Headlines

Azerbaijan’s SOCAR is interested in buying Russia’s Antipinsky oil refinery, although specifics from the Russian side are not known yet, SOCAR’s deputy vice president told Reuters. Sberbank, Russia’s largest lender, is in talks with potential investors to sell the Siberian refinery after gaining the rights for the majority of the indebted business, Reuters reported. “We are interested in this purchase indeed, but proposals are not defined yet,” Vitaly Baylarbayov told Reuters on Thursday at the annual Caspian Oil and Gas conference in the Azeri capital, Baku.

Zambia’s bonds have reached another grim milestone. The spread on the copper producer’s $750 million of debt maturing in September 2022 rose above 2,000 basis points this week, Bloomberg News reported. At 22%, the yield was 20 percentage points more than U.S. Treasuries of an equivalent maturity. These are levels almost unheard of in the bond world. Only nations already in default, such as Venezuela, have dollar spreads and yields as high as Zambia’s.

India probably lost its spot as the fastest growing major economy to China in the January-March quarter as a chill in domestic and global consumer demand hit manufacturers and service providers, Reuters reported. The slowing economy didn’t stop voters giving Prime Minister Narendra Modi a landslide victory in an election concluded earlier this month. But it puts an onus on him to deliver reforms that can truly unlock growth, which had waxed and waned during his first five years in office.

Lebanon’s plan to bring its budget deficit back into single digits is a step in the right direction, but it needs to regain market access to keep default concerns at bay, Fitch’s rating analyst said on Thursday, Reuters reported. Heavily indebted Lebanon’s government approved a 2019 budget on Monday including deep spending cuts to narrow its projected deficit to 7.6% from 11% of gross domestic product (GDP) and stave off a financial crisis. Fitch put a ‘negative outlook’ - effectively a downgrade warning - on its ‘junk’ B- Lebanon rating in December.

Japan’s negative interest rates have upended many conventions in the local credit market and another was broken on Friday when the nation’s first publicly offered junk bond priced -- at the super-low interest rate of 0.99%. Aiful Corp., a consumer lender that teetered on the edge of bankruptcy a decade ago, sold 15 billion yen ($137 million) of speculative-grade notes due in 1.5 years, Bloomberg News reported.

The governor of China’s central bank sought to ease concerns on Thursday over the growing level of risk at troubled small banks in the country, following the first state takeover of a lender in 18 years, the Financial Times reported. Yi Gang of the People’s Bank of China, speaking at an event in Beijing, said the central bank was “fully capable” of managing risks at small banks, and that it planned to increase the supply of credit to small companies, according to local media and Bloomberg.

A Brazilian judge has named restructuring firm Alvarez & Marsal as judicial administrator of ethanol company Atvos’ in-court restructuring, according to a document seen by Reuters. Atvos, a unit of industrial conglomerate Odebrecht SA, filed for bankruptcy protection on Wednesday after creditor Lone Star Funds got a court decision blocking its cash position, Reuters reported. The company, which has nearly 12 billion reais ($3 billion) in debt, had offered creditors a debt-for-equity swap in the beginning of the year, but failed to reach an agreement.

Corporate debt insurance that fell out of favor after the financial crisis is returning to vogue as default rates rise and a series of high-profile failures pay off for short sellers, Bloomberg News reported. Credit-default swaps trading increased 7% this year, with average weekly volumes of $58 billion, according to the latest data from the International Swaps & Derivatives Association. Payouts on contracts linked to French retailer Rallye SA and U.K. fashion chain New Look Retail Group Ltd.

Barbados’ prime minister is butting heads with creditors over how to cut one of the world’s largest sovereign debt loads, creating a sticking point in the year-long negotiations to restructure the Caribbean nation’s defaulted dollar bonds, Bloomberg News reported. Talks with foreign creditors have dragged on since last June, when Prime Minister Mia Mottley said she would restructure the island’s “unsustainably high” debt burden. While both sides said they are open to continued negotiation, they appear far from consensus.

The European Central Bank has warned that trade tensions pose the greatest risk of knocking global growth, something that could destabilise the eurozone’s financial system, the Financial Times reported. “If downside risks to the growth outlook were to materialise, risks to financial stability may arise,” said ECB vice-president Luis de Guindos, pointing to uncertainty about global growth and volatile financial markets.