Europe

Germany is mulling around 70 billion euros ($83 billion) in extra debt spending this year to fight the fallout from the coronavirus crisis, Bloomberg News reported. Finance Minister Olaf Scholz needs those additional funds because the country’s lockdown is dragging on much longer than expected, the person said, cautioning that the exact number is still under discussion. Germany’s total new debt for this year will rise to 250 billion euros, Der Spiegel said, which reported the new spending plans earlier.
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Thirty-four creditors of Greensill Capital Pty, the Australian parent of the collapsed British supply chain financier, submitted over A$1.75 billion ($1.35 billion) in claims to the company, administrators said on Friday, Reuters reported. About $1.15 billion of that was made by Japan’s Softbank Group, a source familiar with the situation told Reuters. The source declined to be identified as the person was not permitted to speak publicly.

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British officials are drawing up contingency plans in case the government needs to step in to save Sanjeev Gupta’s Liberty Steel from collapse, amid fears that thousands of jobs in a critically important industry are at risk, Bloomberg News reported. Business Secretary Kwasi Kwarteng and other senior officials have been holding intensive discussions with the company in recent days, aiming to secure the future of the steelmaker.
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Norwegian Air’s shareholders voted in favour of the company’s debt restructuring plan on Thursday, business news website E24 reported. The vote was the first of several procedural hurdles the airline faces as it battles to survive the coronavirus pandemic which has decimated air travel. More than 99% of shareholders supported the so-called scheme of arrangement, E24 reported, which will be voted on separately by several groups of creditors on Thursday and Friday.
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Securities settlement for Irish assets worth more than 100 billion euros ($119 billion) has left London for the European Union in the latest adjustment in markets to Brexit, Reuters reported. Pan-European exchange Euronext, which runs the Irish stock exchange, said on Thursday it had completed the migration of securities settlement for 50 Irish companies from Crest in London to Euroclear Bank in Brussels from March 15. Settlement of EU securities must take place in a central securities depository (CSD) inside the bloc.
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Britain proposed weakening the market grip of “Big Four” auditors on Thursday and making company directors responsible for spotting fraud after the collapses of retailer BHS and builder Carillion, Reuters reported. Directors would have to repay bonuses if their company went bust or serious failings came to light, and dividends and bonuses would have to be stopped if firms didn’t have enough cash - a lesson from the Carillion collapse.
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The European Central Bank may need some time before the recently agreed acceleration in the pace of money printing, part of its efforts to cushion the fallout of the COVID-19 pandemic, becomes apparent, ECB President Christine Lagarde said on Thursday, Reuters reported. Investors have been scrutinising the ECB’s weekly purchase data for evidence of the central bank’s effort to stem a rise in borrowing costs on bond markets, largely driven by higher inflation expectations in the United States.
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Spain’s largest hotel chain Melia Hotels has filed a complaint against the government with an administrative court seeking 116 million euros ($138 million) in damages incurred due to last year’s COVID-19 restrictions, the company said, Reuters reported. A spokeswoman for the group said on Wednesday the claim was related to losses suffered as a result of the government-imposed lockdown between mid-March and late June of 2020, confirming a report by the newspaper Expansion.

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The fall in French corporate insolvencies during the coronavirus pandemic reflects extensive government support that has masked disparate performances among SMEs, as has the stability of corporates’ aggregate net debt, according to a Fitch Ratings report. Fitch expects arrears and defaults among SMEs to increase as support is withdrawn and this is reflected in the firm's French SME CLO performance expectations, which already incorporate pandemic-related stresses.
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Bond investors bracing for Czech rate hikes are finding a silver lining in the latest bond selloff, Bloomberg News reported. Primary dealers bid for more than 30 billion koruna ($1.37 billion) of Czech government bonds due in 2030 at an auction on Wednesday, the highest demand for a note with about 10 years in maturity since May. The rush reflects the juicy yield premium that the battered securities now offer over equivalent German bunds.

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