sunday was incorrect on that point. Even if other dependency tests are met, the IRS disqualifies the claim for an exemption if the relationship is illegal under local law. In Florida, it remains a second-degree misdemeanor for an unmarried man and woman to "lewdly and lasciviously associate and cohabit together."

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