Latin America nuclear pact signed

Energy dominated the first of two days of talks between the leaders

Argentina and Brazil have agreed to build a joint nuclear reactor to address looming energy shortages.

The agreement came as part of a plan by South America's two biggest economies to extend defence and energy projects.

It was announced after talks in Buenos Aires between Argentine President Cristina Fernandez and her Brazilian counterpart, Luiz Inacio Lula da Silva.

Brazil would export electricity to Argentina in the winter months ahead amid shortage fears, Mr Lula said.

"We're going to launch a satellite jointly and develop a nuclear project," said Mr Lula.

He added that the venture would "serve as an example in this world, ablaze with the temptation to build up arms and with political and ideological intolerance".

Each country currently has two operating nuclear plants, and both have signed the Nuclear Non-Proliferation Treaty.

Bolivian gas dispute

The two leaders see the joint nuclear project as a way to increase energy supply while raising their profile on the international stage,.

But while energy issues dominated the first of two days of talks, the two presidents did not refer directly to a dispute over the ratio of Bolivian gas supplied to the two countries.

La Paz currently prioritizes its exports to Brazil, its biggest client, which imports 30 million cubic metres of Bolivian natural gas per day.

Argentina imports a maximum of 7.7 million cubic metres per day from Bolivia, and would like a bigger share.

There are fears it could suffer from acute energy shortages during the southern hemisphere's winter months ahead.

It is hoped the issue will be resolved during a joint meeting with Bolivian President Evo Morales on Saturday.

Plug is pulled on Blackstone deal

Conditions for private equity buyouts are becoming trickier

A company that private equity firm Blackstone was aiming to buy for $1.8bn (£908m) has ended the deal on the basis that its suitors could not raise funds.

Blackstone and industrial giant General Electric (GE) agreed in March last year to buy PHH, a US provider of mortgages and fleet management services.

But PHH said the sale had been terminated because it could not be completed by 31 December as agreed.

In the wake of the credit crisis, funding deals has become much harder.

In recent years, firms such as Blackstone have used cheap credit from banks to fund a takeover spree that has pushed up stock markets and thrust the private equity sector into the spotlight.

We regret that the banks are now unwilling to provide financing under the terms they originally agreed to Blackstone spokesman

But higher interest rates and record mortgage defaults in the US sub-prime sector means cheap credit is now harder to access.

PHH has requested a $50m termination fee from Blackstone, citing the terms of the arrangement.

Disappointment

A successful deal would have seen GE buying PHH, retaining its fleet management services business, and then selling its residential home loan unit to Blackstone.

Mr. AB Krongard, non-executive chairman of PHH, said he was "disappointed" that the transaction could not be completed.

Blackstone expressed similar sentiments, blaming the banks, which included JP Morgan and Lehman Brothers.

According to Blackstone, the lenders had previously agreed to provide loans to support the deal but reneged on the terms of the financing arrangement.

"Blackstone was prepared to close its end of the transaction using the financing that in March was originally committed to be made available," spokesman John Ford said in an email to Reuters.

"We regret that the banks are now unwilling to provide financing under the terms they originally agreed to."