Daily Insolvency News Headlines

Mon., January 26, 2015

Mon., January 26, 2015

Perhaps more than any other financial figure, Mark Carney has the job of ensuring that the world’s largest banks are no longer a great danger to the economies in which they operate, the International New York Times reported. Mr. Carney, who is attending the World Economic Forum here, is governor of the Bank of England. But he is also the chairman of the Financial Stability Board, a powerful group that is made up of financial regulators from around the world. After the financial crisis of 2008, when governments had to bail out their biggest banks, the board agreed on policies that later provided much of the foundation for banking overhauls in individual countries. The board’s goal was not only to make large financial institutions more stable. It also wanted to make it possible for the authorities to wind down large banks in a way that would not create panic across the global financial system – and not require taxpayer money. The hope was that such efforts would end “too big to fail,” the description given to banks that are so large that the government would be forced to bail them out to stop their collapse from imploding the wider economy. And last November, Mr. Carney said that an agreement on a batch of regulations had created “a watershed in ending too big to fail.” He added, “These agreements will play important roles in enabling globally systemic banks to be resolved without recourse to public subsidy and without disruption to the wider financial system.” But many financial specialists have their doubts. Read more. (Subscription required.)

Mon., January 26, 2015

Fears that thousands of homeowners are facing repossession ahead of an election has prompted Taoiseach Enda Kenny to call in the head of the State Insolvency Service for a meeting on Wednesday. There is concern in Government that few debt deals between banks and homeowners are being done, leaving those in arrears vulnerable to having their homes taken from them, Independent.ie reported. Some 30,000 homeowners have received letters from their banks threatening repossession. These arrears cases could end up swamping the courts just as an election is called, in 2016. Only 1,000 debt deals were done in the first year of operation of the State Insolvency Service, with half of these bankruptcies. There has been widespread criticism of the Insolvency Service as it has got off to a very slow start. Now head of the service Lorcan O'Connor and five of the most active personal insolvency practitioners (Pips) in the country are set to meet Mr Kenny on Wednesday afternoon. Read more. (Subscription required.)

Mon., January 26, 2015

Towards the end of last year, it was announced that the UAE’s long anticipated reform of the insolvency reform bill was reaching its final stages prior to implementation, Emirates 24/7 reported. The legal framework was drawn up following the establishment of the Dubai World Tribunal that resulted from its inability to pay its creditors in November 2009. The case cast spotlight on the UAE, which until today does not have an officially passed insolvency bill that helps local businesses as well as international investors. The end of 2013 had finally seen the UAE move a step closer to implementing this reality, with the referral of a revised draft of the legislation to the Ministry of Justice and is only awaiting approval. The event was proceeded by an almost 12-month-long discussion on the subject and its intricacies with representatives of the local government of all seven emirates. To date, however, it is unclear whether the new law will be enacted and since the end of 2013 no further progress updates have been heard. What has been made public since has been seen as slight criticism relating to the applicability of the legislation, mentioning that it is likely more applicable for smaller companies and would possibly be bypassed by any larger companies that are attempting to restructure their debt. Read more.

Mon., January 26, 2015

Offshore bond sales by mainland property developers have stalled in January as rising investor fears of a flurry of debt defaults have junked one of the usually busiest months of the year for real estate issuance, South China Morning Post reported. With an estimated US$10 billion in offshore debt falling due for repayment this year and next, a bad January bodes ill for the ability of developers to refinance huge foreign borrowings. "Offshore refinancing will become more difficult and expensive for mainland developers this year and weaker players will suffer even more," Christopher Yip, a director of corporate ratings at S&P in Hong Kong, told the South China Morning Post. Defaults by Kaisa Group Holdings are the main reason why investors are spooked. First Shenzhen-based Kaisa failed to repay a HK$400 million loan to HSBC at the end of last month and then defaulted earlier this month on the interest on senior notes due in 2020 after local authorities banned it from selling some projects in the city bordering Hong Kong. It was then that offshore investors realised that they ranked behind everyone else in the queue for repayment after onshore creditors asked for court protection to freeze Kaisa's assets on the mainland. Foreign bondholders are now watching closely how Kaisa and the Shenzhen government resolve the situation. The developer is still seeking a financial adviser. Read more.

Mon., January 26, 2015

Troubled Chinese property firm Kaisa Group is talking to banks and rival developers about selling its assets as the company scrambles to raise cash, according to people with knowledge of the matter. A number of developers have approached the company about possibly buying some of its holdings, said one person. "Banks, developers, Shenzhen government want this to happen," said another. The Wall Street Journal reported on Friday that developers speaking to Kaisa include China Vanke and Shenzhen Overseas Chinese Town. Shenzhen Overseas and China Vanke could not be reached for comment. Kaisa failed earlier this month to make a $26 million interest payment on its bonds due to mature in 2020. It is now in a grace period, and has until Feb 9 to pay that coupon or else become the first Chinese real estate firm to default on its offshore debt. The missed payment came after a string of bad news for the company, including the local government in Shenzhen blocking sales at some of its development projects and the abrupt resignation of its chairman and a number of executives. Adding to Kaisa's woes is the fact that holders of its convertible bonds, due to expire in December, will get the option during February to demand an early repayment. Read more.

Mon., January 26, 2015

Governor Haruhiko Kuroda says the Bank of Japan may need to get creative in any further monetary stimulus. Among options analysts highlight: regional-government bonds, a type of security that could aid public support. Kuroda, speaking in an interview with Bloomberg Television Friday in Davos, Switzerland, said “there are many options and I don’t think it’s constructive to say this or that could be done.” He reiterated that if inflation expectations are “seriously” affected by disinflation, policy can be changed. The bulk of the central bank’s record asset buying is currently concentrated in debt issued by the national government, yields on which have been pulled down toward zero, even on 10-year notes. BOJ officials had different views on how much capacity there was to expand the purchases, people familiar with the discussions said last month. Read more.

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