Chinese developers are facing the biggest liquidity test in more than four years, exacerbating challenges brought on by stringent funding restrictions and a prolonged profitability drop, Bloomberg News reported. Cash reserves of the nation’s 50 largest-listed home builders were just enough to cover short-term debt as of June 30, the least since 2016 when China began deleveraging its economy, according to recent earnings data compiled by Bloomberg. That metric fell below 0.5 for eight companies, the most in four years, signaling greater risk.

Finance minister Nirmala Sitharaman on Thursday asked banks and NBFCs to roll out loan restructuring scheme for COVID-19 related stress by September 15, and provide adequate support to the borrowers following the lifting of moratorium on repayment of debts, The Times of India reported. The minister urged lenders to immediately put in place a board-approved policy for resolution at the review meeting with heads of scheduled commercial banks and NBFCs through video conferencing.

Fraudulent transactions worth Rs 17,394 crore happened at debt-ridden mortgage firm DHFL during FY07 to FY19, according to transaction auditor Grant Thornton, Business Today reported. Earlier this year, the administrator of Dewan Housing Finance Corporation Limited (DHFL), appointed under the Insolvency and Bankruptcy Code (IBC), obtained assistance from Grant Thornton to conduct investigation into the affairs of the mortgage firm. Last year, the Mumbai bench of the National Company Law Tribunal (NCLT) had admitted the company for insolvency resolution.

Hospitality firms sitting on large debt piles are now looking to go for a one-time restructuring, with the moratorium period now over, Business Standard reported. On account of being highly leveraged, 15 per cent of the total 160,000 rooms —nearly 24,000 — are facing the risk of permanent closure, show industry estimates. The hospitality sector, by nature, has a high fixed cost structure and the lockdown led to significant erosion in revenues and margins. The industry now has its eyes set on the recommendations of the KV Kamath Committee.

The Securities and Exchange Board of India (Sebi) Wednesday allowed mutual funds to side pocket debt in cases where borrowers have approached the Asset Management Company (AMC) for debt restructuring, Mint reported. Earlier, SEBI rules only permitted debt downgraded below investment grade (rating below BBB-) or defaulted debt to be restructured. The new circular, which will be in effect till 31st December will allow even higher rates debt to be side pocketed. The date on which the restructuring proposal is received by the AMC is to be treated as the trigger date for side pocketing.

A selloff in the Thai baht, underperforming stocks and pressure on the bond market reflect growing concern from global investors over political instability and the growth outlook in Southeast Asia’s second-biggest economy, analysts and fund managers say, Reuters reported. Thailand suffered its deepest economic contraction in two decades last quarter and a long haul to recovery looms as the COVID-19 pandemic has hammered its mainstay tourism industry.

Laos faces a growing risk of debt distress and sovereign default, according to credit rating agencies and economic advisers, as coronavirus and a debt-laden power sector take their toll on one of Asia’s poorest countries, the Financial Times reported. The country’s foreign exchange reserves have fallen below $1bn, less than Laos’ annual debt payments, and ministry of finance officials have asked China, the country’s biggest creditor, for advice on a possible restructuring, the Financial Times has learnt. Moody’s Investors Service last month downgraded Laos’ issuer rating a

Fitch Ratings has downgraded Indonesia-based developer PT Modernland Realty Tbk's (MDLN) Long-Term Issuer Default Rating (IDR) to 'C' from 'CC,’ Fitch Ratings reported. Fitch has also downgraded the rating on the USD150 million notes due 2021 and USD240 million notes due 2024 issued by its wholly owned subsidiaries, JGC Ventures Pte. Ltd. and Modernland Overseas Pte Ltd, respectively, and guaranteed by MDLN, to 'C' from 'CC'. The Recovery Rating on the notes remains at 'RR4'.

While the new board of IL&FS and the directors appointed by it on the subsidiaries of Infrastructure Leasing & Financial Services Limited (IL&FS) have immunity from prosecution in India for the actions of the group in the past, they may not have the same protection in cases filed against the group firms outside the country, The Indian Express reported.

Factories across Europe, Asia and North America continued to shake off the coronavirus gloom in August as the global economy emerged from a downturn triggered by the health crisis, thanks in part to massive fiscal and monetary stimulus programmes, Reuters reported. Surveys showing an expansion in manufacturing activity may reduce pressure on policymakers to take bolder steps to avert a deeper recession. J.P. Morgan’s measure of global manufacturing activity rose to a 21-month high of 51.8 in August from 50.6 in July, the second straight month above the neutral reading of 50.