France

Creditors of French building materials manufacturer Terreal are urgently seeking dialogue with its private equity owner, LBO France, after Terreal defaulted on a 915 million euro loan, Reuters reported today. Terreal failed a leverage covenant test last Friday on the loan, which specified that its leverage ratio must be eight times and the company instead reported leverage of 8.4 times, banking sources said. Terreal's all-senior loan, which was arranged by ING, is now quoted in the secondary market at a steep discount of 22-32 percent of face value, which indicates distress.

The economy of the euro zone slipped into recession for the first time during the third quarter, the European Union’s statistics agency confirmed Friday, as the financial crisis continued to depress manufacturing activity and consumer demand, the New York Times reported today. Gross domestic product declined 0.2 percent in the third quarter from the previous three months in both the euro zone, which comprises the 15 countries that use the euro as their currency, and the European Union as a whole, according to an initial estimate published by the agency Eurostat.