Headlines

South African farmers are increasingly turning to commercial lenders to top up their working capital as the Land and Agricultural Development Bank battles a liquidity crisis, Bloomberg News reported. The Land Bank, which supplies about 30% of loans in the agricultural industry, missed a loan repayment in April that triggered a cross-default provision in some of its bonds. As the state-owned lender works with its funders and National Treasury to restore its financial affairs, farmers are looking elsewhere.

Canada’s housing agency announced it will tighten mortgage qualification rules for high-risk borrowers, a controversial move that could curb credit in an economy trying to emerge from its deepest contraction of the postwar era, Bloomberg News reported. The state-owned Canada Mortgage & Housing Corp., which offers default insurance to home buyers with low down payments, said it will narrow eligibility criteria as of July 1. Buyers will need higher credit scores and lower debt burdens to qualify, the agency said Thursday in Ottawa.

A cut in India’s sovereign rating to junk status may threaten the nation’s chances of being added to global bond indexes, steepen the bond yield curve and weaken the rupee, according to UBS Group AG, Bloomberg News reported. The Swiss bank expects S&P Global Ratings and Fitch Ratings to lower their outlook on the rating to negative from stable over the next couple of months, strategists led by Rohit Arora wrote in a June 3 note.

Argentina's Buenos Aires province extended on Thursday the deadline for debt restructuring talks with its creditors to June 19, saying there could be room for negotiation with its creditors, WHTC reported. The province pushed out the deadline, previously set for Friday, after failing to reach a deal with bondholders, but said in a statement that it would "intensify the dialogue with investors who have not yet accepted the proposal" for about $7.148 billion in debt.

Simultaneously grappling with surging deaths from Covid-19, recession and a weak currency, Brazil at least won’t have problem finding dollars to pay for imports and service its foreign debt in the aftermath of the pandemic, Bloomberg News reported. As Brazilians stop traveling and spending money abroad, the country’s long-running current account deficit is narrowing fast and could even become a surplus this year. In April alone, it was a positive $3.8 billion, the highest ever according to data compiled by Bloomberg.

The U.K. car industry joined in a round of job cuts that has swept Europe, with auto companies looking to downsize to cope with lower sales following the Covid-19 pandemic, Bloomberg News reported. Aston Martin Lagonda Global Holdings Plc said Thursday it plans to eliminate almost 20% of the workforce, or as many as 500 positions, to cope with a slump in demand for luxury cars. Manchester-based vehicle-distributor Lookers Plc will close 12 sites and shed about 1,500 employees, while McLaren Group Ltd. said last week the supercar maker is seeking to cut about 1,200 jobs.

Shenzhen has drafted China’s first personal bankruptcy laws as the southern city tackles broader economic troubles stemming from the coronavirus outbreak, paving the way for others to follow suit, Reuters reported. The rules are intended to give “honest and unfortunate” debtors the chance to escape the mire of debt and make a comeback, the city government said in an official post on Wednesday.

The UK government could face hefty losses on loans made to struggling businesses during the Covid-19 pandemic due to its new insolvency law that can force lenders to accept unfavourable terms during a debt restructuring process, Reuters reported. The new ‘Restructuring Plan’, part of the government’s Corporate Insolvency & Governance Bill being debated in parliament this week, empowers one class of creditors to force a debt restructuring plan on another class of creditors, in what is known as a cross class cramdown.

As another debt deadline came and went this week, Argentina found itself in a familiar place: immersed in recession, beholden to the International Monetary Fund and at cross purposes with private lenders. If the coronavirus pandemic has bought Argentina some international indulgence, as the IMF made clear in a statement on June 1, it hasn’t eased the country’s burden or lifted uncertainty, Bloomberg News reported. Argentina surely deserves debt relief, but also a credible way forward. Borrower and creditors alike reckon that a deal will emerge; they have been inching closer for weeks.

They are the A-team — respected veterans of Airbus, Europe’s aerospace champion, recalled from retirement to defend the industry’s fragile supply chain against a devastating collapse in demand, the Financial Times reported. Each has been chosen to lead a national task force: Tom Williams, former chief operating officer of Airbus commercial, for the UK; Didier Evrard, ex-head of aircraft programmes, for France; and Bernhard Gerwert, previously chief executive of the defence arm, for Germany. The aim is to bring together each country’s big aerospace manufacturers to plan for the sur