Headlines

The Venezuelan debt crisis could be on the verge of a new milestone as a $650 million bond matures Tuesday with little hope it’ll get paid, Bloomberg News reported. The notes from the state-run electric utility were always considered among the country’s riskiest securities because the downsides to a default are relatively minor. They don’t contain any cross-default rules that would affect sovereign debt or notes from the state oil company, and the utility doesn’t have any overseas assets that investors could try to seize.

Investors fretting that Zambia may have more debt than it’s let on have sent the nation’s Eurobonds tumbling, Bloomberg News reported. Yields on the copper-producing country’s $1.25 billion amortizing bonds due in 2027 rose as much as 54 basis points, the most since February 2016, before paring the increase to 50 basis points by 4:35 p.m. in London. At 8.45 percent, the yield was the highest in more than a year. Banks including Nomura Holdings Inc. say the government may have greater external liabilities than it’s made public.

Avanti Communications, the UK satellite company, has warned that it will be put into administration unless shareholders accept a debt-for-equity swap that would allow it to raise fresh funding, the Financial Times reported. If approved, the proposed swap would leave US bondholders, led by Solus Funds, controlling 42 per cent of the company’s stock. Avanti also wants to amend the terms of bonds due in 2021 and 2023. The plan would reduce its debt by 60 per cent and cut its annual cash interest payments by more than 70 per cent.

Investor sentiment for the eurozone has dropped for the third month in a row, with worries about deteriorating Sino-American relations weighing heavily on the outlook. The Sentix eurozone index dropped to 19.6 in April, from 24 the previous month and 32.9 at the start of this year, the Financial Times reported. A sub-index tracking expectations turned negative for the first time in almost two years. “Investors are deeply concerned about US President Donald Trump’s customs announcements, which trigger countermeasures (China),” said Patrick Hussy, Sentix’s head of portfolio management.

Italy's Banca Monte dei Paschi di Siena (MPS) will meet investors in London on April 4, two sources close to the bank told Reuters, as the Tuscan lender seeks to soothe concerns over its turnaround progress, the International New York Times reported on a Reuters story. Monte dei Paschi is grappling with falling revenues and high bad loans that led to an 8.1 billion euro ($10 billion) bailout last year, with Rome injecting 3.9 billion euros into the country's fourth-largest bank and investors shouldering the rest.

Zambia is facing tough questions over its foreign-debt levels from investors who think the real number may be more than double what the government says it is, Bloomberg News reported. Lenders including Nomura Holdings Inc. believe the state hasn’t come completely clean on how much external borrowing it’s undertaken. This is raising concern the southern African nation may be headed for a similar situation to neighboring Mozambique, where hidden debts led to default and the government is seeking to restructure.

German industrial production dropped in February by the widest margin in two and a half years, according to data released on Friday that underscore the headwinds faced by the eurozone’s powerhouse economy in the first quarter, the Financial Times reported. The wide-ranging gauge of German industry slumped 1.6 per cent in February from the previous month, according to the Federal Statistics Office. It was the steepest fall since August 2015 and compared with economist expectations of a 0.3 per cent rise, according to FactSet data. Energy production was a standout, jumping 4 per cent.

South Korea on Friday urged General Motors Co’s local subsidiary and labor union to reach a wage deal swiftly, saying the government will be able to discuss support for the money-losing unit on condition of an agreement. GM, which in February announced it would shut one of its South Korean factories, said it will file for bankruptcy should the union refuse to make concessions by April 20, Reuters reported. GM has also asked for financial support from the government.

United Arab Emirates energy firm Dana Gas said on Sunday it had received a new injunction from the English High Court restricting its ability to pay dividends or increase its debt, the International New York Times reported on a Reuters story. The injunction is the latest salvo in a complex legal battle in the UAE and Britain which began last year when Dana halted payments on its $700 million of Islamic bonds, arguing the sukuk had become unlawful because of changes in Islamic finance. Since then, sukuk holders have been trying to force the company to redeem the sukuk.

Russia's Sberbank may get around 30 percent of Croatia's indebted food group Agrokor following a debt settlement, a Croatian newspaper reported on Saturday. Agrokor, the biggest employer in the Balkans, was put under state-run administration last April and has until July to reach a final deal with creditors, the International New York Times reported on a Reuters story. The company said last month it expected to have debt settlement terms ready by April 10, and creditors would vote on the deal before July 10, the legal deadline for avoiding bankruptcy.