Headlines

A slow economic recovery threatens to turn more companies in the industries worst hit by the pandemic into so-called zombies, according to a report by the Bank for International Settlements, Bloomberg News reported. Without a significant rebound, corporations in sectors such as travel and leisure that loaded up on debt in the pandemic risk being left unable to cover debt servicing costs from current profits, according to the BIS, which is known as the central bank for central banks.

The European Central Bank cut interest rates to below zero years ago to reignite the continent’s frail economy in the midst of a sovereign-debt crisis. The negative rates helped everyone get cheap financing, from governments to small companies. It gave an incentive to households to borrow and spend. And it broke the basic rule of credit, allowing banks to owe money to borrowers, the Wall Street Journal reported. After the ECB cut interest rates to below zero in 2014, economies in the eurozone improved and expectations were that rates would rise in a few years.

A huge container ship blocking the Suez Canal like a “beached whale” may take weeks to free, the salvage company said, as officials stopped all ships entering the channel on Thursday in a new setback for global trade, Reuters reported. The 400 metre (430 yard) Ever Given, almost as long as the Empire State Building is high, is blocking transit in both directions through one of the world’s busiest shipping channels for oil and grain and other trade linking Asia and Europe.

Ghana’s planned Eurobond sale will be a key test of appetite for African issuers after a raft of nations sought debt relief, shaking investor confidence, Bloomberg News reported. Strong demand for the sale, which includes Africa’s first zero-coupon dollar bond, would encourage other African countries to tap international capital markets for money needed to roll over debt and finance strained budgets. That would also sidestep the need to seek debt relief and the questions that raises over market access, according to Gemcorp Capital LLP.

On the first day of a two-day hearing at the Competition Appeal Tribunal (CAT), a Mastercard lawyer said that common law did not assume that interest would accrue on a compound basis on such claims, Reuters reported. “The law is not the same as economic theory,” he said. “In most cases, simple interest is going to be perfectly adequate as a means of compensation.” Former financial ombudsman Walter Merricks, who is leading the claim, alleges that Mastercard overcharged almost 60 million people in Britain - including about 14 million people now deceased - over nearly 16 years.

London Stock Exchange Group Plc is tapping the U.S. high-grade bond market for $4.5 billion to help refinance debt it took on related to its acquisition of Refinitiv Holdings Ltd., Bloomberg News reported. The company is selling bonds in five parts. The longest portion of the offering, a 20-year security, may yield about 100 basis points over Treasuries. The exchange will use the funds to refinance debt incurred in connection with its $27 billion purchase of Refinitiv that was completed earlier this year.

Cineworld will ask shareholders to approve an increase in its debt ceiling next month after the pandemic-stricken cinema group plunged to a $3 billion loss last year, Reuters reported. The Regal Cinemas owner, forced by coronavirus lockdowns to shut most of its almost 800 theatres in October and temporarily lay off about 45,000 staff, sunk to its first pretax loss as a listed company last year, after a $212.3 million profit in 2019. Its shares tumbled 9% to 94 pence in early Thursday trading, the worst performance on the UK mid-cap index. The group, which is set to reopen its U.S.

Grupo Televisa SAB is in talks to join forces with Univision Communications Inc., according to people familiar with the matter, a deal that could more formally unite the Spanish-language media giants after a long partnership, Bloomberg News reported. With discussions at an early stage, no final decision has been made and talks could fall through. The two sides are still discussing the structure of a potential transaction and which parts of the businesses could merge.

Ulster Bank has been fined a record €37.8 million by the Central Bank for its role in the State’s tracker mortgage scandal, which saw the lender devise “deliberate” strategies to shift borrowers off cheap mortgages during the financial crisis and only rectify matters for those that complained, the Irish Times reported. Borrowers lost 43 properties as a result of overcharging as they were denied their entitlement to a low-cost mortgage linked to the European Central Bank’s main rate, the Central Bank said in a statement on Thursday. Family homes accounted for 29 of these cases.