Headlines

Japan needs to remain vigilant about its banks’ overseas investments in bundled credit products because the underlying loans may be less spread out across industries or individual companies than they appear, a senior regulatory official said, Bloomberg News reported. ‘’Even if banks individually think they are well-diversified, it is possible that overall risks in the market are concentrated in the same sector or the same debtors,” said Tokio Morita, director-general of the Financial Services Agency’s Strategy Development and Management Bureau.

Troubled Chinese conglomerate HNA Group Co. faces a crucial test -- avoiding its first public bond default. Once a front-runner in China’s debt-fueled global spending spree, HNA is scheduled to repay a 1.3 billion yuan ($185 million) local bond Tuesday, Bloomberg News reported. Earlier this month, HNA said it would halt trading of this bond from Dec. 6 till its maturity due to an unspecified “major event that has yet to be finalized”. It didn’t give any details. The suspended bond last traded at 97.55 yuan on Dec. 5.

Low inflation, tight public spending and a reduction in the vast debts of loss-making state oil giant Petroleos Mexicanos (Pemex) have helped spruce up Mexico’s so-called risk profile, which reached its “safest” level in five years this month, Reuters reported. Risk premiums of investing in Mexico, as measured by traders in credit default swaps (CDS), hit their lowest level since November 2014 despite business and investor concerns about the economic management of the leftist government.

Lenders to an Indian shadow bank at the center of an industry crisis since it started defaulting three months ago have called for binding bids from potential rescuers by mid-January, people familiar with the matter said, Bloomberg News reported. Altico Capital India Ltd. is one of the latest caught up in the nation’s shadow banking crisis, which has deepened as lenders already reeling from one of the world’s worst bad loan piles balk at extending more credit.

After winning Istanbul’s local election in a landslide, Mayor Ekrem Imamoglu said he’s had to fight through a budgetary “black hole” of about 14 billion liras ($2.4 billion), Bloomberg News reported. Speaking on Monday at a news conference in Istanbul to mark his sixth month in power, Imamoglu said the municipal government of Turkey’s largest city had 6 billion liras of overdue debt and ran a budget deficit of 7.9 billion liras when he took over.

Defaults across Asia may be headed even higher next year, with trouble seen especially in China and India. Many investors expect fewer bailouts by the Chinese government after it recently let commodities trader Tewoo Group default in the biggest failure on a dollar bond by a state-owned firm in two decades, Bloomberg News reported. Companies in the region have been on a buying spree fueled by debt. Those factors could make things even worse in 2020 after China onshore defaults rose to a record in 2019.

Brazilian telecoms company Oi SA said on Monday its mobile unit has signed an agreement to issue up to 2.5 billion reais ($609.40 million) in debenture bonds with a 24-month term to meet its cash needs, Reuters reported. The move comes as Brazil’s largest fixed-line carrier struggles to turn around its business since filing for bankruptcy protection in June 2016 and to restructure approximately 65 billion reais ($15.7 billion) of debt.

French marine services group Bourbon Corporation, which has been in a court restructuring process after its business was hit by volatile energy markets, said its assets would be taken over by its creditor banks, Reuters reported. Bourbon said the Marseille commercial court had ruled that Bourbon’s assets would be transferred to Société Phocéenne de Participations (SPP) from Jan. 2, 2020.

A South African telecoms company backed by investment firm Remgro plans to expand its high-speed broadband network after completing a 16 billion rand ($1 billion) debt restructuring this week, Reuters reported. The building of fiber optic networks in upmarket neighborhoods has intensified in the past five years, but has been confined to cities due to the high cost of laying down the infrastructure and the dominance of mobile internet.

Argentina appointed a government team to kick off talks with creditors to renegotiate about $100 billion in sovereign debt as the new center-left administration of President Alberto Fernandez postponed payments on some of its short-term debt, Reuters reported. The “external debt sustainability management unit” was created in the context of the government’s sweeping economic bill, expected to be passed by the Senate later on Friday, according to a statement by the Secretariat of Finance.