Headlines

The International Monetary Fund will send another mission to Argentina to continue debt strategy talks and discuss “next steps,” an IMF spokesman said on Thursday, as the South American nation seeks to renegotiate its $57 billion financing package, Reuters reported. The IMF technical team will arrive in Buenos Aires next week for meetings with economy ministry officials about the government’s economic program, the spokesman said. The fund’s last mission to Argentina ended just over a week ago.

The first coronavirus case in Latin America sent currencies tumbling across the region Thursday as investors became increasingly risk averse, Bloomberg News reported. All Latin American currencies were among the worst performers in emerging markets, with Brazil’s real reaching an all-time low despite the central bank intervention and the Mexican peso dropping to the weakest since early December. Both the Colombian and Chilean pesos were on track to reach their all-time lows.

European debt markets are reeling from the perfect storm of risk aversion as the coronavirus crisis threatens to rapidly become a pandemic, Bloomberg News reported. Investors are dumping anything seen as risky and piling into top-rated government bonds -- especially those of Germany -- for safety, while boosting bets for emergency monetary easing by the European Central Bank. Yield premiums on peripheral euro-area bonds jumped this week as Italy reported the region’s biggest surge in infections, reigniting fears of a recession in the country.

Central banks are paying attention to climate-related financial risks. They are beginning to incorporate them into their financial stability and economic analysis, and in stress tests for banks, the Financial Times reported. It is also time for central banks to consider such risks when implementing monetary policy. This will be challenging. It requires more data relevant to the assessment of the climate change threat, a thorough methodology and, importantly, time.

An embattled Chinese property developer has sparked concern about a potential default on a dollar bond, after offering investors a swap for cash and new bonds for the bulk of the $300 million note, Bloomberg News reported. Yida China Holdings Ltd., a business park developer, proposed an exchange for at least 75% of the bond due April, saying its existing internal resources “may be insufficient to repay” the note, according to a company filing to the Hong Kong Stock Exchange.

Homebase plans to end its company voluntary arrangement 18 months early after the UK’s second-largest home improvement retailer renegotiated most of its leases and improved profitability, the Financial Times reported. The group used the controversial insolvency procedure in 2018 to cut rents and close stores after a brief but disastrous period of ownership by Australian group Wesfarmers. CVAs give struggling businesses a chance to renegotiate debts with creditors. For Homebase the process had been due to run until August 2021 but will instead terminate in March or April.

Billionaire John Fredriksen’s heavily indebted Seadrill Ltd. said it’s continuing talks with its banks as it reported a new loss amid a sluggish recovery in offshore drilling, Bloomberg News reported. The rig operator is under pressure less than two years after completing a massive restructuring that left it with almost $6 billion in bank debt. The company had counted on a strong market recovery that has yet to fully materialize as repayments come closer. Seadrill said the pace of the recovery has even slowed so far in 2020, as it reported a net loss of $199 million.

Hontop Energy (Singapore) Pte Ltd, the trading arm of a Shandong-based refiner, has gone into receivership, according to its business profile on the website of Singapore’s accounting and corporate regulator, Reuters reported. Singapore bank DBS, one of Hontop’s creditors, has appointed accounting firm KPMG as the receiver, a KPMG official told Reuters. DBS declined to comment. “Hontop continues to be run by the existing management. The receiver has been appointed over specific charged assets which mainly relate to one trade transaction financed by DBS.

A European auto supplier has been forced to close its main Italian plant due to the country’s coronavirus quarantine, in the clearest evidence so far of the impact that the disease could have on Europe’s domestic industry and economy, the Financial Times reported. Electronics manufacturer MTA said that if its 600 employees in the northern Italian town of Codogno were not allowed to return to work within days, production lines at Fiat Chrysler (FCA) subsidiaries would be brought to a standstill.

German Finance Minister Olaf Scholz is considering a move that could open an avenue for limited fiscal stimulus in Europe’s largest economy, Bloomberg News reported. Scholz wants to temporarily suspend the constitutional mechanism that restricts the country’s debt levels in order to provide relief for indebted regions, according to an official familiar with the plans. The initiative, which is likely to face strong political opposition, would shift borrowings from municipalities to the federal government, giving them more budget space to invest locally.