Headlines

Banks are putting the brakes on U.K. commercial real estate lending as the pandemic batters the economy and stokes fears about looming defaults, Bloomberg News reported. New loans declined in the first half by 34% from a year earlier to 15.5 billion pounds ($20.2 billion), according to a report from The Business School in the City of London. More than a fifth of lenders surveyed said they made no new commercial property loans in the period. The coronavirus has plunged the U.K. into a painful recession.

China Evergrande Group, the country’s most indebted property developer, on Wednesday said it has raised $555 million in a secondary share sale, settling for half its initial target and sparking a 16% drop in its share price, Reuters reported. To help pay debt, the firm sold 260.65 million shares at HK$16.50 ($2.13) each - the low end of a price range flagged by its bankers in a term sheet when the deal launched on Tuesday.

International Monetary Fund Managing Director Kristalina Georgieva on Wednesday called for increased participation in debt relief for poor countries by private creditors and China, saying this was key to its success and a potential framework for debt restructurings, Reuters reported. Georgieva told a news conference that private creditor participation in a debt service suspension program for poor countries has been largely non-existent, with only three of 44 countries signed up for the program reaching out to private creditors.

Rich nations, development banks and private creditors need to ramp up support for poorer countries to prevent humanitarian crises and a “lost decade” of global growth, the prominent G30 group of former policymakers and academics said on Wednesday, Reuters reported. How to support struggling countries is the most pressing issue being discussed during the virtual annual meetings of the International Monetary Fund and World Bank this week amid warnings 150 million people could be pushed into extreme poverty by the end of next year. The G30, which includes former U.S.

The Thai central bank on Wednesday said in its weekly press conference that it was working out an additional debt restructuring package using targeted measures to help borrowers in a grim economy hit by the COVID-19 pandemic, Xinhuanet reported. The additional package is intended to improve the efficiency of existing measures and address borrowers' problem in a targeted manner, said Mathee Supapongse, assistant governor of the Bank of Thailand (BOT). The package will include a debt holiday, soft loans and other related measures, said Mathee.

The International Monetary Fund is willing to work with Lebanon to solve its financial problems and restructure its debt, but needs a partner in the Lebanese government, IMF Managing Director Kristalina Georgieva said on Wednesday, Reuters reported. Speaking with CNN during the annual meetings of the IMF and World Bank, Georgieva said ongoing fragmentation was holding Lebanon back and preventing progress on an economic plan to lift the country out of financial crisis. “It takes two to tango,” Georgieva said.

The Swiss government will not extend beyond next week emergency measures it imposed in April designed to prevent the coronavirus pandemic from driving otherwise healthy companies into bankruptcy, it said on Wednesday, Reuters reported. The decree that suspended companies’ obligation to report overindebtedness will expire as planned on Oct. 19, it said. “The (government) is convinced that there is a need for great restraint when interfering with the economic cycle. Relief for debtors, for example a deferral, always means a burden for creditors and for the entire economy.

Zambia has warned it is ready to become the first African country to default as a result of the coronavirus pandemic if investors in its $3bn worth of US dollar bonds reject a request by the southern African nation to suspend payments, the Financial Times reported. Africa’s second-biggest copper producer, which is attempting to restructure its $12bn of external debt, has become a crucial test of global efforts to help emerging nations find debt relief as the pandemic devastates their economies.

AirAsia X has proposed to its creditors to restructure MYR63.5 billion ringgits (USD15.3 billion) of liabilities through a reconstitution into an acknowledgement of indebtedness for a principal amount of up to MYR200 million (USD48.2 million), ch-aviation reported. The Malaysian long-haul low-cost carrier proposed in a stock market filing that any outstanding amounts above the reconstituted value and all sums, such as interest, incurred after June 30, 2020, be waived.

Data from CreditorWatch shows that 436 businesses across Australia went into administration in September, which is 11 per cent higher than previously, MacroBusiness reported. The number of businesses going into administration in locked-down Victoria rose by 23.8 per cent, although there was a 1.6 per cent decline in business administrations in New South Wales. CreditorWatch’s chief economist Harley Dale says there is some correlation between the increase in business administrations and the recent reduction in government support measures such as JobKeeper wage subsidy.