"UnionLeader" quotes Kollsman as saying that it and Elbit Systems have a solid track record in exactly the type of security system Homeland Security might want, and that Elbit Systems provided a border control and management system to the IDF Border Security Program known as the Long-Range Reconnaissance and Observation System (LORROS), which the company believes is the best in the world.

"Union Leader" quotes Elbit Systems VP government relations Donald Goff as saying, "Which country has the most secure border? It's Israel." He added that Boeing selected Kollsman to be part of its team to provide detection and surveillance systems because of its proven record of work as a worldwide provider to commercial and military markets of advanced electro-optical and avionics systems.

"UnionLeader" says other members of the Boeing-led consortium include DRS Surveillance and Reconnaissance Group, L-3 Government Services Inc., Perot Systems, and Unisys Global Public Sector.

Goff told "UnionLeader" that the contract would be for three years, with an option for three additional years and that the deadline to submit proposals for SBInet was May 30. He added that he expected the number of competitors to be cut to two by mid-September and the contract would be awarded before the end of September.

"UnionLeader" reports that, in addition to the Boeing consortium, Lockheed Martin Corp. Raytheon Co. (NYSE:RTN), Northrop Grumman Corp. (NYSE:NOC), and Ericsson Inc. (Nasdaq: ERICY; SAX: ERIC) are leading teams competing for the SBInet contract.

The technology sector has been particularly affected in terms of deals withdrawn or postponed, with 10 deals pulled this year to date.

This month alone, seven deals have been pulled across a range of sectors: the largest being the planned $1.9bn float of Telemar, the Brazilian telecommunications company.

Some companies have chosen to proceed with planned public stock offerings, despite the challenging conditions, with varying degrees of success.

Infineon, Europe's second-largest semiconductor maker, was recently forced to slash the size of the partial float of Qimonda, its memory chip unit, on the New York Stock Exchange. At $546m it was down from an expected figure of more than $1.1bn. The company cited challenging market conditions and uncertain investor sentiment. Even at the reduced size, it was the largest float by a non-US company on the NYSE this year.

Cowen Group, the investment banking unit being spun out of Société Générale, the French bank, saw its shares tumble by 5.25 per cent on its Nasdaq debut last month.

Some 47 deals came to the market during the second quarter this year, raising a combined $10.3bn, according to IPO research firm Renaissance Capital.

The best week for issuance this year was May 22-28 when MasterCard staged its $2.6bn float. MasterCard is the only company of the top 10 IPOs by size to have listed in the US this year. Many overseas companies have opted to float their shares in their home markets or in London because of concerns about the stiff regulatory regime in the US.

Analysts said that ratings agencies would upgrade Russia's sovereign rating after the clearest sign yet of President Putin's determination to use the soaring value of Russian oil to clean up his country's reputation on the financial markets.

The move knocked about a third off the country's foreign debts, which previously stood at $70 billion.

Russia had been due to pay off the debts by 2020, but the sharp rise in the price of oil has engineered a dramatic improvement in the country's fortunes. That enabled it to bring the repayment forward, at an estimated saving of $12 billion.

Under the terms of a deal agreed in June, Russia also agreed to pay a premium of $1 billion to compensate the creditors for lost interest.

In its budget provisions, Germany, the biggest creditor, had allowed for the debt to be unpaid until 2015.

Mr Putin said: "We used to live with our hand held out for many years . . . but now the Russian economy cannot only repay debts but do so ahead of time."

The Finance Ministry said that the repayment would reduce Russia's foreign debts as a share of GDP to just 9 per cent. "The early repayment to creditor nations was made possible by growth in the economic and financial might of Russia," it said.

"Repaying the entire sum . . . will facilitate a strengthening of Russia's international authority as a state with significant financial reserves and stable borrowing."

Christopher Green, senior economist at the Moscow Narodny Bank in London, said that the move had political implications as well as making economic sense. "It reflects the emergence of Russia as an economy on to the global stage," he said.

Russia, the world's second- largest oil exporter, has enjoyed a marked turnaround in its fortunes since its $40 billion domestic debt default and rouble devaluation in 1998.

At that time the price of oil was below $13 a barrel, compared with nearly $72 a barrel yesterday.

Two years ago, Russia set up a budget stabilisation fund to insulate it against fluctuations in the price of oil.

Over the past year the country has redeemed more than $40 billion of debts.

In another sign of strength, the rouble was made fully convertible at the start of July, six months ahead of schedule.

Following the repayment, Standard & Poor's and Moody's, the ratings agencies, are widely expected to grant Russia an upgrade. Moody's rates Russia Baa2 while S&P rates it BBB. Fitch upgraded the country last month to BBB+.

Mr Green said: "To a large extent, the profile of economic activity in Russia will depend on oil prices. Going forward, you are probably likely to see further improvements. This is a very favourable time for Russia."

FALL AND RISE

August 1998: after months of pressure on the nation's currency, Russia announces devaluation of the rouble and suspension of the market in government bonds. Shares plunge and Russia announces default on its $40 billion foreign loans, which date back to the Soviet era

March 2000: Vladimir Putin elected President

2004: Russian Stabilisation Fund established

August 2005: Russia pays off $15 billion of Paris Club debts

July 2006: Rouble becomes convertible currency

August 2006: Russia pays off remaining $22.5 billion Paris Club debts

# Paris Club debts written off include Germany ($7.7bn), France ($1.8bn), Finland ($300m), Denmark ($120m), Switzerland ($65m) as well as debts to Australia, Austria, Belgium, Canada, Italy, Japan, the Netherlands, Spain, Sweden, UK and US

Schwarzenegger, a fiscal conservative and ally of business groups concerned about the cost of doing business in California, said the state economy had recovered and companies could afford to pay minimum-wage workers more.

"I have always said that when the economy was ready, we should reward the efforts of California's hard-working families by raising our minimum wage," he said in statement.

The agreement would benefit low-paid workers, said Assembly Member Sally Lieber, a Democrat who had advanced a minimum wage bill earlier this year. "We have a moral obligation to ensure that the minimum wage keeps pace with federal poverty guidelines. This bill does that," she said.

Business groups and labor unions were not pleased by the agreement, which Democratic lawmakers can pass without votes from minority Republicans.

"We appreciate the governor's opposition to indexing the minimum wage and not walking into automatic increases, but we still oppose increasing the minimum wage," said Michael Shaw, an officer of the National Federation of Independent Business, a small-business advocacy group. "It takes away resources from business owners, who are in the best position to decide how to invest in their companies."

Art Pulaski, secretary-treasurer of the California Labor Federation, said the state's AFL-CIO could live without an inflation-adjusted minimum wage over the near term.

"We realize that from a Republican governor who is so close to big corporations ... that we would never get him there," Pulaski said. "Fortunately, it's an election year, so we leveraged that to push him to do something."

Schwarzenegger is running for re-election against Democratic challenger and state Treasurer Phil Angelides, who is favored by unions, and is moving to improve his standing with Democrats and independent voters who turned against him in a controversial special election he called last year.

The Hollywood icon signed a bill on Monday that aims to make California one of the world's biggest producers of solar energy and is in talks with lawmakers on a bill to cap industrial emissions of greenhouse gas, popular ideas in a Democrat-leaning state where environmental issues rank high with voters.

Angelides said in a statement he would back an inflation-adjusted minimum wage.

"After three years of denying Californians the minimum wage increase they deserve, Governor Schwarzenegger is now trying to save his own job by giving minimum support to the minimum wage," Angelides added.

"It's very important for people to know their coverage is continuing," he said. "There's no disruption at all."

Medicare officials say they caught the glitch just after the checks were sent out last week. As a result, they sent a second letter Tuesday letting people know about the problem. The average overpayment comes to about $215.

About 5 million people pay their monthly premiums for Medicare drug coverage by having the government withhold the money from their Social Security check.

McClellan said his agency will make sure that insurers who administer the new drug benefit continue to get paid for the beneficiaries caught up in the error. He said that his agency was responsible for the error and that the subsequent letter contains an apology.

The error occurred as McClellan's agency updated the
Social Security Administration about various changes in coverage that beneficiaries had requested. For instance, beneficiaries contact CMS because they want to switch plans or change how they pay their monthly premiums. CMS contacts Social Security officials because the changes often require an adjustment in the amount deducted from a beneficiary's checks. In this instance, the wrong information was transmitted, McClellan said.

McClellan also said that beneficiaries need to know the government won't be able to start making monthly premium deductions again until October.

He said the agency will work with beneficiaries who face a money crunch in the fall because they had already cashed the check from the Social Security Administration or because they can't afford to have premiums from a few months deducted from one Social Security check.

"The amounts involved here are generally not large, but we want to make sure that as we account for these extra payments, we do it in a way that's not burdensome," McClellan said. "There are a number of approaches we can take, including doing (repayment) over time if necessary when it's not a trivial amount of money for the beneficiary."