Headlines

France, Italy and Spain and six other euro area governments have called for the issuance of joint European debt to finance the fight against coronavirus, setting up a clash with capitals including Berlin that believe the move is premature, the Financial Times reported. In a joint letter to European Council president Charles Michel, leaders from the nine countries said the EU needed “to work on a common debt instrument issued by a European institution to raise funds on the market on the same basis and to the benefits of all member states”.

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SoftBank Group Corp. lashed out at Moody’s Corp. after its debt was downgraded by two notches, accusing the ratings company of “bias” and “creating substantial misunderstanding” days after the investment group announced a $41 billion asset sale program intended to shore up confidence, Bloomberg News reported. SoftBank’s shares slid as much as 8.4% early in Tokyo trade. The Moody’s downgrade -- lowering SoftBank’s corporate family rating and senior unsecured rating to Ba3 from Ba1 -- pushed the company deeper into junk territory.

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The Bank of Thailand has set guidelines for minimum assistance that financial institutions must offer to debtors to ease their financial burden amid the pandemic, effective from April 1, the Bangkok Post reported. Veerathai Santiprabhob, the central bank's governor, said the coronavirus outbreak has affected individuals and small and medium-sized enterprises (SMEs) on a far-reaching scale, leading to the need for a guideline. "A policy rate cut is insufficient to help borrowers," he said.

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Chairman of the Association of Banks in Lebanon (ABL) Salim Sfeir announced plans to donate $6 million to government hospitals battling coronavirus, in a press conference yesterday, the Middle East Monitor reported. The money from the ABL will be used to purchase 120 respirators for treatment of coronavirus patients across Lebanon, according to a statement from Sfeir’s office. During a meeting between Sfeir and Lebanon’s Prime Minister Hassan Diab on Tuesday, ABL’s chairman handed the government a cheque for the $6 million and said that “today Lebanon is enduring a great national trial.

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Qantas Airways has raised A$1.05bn ($633m) to bolster its balance sheet, one of the first successful private debt raisings by an airline since countries around the globe began shutting their borders against coronavirus, forcing the industry to ground thousands of aircraft, the Financial Times reported. The 10-year loan advanced by a consortium of domestic and international banks is secured against part of the Australian carrier’s fleet at an interest rate of 2.75 per cent.

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The administrators of a shipbuilding company bought by the Scottish government are owed £1.2 million, The Times reported. A report by Deloitte shows the costs charged for its staff working on the insolvency of Ferguson Marine Engineering between August and February. Ferguson went into administration in the summer after a long dispute between it and Caledonian Maritime Assets over a £97 million contract to build two new ferries for the islands.

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The committee of creditors (CoC) of beleaguered wind energy producer Suzlon Energy have started voting on the debt restructuring plan presented by promoters of the company, sources close to development told FE, The Financial Express reported. The process will conclude by March 26. “Out of 19 lenders, 16 have voted on resolution plan” the source added. The e-voting for Suzlon was supposed to be completed on March 21, but due to the existing scenario over Covid-19, it has been extended till March 26, a source further added.

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The IoD is calling for emergency insolvency measures to prevent widespread company collapses, Business News Wales reported. Under current laws, the board of directors has a strict duty to cease trading if the company is facing insolvency, and may face personal financial or legal liabilities at a later date if they seek finance instead of doing so. The IoD therefore calls on the Government to relax existing insolvency obligations – including a moratorium on the current offence of wrongful trading.

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Australia has one of the harshest regimes for insolvent trading in the world. But its laser focus on the interests of creditors, and harsh penalties, has served to distract directors in times of distress – and arguably stood in the way of better outcomes for everyone (creditors included), The Australian Financial Review reported. Refocusing directors’ attention to the interests of the company as a whole could change that.

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UK Eyes Insolvency Law Reforms

The UK government is eyeing urgent changes to insolvency laws to prevent companies unable to meet debts due to the impact of coronavirus from being forced to file for bankruptcy, the Financial Times reported. The Department for Business, Energy and Industrial Strategy canvassed insolvency and restructuring experts this week on a possible suspension of wrongful trading laws and new measures to protect retail and hospitality groups forced to stop trading because of the government’s nationwide lockdown, according to two people familiar with the matter.

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