Headlines

Investors are giving up on Argentina just six weeks after it pulled off a $65 billion restructuring, Bloomberg News reported. The country’s overseas bonds have plummeted more than 20% since early September, the world’s biggest drop in that span. Morgan Stanley calls it the worst rout in the aftermath of a restructuring in at least 20 years, and it comes despite the nation winning a whopping $38 billion of debt relief from creditors. Those same investors have been dismayed at what followed.

The government of Venezuelan President Nicolas Maduro is approaching some of the nation’s creditors in a bid to lay the groundwork for a debt deal should sanctions ease after next month’s U.S. election, Bloomberg News reported. His team has convened phone calls with local bondholders in the past few weeks, as well as those from Colombia, Argentina and Europe, according to people familiar with the matter. Prominent investors such as Boston-based Fidelity Investments; Goldman Sachs Group Inc. and BlackRock Inc.

Businesses are being set up in the UK at a record rate, according to the government’s register of national corporate activity, as criminals attempting Covid-related fraud establish companies alongside entrepreneurs creating new ventures, the Financial Times reported. Senior bankers have raised concerns that criminals have formed companies to take out lightly checked government-backed loans. The National Audit Office this month warned that tens of billions could be lost through fraud and defaults.

Zambia looks set to move closer to being Africa’s first sovereign default since the onset of the coronavirus pandemic, with bondholders expected to reject a request to put off payments for six months, Bloomberg News reported. A key vote Tuesday by holders of Zambia’s $3 billion of Eurobonds will also be keenly watched by other poor nations considering how to involve commercial creditors in debt-relief talks.

During a pandemic that has wreaked havoc with global travel, Enrique Beltranena is something of a rarity: a happy airline boss. Volaris, his Mexican low-cost airline, has added, not cut, routes during the crisis, has a healthy balance sheet and is “cautiously optimistic” in its outlook, he said.

India is neglecting bank recapitalisation as it focuses on debt moratoriums and interest waivers for borrowers amid the COVID-19 pandemic, a former central bank official told Reuters on Monday, Reuters reported. Indian banks are saddled with over $120 billion in bad debt, and in severely stressed conditions the bad-loan ratio could nearly double by March, according to Reserve Bank of India projections. Restoring banks’ capital is critical for aiding a meaningful recovery, but there has been little focus on the matter, former RBI Deputy Governor Viral Acharya said.

The court-appointed manager for Ocean Tankers Pte Ltd has applied to the Singapore court to return most of the ships the company manages to the shipowners, as cash is running low and Ocean Tankers will not be able to maintain the fleet, two sources with knowledge of the matter told Reuters, Reuters reported. If successful, the move will allow Ocean Tankers, the chartering arm of embattled oil trader Hin Leong Pte Ltd, to resume its cash-generating business such as its oil lubricants business, for which a sales process is underway, the sources said.

Eurozone governments plan to go deeper into the red than ever before this year, racking up budget deficits of close to €1tn as they splash out on emergency measures to counter the coronavirus crisis, the Financial Times reported. Draft budget plans published by member states on the European Commission website indicate the 19-country bloc will slide to an aggregate fiscal deficit of €976bn, equal to 8.9 per cent of gross domestic product this year, according to Financial Times calculations.

The clock is ticking for Zambia to convince reluctant bondholders to accept an interest-payment holiday while it works out a debt-restructuring strategy, Bloomberg News reported. If investors refuse Zambia’s request for a six-month standstill in a key vote on Tuesday, it may become the first African nation to default since the onset of the coronavirus. That could set a precedent for how cash-strapped governments treat private and Chinese creditors. The southern African nation isn’t making it any easier for bondholders to give it breathing space.

Colombia will bring home the $5.3 billion from its International Monetary Fund loan at a gradual pace to avoid causing turbulence in currency markets, deputy Finance Minister Juan Pablo Zarate said, Bloomberg News reported. This cautious approach also improves the chances of the nation getting a more favorable exchange rate, Zarate said in a video interview on Thursday. Colombia will be the first country to tap an IMF flexible credit line, a pre-approved source of funding that comes with no conditions on how it’s spent.