Asia Pacific

Ecuador’s government is considering various ways of repudiating its debt and will ask for loans from friendly governments like Iran should it lose access to credit markets, the country’s finance minister Maria Elsa Viteri said. Ecuador has threatened to default on $3.9 billion in bonds because it says a government-commissioned audit found evidence of criminal violations in connection with its issuance, Bloomberg reported. The government skipped a $30.6 million bond payment on Nov. 15, invoking a 30-day grace period.

An investor group is going to court to try to delay Tuesday's vote on a restructuring proposal for failed New Zealand finance company Hanover, The National Business Review reported today. The group has also asked the Minister of Commerce to put Hanover into statutory management. The group expects a hearing to be held at the High Court in Auckland on Monday. Hanover Finance is aiming to repay nearly 16,400 secured deposit investors their principal of more than $550 million within five years, under the debt restructure proposal.

In its latest effort to prevent Japan's economy from sinking further into recession, the Bank of Japan expanded its lending programs to ensure sufficient funds are available for companies ahead of the key year-end season, The Wall Street Journal reported today. The steps, announced after an unscheduled meeting of the BOJ's seven-member policy board, came as Japanese banks and companies are beginning to find it harder and more expensive to raise money in the financial markets.

U.K. fund manager New Star Asset Management Group's shares plummeted 43% Monday after the company disclosed that it is holding talks with its bank lenders, The Wall Street Journal reported today. The discussions likely revolve around trying to organize a debt-for-equity swap to help stabilize the highly leveraged firm, a person familiar with the matter said. The company sought to have trading of its shares temporarily suspended Monday as it delivered the potentially gloomy news, but U.K. regulators denied the request.

The troubled German regional bank BayernLB said on Monday that it would shed more than a quarter of its workforce by 2013, with Asian operations slated to bear the brunt of a rigourous downsizing, Agence France-Presse reported today. A statement said BayernLB would eliminate 5,600 posts of a total 19,200 in a bid to save 670 million euros ($850 million) over the next five years. BayernLB “will be smaller and engaged in fewer activities, but it will emerge stronger, closer to its customers and less susceptible to incalculable risk," chairman Michael Kemmer was quoted as saying.

South Korea tackled one big problem, bank liquidity, after the economic crisis went global in recent months. Now another problem is creating uncertainty: high levels of household debt. South Korea in the past five years has built some of the biggest levels of household debt in the world, The Wall Street Journal reported. Household debt increased to 66% of South Korea's gross domestic product last year from 38% a decade earlier, according to a recent study by the International Monetary Fund. As the economy slows, the high level of household debt could lead to more delinquencies.

Morimoto Co., a property developer, filed for protection from creditors with 162 billion yen ($1.7 billion) of debt, bringing the number of bankruptcies among publicly traded companies in Japan to a postwar record, Bloomberg reported. The bankruptcy is the second-largest in Japan this year following Urban Corp.’s filing on Aug. 13. The company’s filing with the Tokyo District Court pushed the total in 2008 to 30, the most since World War II, based on information from Teikoku Databank Ltd., a bankruptcy research firm.

Centro Properties Group, the owner of 794 shopping malls in the U.S., Australia and New Zealand, is continuing talks with lenders to extend more than $4.5 billion of borrowings by Dec. 15 after failing to raise new capital, Bloomberg reported. The real estate investment trust may have to go into receivership unless creditors including Commonwealth Bank of Australia Ltd. and National Australia Bank Ltd. agree to roll over loans, Melbourne-based Centro said today in a statement.

The International Monetary Fund approved a $7.6 billion loan for Pakistan on Tuesday to prevent it from defaulting on its debt and to help stabilize its economy, The New York Times reported. The loan, under discussion for more than a month, at first met strong resistance from the Pakistani government, which sought money on more generous terms from other countries. But Pakistan’s major allies--the United States, China and Saudi Arabia--insisted that it accept the loan and the IMF conditions before they offered assistance.

China's central bank slashed borrowing costs by the biggest margin in a decade, in a strong signal that government efforts to support the economy didn't end with the announcement of a massive stimulus plan just over two weeks ago, the Wall Street Journal reported today. The move, announced Wednesday, brings the benchmark one-year lending rate down by 1.08 percentage points to 5.58%, with the benchmark one-year deposit rate cut by the same margin to 2.52%, the People's Bank of China said in a statement.