Headlines

India’s credit rating was cut to the lowest investment grade by Moody’s Investors Service, citing policy challenges in addressing a prolonged slowdown and the government’s deteriorating fiscal position, Bloomberg News reported. The nation’s long-term foreign-currency credit rating was cut to Baa3 from Baa2, according to a statement. The outlook remains negative. “The negative outlook reflects dominant, mutually-reinforcing, downside risks from deeper stresses in the economy,” Moody’s said.

Boris Johnson plans to re-set his government’s agenda with a major speech and a financial statement to prepare the U.K. for the new reality after the coronavirus pandemic, Bloomberg News reported. Amid forecasts of the worst recession in 300 years, Chancellor of the Exchequer Rishi Sunak is drawing up options to bolster the economy after the government withdraws its vast package of financial support in the months ahead, according to people familiar with the matter.

Piraeus Bank, Greece’s largest lender by assets, on Monday reported a first-quarter loss after “frontloading” loan impairment provisions to take into account the impact of the coronavirus crisis, Reuters reported. Piraeus Bank, which is 26.2% owned by the country’s HFSF bank rescue fund, reported a net loss of 232 million euros ($258.08 million) compared with a net profit of 14 million euros in the same period a year earlier.

Saudi Arabia unveiled a $13.3 billion stimulus package to protect banks against an expected drop in profits and rise in bad loans as they confront the double whammy of the coronavirus shock and lower oil prices, Bloomberg News reported. The move by the central bank, the Saudi Arabian Monetary Authority, will help lenders amend and restructure loans, without additional fees, and support private sector employment and credit. It follows a 50-billion-riyal ($13.3 billion) program in March to help banks provide loans to businesses so companies didn’t have to cut jobs.

Aerolineas Argentinas will begin negotiations with unions to suspend the contracts of thousands of employees until August after the flag carrier’s income plunged about 97% due to the coronavirus outbreak, it said on Monday, Reuters reported. The airline, which is staying afloat largely through state support, will pay workers’ social security and make smaller, spot payments during the proposed two-month suspension, it said in a statement. A source told Reuters the carrier aims to suspend some 8,000 of its 12,000 employees.

Indonesian companies from airlines to builders of luxury condominiums and cement makers are warning investors of plunging revenue and profit as the coronavirus pandemic ravages Southeast Asia’s largest economy, Bloomberg News reported. While national carrier PT Garuda Indonesia and PT AirAsia Indonesia are hit by a ban on domestic travel and large scale social distancing rules, property developers are reporting declines in their sales as buyers turn more cautious.

A draft rescue plan for South African Airways (SAA) contains about 4.6 billion rand ($263.4 million) of new bailouts as part of a restructuring aimed at saving the airline from collapse, a copy of the plan showed on Monday, Reuters reported. State-owned SAA entered business rescue - a local form of bankruptcy protection - in December after almost a decade of financial losses, with its fortunes deteriorating when the COVID-19 pandemic forced it to halt all commercial passenger flights in March.

Clothing retailer Reitmans Canada Ltd said on Monday it would permanently shutdown its Thyme Maternity and Addition Elle brands and slash its work force by about 1,400 employees as part of a restructuring plan, Reuters reported. Last month, the company said that it had obtained preliminary approval to seek bankruptcy protection in order to restructure its operations as the COVID-19 pandemic causes prolonged store closures.

UK banks are warning that up to half of the £18.5bn of “bounce back” coronavirus loans are unlikely to be repaid and are lobbying the chancellor to prepare for the collapse of hundreds of thousands of small businesses, the Financial Times reported. Three senior bankers estimated between 40 per cent and 50 per cent of the 608,000 borrowers who have accessed the Bounce Back Loan Scheme, or BBLS, could eventually default on the debt as the prospect of a quick economic recovery fades.

Argentina may have to dole out at least $880 million in subsidies this year to keep its state airline afloat, further weighing on government finances after the nation’s ninth sovereign default, Bloomberg News reported. Aerolineas Argentinas President Pablo Ceriani said the carrier’s budget shortfalls, up from about $680 million last year, will persist until demand rebounds, which isn’t expected for a couple of years.