Indonesia is emerging as the lone bright spot in South-East Asia’s syndicated loan market with a pipeline of around US$6bn of offshore loans primed for launch in the coming months, Reuters reported. Instant noodles manufacturer Indofood Sukses Makmur, state-owned electricity utility Perusahaan Listrik Negara, gold and copper miner Freeport Indonesia and Bank Rakyat Indonesia are among a number of top-tier borrowers that are eyeing offshore borrowings.
State Bank of India is seeking to recover two guarantees furnished by the former billionaire Anil Ambani, which according to a news report are worth more than $158 million, Bloomberg News reported. The state-run lender filed an application with the National Company Law Tribunal to appoint a resolution professional, according to an update on the court’s website. The tycoon, who had offered personal guarantee on the bank’s loans to his Reliance Communications Ltd. and Reliance Infratel Ltd., was given a week to reply on Thursday, according to the Press Trust of India.
Emerging economies have raised more than $83bn through the international bond market since the beginning of April, just weeks after a push by the G20 to offer many poorer nations debt relief, the Financial Times reported. Data collated by the Institute of International Finance, an industry association, show that developing economies are financing their coronavirus-driven deficits by accessing the global financial markets, rather than by attempting to restructure their existing borrowings.
Emerging-market economies are grappling with a new dilemma as they begin the slow journey to recovery: how to rescue state-owned businesses without also triggering a debt crisis, Bloomberg News reported. Cash-strapped governments in Indonesia, India, South Africa and elsewhere are being pressured to bail out national airlines, energy utilities and other state businesses brought to their knees by virus-related travel restrictions, collapsing demand and plunging oil prices.
Since India announced last month that it would temporarily suspend its insolvency law amid the pandemic, credit investors have grown concerned that some weaker borrowers may use the development as an excuse to delay or avoid debt payments, Bloomberg News reported. Yield premiums jumped after Finance Minister Nirmala Sitharaman unveiled the suspension, and the extra spread that investors demand to hold short-term AA rated debt over AAA notes has risen to its highest in about nine years.
NWS Holdings Ltd., a unit of one of Hong Kong’s biggest property developers New World Development Co., has applied for a license to manage distressed loans in China, according to people familiar with the matter, Bloomberg News reported. NWS has submitted the application to the China Banking and Insurance Regulatory Commission for a permit in southern Hainan province, said the people, who asked not to be identified as the matter is private.
As many Chinese companies take advantage of declining interest rates to slash borrowing costs, some debt-laden developers are doing the opposite -- raising coupons to avoid having to buy back debt, Bloomberg News reported. Developers make up almost a third of 16 bond issuers that substantially increased coupons this year when a put option allowing investors to sell their holdings back to the company came due, according to Bloomberg calculations based on public data.
Financially battered Hong Kong airline Cathay Pacific Airways has become the latest airline to resort to government support to survive the coronavirus pandemic, the International New York Times reported on an Associated Press story. The Hong Kong government on Tuesday approved a 39 billion Hong Kong dollar ($5 billion) recapitalization plan that calls for a new government-controlled entity called Aviation 2020 to buy $2.6 billion of an up to 33 billion Hong Kong dollars ($4.3 billion) share offering by Cathay Pacific.
Last week, as coronavirus continued to threaten growth around the world, Moody’s cut India back to Baa3. Fellow rating agencies Fitch and S&P, too, have India just one notch above junk, the Financial Times reported in a commentary. The country is not simply a victim of the havoc wrought by the pandemic. Its problems predate the virus. One crucial weakness is a slow-burning crisis in the financial system: a long history of bad lending decisions and poor governance has contributed to deep pain at banks, shadow banks and mutual funds.
South Korea’s Hyundai Development Co said on Tuesday it wants new terms for its acquisition of Asiana Airlines after the carrier’s already hefty debt burden increased by some $3.8 billion (2.9 billion pounds), Reuters reported. It also called on Asiana’s state-funded creditors to provide support to the long-troubled airline, which must now also contend with the coronavirus pandemic’s crippling impact on travel demand. Hyundai Development and brokerage Mirae Asset Daewoo agreed in December to purchase control of South Korea’s No. 2 airline for about 2.5 trillion won ($2.1 billion).