Headlines

Japan’s financial regulator is warming to a junk bond market. Debate has been heating up in the country about junk bonds after the first such publicly offered note in the nation priced last month by Aiful Corp., a consumer lender that teetered on the verge of bankruptcy a decade ago, Bloomberg News reported. With negative rates persisting into a fourth year and showing no sign of abating, investors are increasingly under pressure to take on more risk to secure returns.

One of the most opaque areas of China’s credit markets involves the practice of companies buying their own bonds, Bloomberg News reported. That may soon get a lot tougher, contributing to financing difficulties that are already bedeviling the nation’s policy makers. At issue is a sharp increase in scrutiny by financial institutions of the collateral that their counterparties offer up in the repurchase market, a crucial channel for short-term funding.

Brazil’s antitrust regulator wants new rules for allocating airplane landing and departure rights, known as slots, in Sao Paulo’s crowded domestic airport, saying they are too concentrated among two main airlines, Reuters reported. The recommendation comes as the country’s civil aviation regulator ANAC has announced it will take back the slots held by grounded airline Avianca Brasil in the airport, known as Congonhas, as part of a plan to redistribute them later.

Banks have just about a couple of weeks to decide the fate of more than 150 borrowers, which include sugarmaker Bajaj Hindusthan, energy companies RattanIndia Power and Suzlon and other infrastructure and road builders as the 30-day review period for these loans ends on July 7, The Economic Times reported.

The High Court has delivered a landmark decision in prioritising employee entitlements in insolvency, irrespective of whether the company was trading in its own right or as a trustee, MyBusiness reported. Last week, the High Court dismissed an appeal in Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth of Australia and Others [2019] HCA 20. Amerind Pty Ltd became insolvent in 2014, with $21 million in debts repaid to Bendigo and Adelaide Bank, leaving a receivership surplus of about $1.6 million.

The eurozone’s anemic growth and inflation mean it’s probably already experiencing its own “Japanification,” and escape could prove hard if the Asian nation’s track record is any guide, according to ING Group, The Japan Times reported. Europe’s situation has long left it open to comparisons with Japan in the 1990s. In a report Monday, ING lists similarities including an increase in government debt, a buildup of bad loans at banks, an aging population and huge monetary policy loosening.

The European Commission could give Italy until January to make fiscal policy changes under an EU debt procedure, minutes of an EU meeting show, setting a relatively long deadline to help avert fines and any backlash from Rome’s eurosceptics, Reuters reported. Unless the government makes concessions this week on its spending plans for 2019 and 2020, the EU executive is expected to propose on July 2 that a disciplinary procedure be opened over Italy’s rising debt.

India's National Company Law Tribunal is pushing for the corporate insolvency resolution process for Jet Airways to be fast-tracked, citing the national importance of the matter, FlightGlobal reported. An order from the Mumbai bench of the court appointed Ashish Chhawchharia from Grant Thornton as the interim resolution professional (IRP) and declared a moratorium on any action be creditors to recover assets or lodge legal action against Jet. That moratorium will run until the completion of the insolvency process, the court approves a resolution plan, or a liquidation is ordered.

Several insurers have reportedly begun taking action to avoid potential losses from the bankruptcy protection process for the holding company (ODB) of Brazilian construction conglomerate Odebrecht, BNamericas reported. Earlier in the week, ODB and 21 of its subsidiaries filed the bankruptcy protection request with 98.5bn reais (US$25.2bn) in debt. The request was accepted by a local court and became the country’s largest bankruptcy protection proceeding ever, surpassing Brazilian telecom operator Oi, which filed a request in 2016 with a debt pile of more than 64bn reais.

The High Court has declared it would be "perverse" not to give worker entitlements priority in any collapse, whether a company trades in its own right or as a trustee, the Australian Financial Review reported. The court's decision in the Carter Holt Harvey Woodproducts case means the same rules apply for the payment of creditors and is an important win for workers. This has been welcomed by leading insolvency practitioners, who say the status of workers employed by trading trusts has been so uncertain that they faced being pushed to the back of the queue with other unsecured creditors.