Headlines

Bain Capital Credit, part of global investment firm Bain Capital, has won a race to buy a soured debt portfolio from the Italian arm of French bank Credit Agricole, a person familiar with the matter said, the International New York Times reported. The source said the portfolio, with a gross book value of 450 million euros ($521 million), comprises so-called 'unlikely-to-pay' (UTP) loans backed by real estate assets. UTP loans are not yet in default but they are unlikely to be repaid in full.

Mozambique moved closer to becoming a player on the fast-growing global market for liquefied natural gas, eight years after the first major deep-water discovery there, Bloomberg News reported. The development of hydrocarbon resources is crucial for the southern African country, which has struggled this year to service its debt. While the LNG projects will require tens of billions of dollars in funding and take years to develop, they offer a way to stimulate growth in one of the world’s poorest countries. Exxon Mobil Corp.

Europe’s junk-debt investors are gaining ground after years of borrowers chipping away at the safeguards enshrined in the small print of bond documents, Bloomberg News reported. As the balance of power shifts, around 32 percent of Europe’s high-yield bond issuers have altered terms to meet investors’ demands this year, almost double the rate in the last six months of 2017, according to preliminary findings from research firm Covenant Review. “Investors are getting a little leery,” said Glenn Zahn, a credit analyst at Commerzbank AG in London.

A leaked report from a Chinese government-backed think tank has warned of a potential “financial panic” in the world’s second-largest economy, a sign that some members of the nation’s policy elite are growing concerned as market turbulence and trade tensions increase, Bloomberg News reported. Bond defaults, liquidity shortages and the recent plunge in financial markets pose particular dangers at a time of rising U.S.

Imagine India’s GDP growth had collapsed to 3 percent; inflation was about to hit double digits; exports were tanking; and the country’s twin deficits – in the government’s budget, and in the nation’s current account – were out of control. It’s only when the Reserve Bank of India tries to imagine such a dire scenario for March 2019 that its simulation exercise for bad loans throws up a figure of 17.3 percent of state-run banks’ total assets, a Bloomberg View reported.

Steinhoff, the global retailer embroiled in South Africa’s biggest ever corporate scandal, sought an urgent extension to talks with creditors over restructuring its debt, the Financial Times reported. The company, which discovered a multibillion-euro black hole in its accounts last December that wiped $15bn from its shares, said on Wednesday that it might have to place its European operations into “local reorganisation procedures” if creditors did not agree to another three weeks of talks on restructuring by Friday.

Giuseppe Conte, Italy’s prime minister, slammed key features of a eurozone reform plan hatched last week by France and Germany, staking out a hardline position on economic policy as well as immigration ahead of his first EU summit as head of the populist government in Rome, the Financial Times reported. In a speech to parliament on Wednesday morning, Mr Conte said it was the “moment to advance risk sharing, which has been left too far behind”.

China’s domestic bonds, denominated in renminbi, have been popular with international investors this year, the Financial Times reported in a commentary. But changes in key market conditions — including an upsurge in corporate defaults and the renminbi’s slide against the US dollar — raises questions over the sustainability of inflows.

Novo Banco is facing a fresh challenge from a London hedge fund that says the bank has unwittingly defaulted on certain bonds, further complicating a crucial debt sale the Portuguese lender is looking to complete this week, the Financial Times reported. Novo Banco, the lender created out of the failure of Portugal’s Banco Espírito Santo (BES) in 2014, is already the subject of long-running litigation from international investors including BlackRock and Pimco, who lost money due to a controversial debt transfer at the end of 2015.

Shares in Europe’s largest banks have shed almost a fifth of their value in the past four months as hopes that economic growth will spur a recovery in financials crumble, the Financial Times reported. The Stoxx European Banks index has lost nearly 20 per cent of its value since the start of February as analysts and investors scale back assumptions for when higher growth will boost long-term interest rates in Europe, which are one of the most important drivers of bank profitability.