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In Canada, concern over housing market

BY HBSDEALER Staff

Canadian economists have expressed concerns about a correction in the housing market north of the U.S. border, where record borrowing, low interest rates and eager home buyers have created a building boom over the last several years.

An article in the Wall Street Journal quoted David Madani, Canada economist at Capital Economics, predicting a 25% drop in home prices over the next three years because of the ratio of house prices to disposable income  in Canada. Others worried how long interest rates — and mortgage payments — would remain low.

According to the Canadian Real Estate Association, home prices rose 8.8% in February compared with the year before. Both the Canadian government and the central bank are taking measures to cool off the market, according to the article, by eliminating risky lending practices that could laden consumers with unmanageable debt. The Canadian government backs most mortgages, and lending standards are generally tighter than those of the United States before the housing meltdown.

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Paul Menard: Heir apparent?

BY HBSDEALER Staff

Paul Menard, a NASCAR driver who also happens to be the son of Menards founder John Menard, reflected on his racing career and strict upbringing in an interview with USA Today.

Although his father has yet to name a successor to his 250-plus chain of home improvement stores, the self-made billionaire assigned the younger Menard a variety of store-related jobs as he was growing up, from managing flight plans for the company’s corporate jets to building endcaps and stapling receipts to rebate forms. 

Two years ago, Paul Menard said he spent his Christmas vacation driving a forklift around a Menards distribution center in Chicago, “learning the ropes.” He also holds a seat on the board of directors at Menards.

For now, Paul Menard is content to drive the bright yellow No. 27 Chevrolet bearing the company logo. He is now ranked fifth on the NASCAR circuit. "We’re a racing family," he told USA Today. "[You’re] expected to run well. You did your job. If you don’t, it’s, ‘What the hell you doing?’ "

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Home Depot accelerates stock buy-back

BY HBSDEALER Staff

A "stabilized business" has paved the way for an accelerated stock buy-back program at Atlanta-based The Home Depot. 

The home improvement giant announced the pricing of a $2 billion senior note issuance to refinance $1 billion of senior notes that came due in March 2011 and to repurchase $1 billion of outstanding shares through an accelerated share repurchase program with Barclays Capital. 

The accelerated share repurchase is in addition to the company’s previously announced intention to repurchase approximately $2.5 billion of outstanding shares throughout 2011 using excess cash generated by the business.

"Creating strong shareholder value is a priority, and we are committed to returning capital to our shareholders in the form of dividends and share repurchases," said Frank Blake, chairman and CEO, in a prepared statement. "2010 was the first year of positive sales growth since 2006, and our business continues to stabilize. As such, we elected to take advantage of the attractive interest rate environment and raise incremental debt capital to be used for share repurchases."

In February 2011, the company announced a 6% increase in its quarterly cash dividend to 25 cents per share. As of the end of fiscal 2010, the company had $9.9 billion remaining in its share repurchase authorization.

 

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