ZZ Capital International Ltd., the private equity firm controlled by Chinese shadow-banking tycoon Xie Zhikun, is preparing to dramatically scale back its operations, according to people familiar with the matter. A number of senior executives at the Hong Kong-based fund, including at least two seasoned dealmakers brought in from global advisory firms, are currently negotiating severance packages, the people said, asking not to be identified because the discussions are private, Bloomberg News reported.

This might be the year China gets its first four-letter default. Or so says S&P Global Ratings, discussing the possibility that an LGFV, or local government financing vehicle, could finally go belly-up, Bloomberg News reported in a commentary. Why should global investors care? More than 95 percent of the $1 trillion asset class is yuan-denominated and trades onshore. The offshore portion is small, and showing little sign of distress. The coupon on a $500 million, three-year dollar bond recently issued by Central Plaza Development Ltd. was 3.875 percent.

Noble Group Ltd. reached a deal to restructure $3.5 billion in debt, saving the troubled commodity trader from bankruptcy at the cost of handing control to creditors and all but wiping out current shareholders, Bloomberg News reported. After a three-year crisis marked by massive losses, writedowns and controversial accounting, Noble management, bank creditors, and bondholders reached an in-principle agreement that will convert half of the debt -- roughly $1.7 billion -- into new equity, the company said on Monday.

Cypriots will return to the ballot box on Feb. 4 to choose a leader who can oversee the Mediterranean island’s economic recovery nearly six years after the country came close to financial collapse, Bloomberg News reported. Incumbent President Nicos Anastasiades, 71, will face Stavros Malas in the runoff after taking 35.5 percent of the vote compared with 30.3 percent for Malas, an independent candidate backed by the leftist Akel party, according to Cypriot Interior Ministry figures.

Crisis-hit commodity trader Noble Group is moving closer toward a debt restructuring deal with its lenders, the Financial Times reported. The company’s chairman Paul Brough told shareholders at a meeting in Singapore on Thursday that talks had been “constructive” and were “moving forward”. “I’m hopeful that we will reach a conclusion at some point in the near future,” said Mr Brough, a restructuring expert who was appointed chairman in May.

China’s crackdown on shadow banking is raising concern among bond investors about local borrowers’ ability to make repayments as a record 1.8 trillion yuan ($285 billion) of notes come due this year, Bloomberg News reported. Regulators have stepped up efforts to patch loopholes in off-balance sheet financing in the last couple weeks, moves that will effectively block most fundraising channels for local borrowers. Concern that some local government financing vehicles may not be able to repay debt has helped push up the yield premiums on AAA rated LGFV notes to near the highest in three years.

China’s Communist leadership has tightened the regulatory screws on some of the nation’s largest, private-sector conglomerates in the name of financial stability, Bloomberg News reported. That’s made things a little less stable for investors in some of those companies’ securities. The effects have varied. Bondholders have generally been the worst hit, though stockholders in some of HNA Group Co.’s units have seen shares suspended from trading.

JSW Steel Ltd., India’s biggest producer, is interested in snapping up two struggling rivals, Bhushan Steel Ltd. and Monnet Ispat & Energy Ltd., as part of an industry-wide wave of consolidation sparked by a new bankruptcy law designed to clear-out distressed assets, Bloomberg News reported. The Mumbai-based company will partner with Japan’s JFE Holdings Inc., which holds a 15 percent stake in JSW Steel, and other investors to bid for the assets, Sajjan Jindal, chairman of JSW Group, said in an interview with BloombergQuint at the World Economic Forum’s meeting in Davos.

Strains are spreading in China’s $15 trillion shadow banking industry as investors pull back from the debt-like savings products that helped drive leverage to dangerous levels, Bloomberg News reported. Most affected are some $3.8 trillion of so-called trust products, until now the fastest-growing shadow banking segment and a popular way for debt-ridden property developers and local governments to raise funds from millions of ordinary Chinese.

State Bank of India, the nation’s largest lender, sees provisioning for soured debt as the biggest challenge for the South Asian nation’s banking system even as credit growth is reviving from a three-decade low, Bloomberg News reported. “Whatever process we resort to for the resolution of non-performing assets there will be a gap in the provisioning,” Chairman Rajnish Kumar said in an interview with Bloomberg Television’s Haslinda Amin on the sidelines of the World Economic Forum in Davos on Tuesday. "That is precisely where the support from the government is required.