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UPDATE 1-Renold H1 sales up, says to double FY operating profit

* Shares up 6 percentOct 18 (Reuters) - British industrial chain maker Renold's first-half sales were buoyed by a strong performance across all its regions despite difficult trading conditions, and the company said it would double its full-year operating profit in line with market expectations.Renold's shares, which have shed about 18 percent over the past month, were up 6.3 percent at 27.25 pence at 0935 GMT on Tuesday, making it one of the top gainers on the London Stock Exchange.The company, whose products are used in transportation, steel and mining industries, also said it planned to implement a number of cost cutting measures to offset the impact of economic uncertainties.Renold said the cost cuts would help protect its full-year results against the impact of unforeseen reductions in sales growth during the second half."Given the ongoing macro economic uncertainty in many of the world's major economies, the group has accelerated a number of planned cost reduction initiatives," the company said in a statement.Renold said incremental sales drove operating profit in the first half, with underlying sales up 13 percent from last year. Order intake rose 3 percent from last year.The company also said forward order book visibility for the third quarter was up from the year-ago period.Analysts on an average were expecting the company to post a pretax profit of 11.6 million pounds on revenue of 208.5 million pounds for the year ending March 2012, according to Thomson Reuters I/B/E/S.

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RLPC-Polkomtel mulls more loans to replace bond

Raising new loans would take further pressure off the banks to sell the 1.75 billion zloty ($562 million) bond as credit market conditions for high-yield issuers remain difficult.Credit Agricole, Deutsche Bank, Royal Bank of Scotland, Societe Generale and PKO BP underwrote the bridge to bond in July to back Polkomtel's buyout by Polish billionaire Zygmunt Solorz-Zak.The bookrunners are sounding out other banks to see how much in term loans they can raise in addition to the 1.9 billion euro ($2.6 billion) equivalent they already raised in August, the sources said.At the time, the loan attracted strong demand from Polish and other international banks, despite the difficult market conditions over the summer due to worsening euro zone sovereign debt crisis.The loan was twice oversubscribed, with almost 25 other banks joining the transaction, following an upsize of 300 million euros, according to Thomson Reuters LPC data.In addition to the 1.75 billion zloty secured bridge to bond and the 1.9 billion euro senior term loans, the total debt package also includes a 900 million euro subordinated bridge to high-yield bond and a 352 million euro Payment-in-Kind (PIK) note, according to Thomson Reuters LPC.The PIK could be reduced by around 125 million euros after an investment from The European Bank of Reconstruction and Development (EBRD), which is pending approval.Polkomtel couldn't immediately be reached for comment. ($1 = 3.112 zlotys) ($1 = 0.725 Euros)

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UPDATE 1-France will not use EFSF capital for its banks- spokesman

Pecresse, who is also France's budget minister, said the French government would only step in if banks that were revealed to have a capital shortfall in upcoming stress tests were not able to raise capital from private investors.That seemed to signal a change of position by President Nicolas Sarkozy's government, which was understood to be wary of committing state funds to recapitalising banks because of the risk to its AAA credit rating and to prefer the use of the European Financial Stability Facility (EFSF).The euro zone's July 21 agreement to allow the 440 billion euro EFSF to be used to recapitalise banks is still pending ratification by the last parliament in the 17-nation bloc, after Slovakian legislators initially blocked it on Tuesday."Once the July 21 agreement is approved the fund can be used to recapitalise banks, but France will not make use of the EFSF," Pecresse told a news briefing after a cabinet meeting which approved legislation on a state bailout of troubled Franco-Belgian lender Dexia .The law will call for France to guarantee up to 33 billion euros ($45 billion) in interbank and bond borrowing by Dexia and its Dexia Credit Local unit which provided the municipal government loans. Credit ratings agencies have said the move has no negative repercussions on France's AAA rating.France's government was confident that a second vote by the Slovakian parliament would approve modifications to the EFSF "very soon", Pecresse said, echoing similar comments by Foreign Minister Alain Juppe on Wednesday.Regarding the level of capital required of banks, Pecresse said that Europe would adopt a common rule, which would be announced at an EU leaders summit on Oct. 23."Today we have no doubt about the solidity of French banks but there is turbulence on financial markets which means an increase in capital for European banks has become necessary," she said.Paris was thought to prefer the use of the EFSF as a fallback option if private capital was not forthcoming, in contrast to Berlin which wants national governments to shoulder the burden.At a meeting on Sunday with German Chancellor Angela Merkel, however, Sarkozy said there was complete agreement between Germany and France on how to proceed, without providing any further details.Sarkozy has made retaining the AAA, which ensures France borrows at rock-bottom rates on the market, a top priority but with economic growth slowing and elections looming in April, analysts have said his room for manoeuvre is narrowing.

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PIMCO fund's cash equivalents drops to negative 19 percent

Equally noticeable was the Total Return Fund's dramatic drop in cash equivalents and money market securities of negative 19 percent in September from negative 9 percent in August, the website showed.PIMCO officials declined to comment.The $245 billion Total Return fund did not adjust its exposure in its Government-Treasury category, which includes U.S. Treasury notes, bonds, futures and inflation-protected securities.It remained at 16 percent for a second consecutive month as of the end of September, the PIMCO website said. The fund held 10 percent as of the end of July.In late August, Gross said the precipitous decline in Treasury yields reflected a high probability of recession. The yield on the benchmark 10-year U.S. Treasury note then dropped below 2 percent to 1.98 percent.On Tuesday, the 10-year yield stood at 2.16 percent.Last week, Reuters asked Mohamed El-Erian, who shares the title of co-chief investment officer with Gross, if the United States was in a recession. He answered with one word: "Yes."