Headlines

A V-shaped recovery of the German economy from the impact of the coronavirus pandemic is unlikely, with two thirds of companies expecting a return to normalcy in 2021 at the earliest, business association DIHK said on Tuesday, Reuters reported. “The V is off the table,” DIHK said, adding that its survey of 8,500 companies confirms its forecast for a 10% slump in Germany’s economy this year. The association added that four out of five companies expect their sales to decline this year.

Read more

Greece’s National Bank (NBG) has hired Morgan Stanley as an adviser ahead of a planned sale of more than 6.0 billion euros ($6.73 billion) of non-performing credit, part of its balance sheet clean-up efforts, bankers close to the transaction said on Tuesday, Reuters reported. NBG, Greece’s second-largest lender by assets, is aiming to begin talks with potential investors about offloading a portfolio of soured loans known as project Frontier in the second half of the year, they added.

Read more

Two major Argentine creditor groups said on Tuesday that there had been “no meaningful engagement” with the country’s government since mid-June, flagging concerns about a deal after talks to restructure $65 billion in debts stalled this month, Reuters reported. Argentina, which defaulted on foreign bond payments in May, is racing to restructure its debts, which have become unsustainable after two straight years of recession, to avoid a messy and protracted legal standoff with creditors.

Read more

Japan’s industrial output fell for a fourth straight month in May to the lowest level since the global financial crisis and the jobless rate hit a three-year high, underscoring the broad economic pain caused by the coronavirus, Reuters reported. The world’s third-largest economy is bracing for its worst postwar recession, hurt by coronavirus lockdown measures at home and overseas that have upended supply chains, kept businesses shut and depressed consumer spending.

Read more

Dubai World has made a final $8.2bn payment to creditors, ending the most complicated and highest-profile restructuring to stem from the debt crisis that almost overwhelmed the Gulf emirate a decade ago, the Financial Times reported. Dubai was forced to raise $20bn in emergency loans in 2009 to cope with the credit crunch and to prevent a default by Dubai World’s main real estate arm that was heavily exposed to the then collapsing property market.

Read more

Government debt burdens across sub-Saharan Africa are rising at a faster pace and to higher levels than elsewhere in emerging markets, heightening the risk of further rating downgrades and defaults, ratings agency Fitch warned on Tuesday, Reuters reported. Emerging markets have been battered by the fallout from the coronavirus pandemic, with a coinciding oil price rout adding to the pain for smaller and often riskier developing countries, many focussed on crude exports and having few fiscal or monetary buffers.

Read more

A stalking horse bid for Cirque du Soleil Entertainment Group was dismissed as inadequate by lenders during a Quebec court hearing into the company’s restructuring on Tuesday, Reuters reported. Canada’s once high-flying Cirque received initial protection from its creditors, after the COVID-19 pandemic forced the famed circus operator to cancel shows and lay off artists. Montreal-based Cirque, which grew from a troupe of street-performers in the 1980s to a company with global reach, has slashed about 95% of its workforce and suspended shows due to the pandemic.

Read more

The sudden fall of Wirecard has triggered a fallout in the wider payments system, as fintech groups move to distance themselves from partnerships they struck with the troubled German company, the Financial Times reported. Wirecard’s crisis has already affected millions of British savers while raising questions about the oversight of technology companies that claim to disrupt payment systems, which have long been the domain of banks and other financial institutions.

Read more

The UK economy shrank more than initially estimated in the first quarter of this year, recording the largest fall since 1979 as coronavirus choked activity in March, with household savings soaring, the Financial Times reported. Output in the UK dropped 2.2 per cent in the first quarter compared to the previous three months, according to revised data from the Office for National Statistics. This is a sharper contraction than the first estimate of 2 per cent. The quarterly fall in UK gross domestic product is now the joint largest since the third quarter of 1979.

Read more

Japanese auto supplier Sanden Holdings on Tuesday said it had filed for debt restructuring with its creditors as falling sales due to the coronavirus pandemic had made it difficult for the company to pursue its restructuring plans, Reuters reported. In a filing to the Tokyo Stock Exchange, the maker of vehicle air conditioning components and compressors said it would enter a so-called alternative dispute resolution, which allows financially stressed companies to reassess and restructure debt.

Read more