Headlines

Last year, the coming Italian election in March was seen by some as having the potential to split apart the eurozone. Now, with just five weeks to go, not so much, The Wall Street Journal reported. Many Italian assets have rallied and outperformed European peers, thanks in part to the country’s expanding economy and shrinking unemployment. In addition, the perceived threat from antiestablishment politicians has eased. All of which has soothed investor concern as the vote approaches, a trend that isn’t uncommon to elections in the country.

ZZ Capital International Ltd., the private equity firm controlled by Chinese shadow-banking tycoon Xie Zhikun, is preparing to dramatically scale back its operations, according to people familiar with the matter. A number of senior executives at the Hong Kong-based fund, including at least two seasoned dealmakers brought in from global advisory firms, are currently negotiating severance packages, the people said, asking not to be identified because the discussions are private, Bloomberg News reported.

Some borrowers with interest-only mortgages may lose their homes as a result of shortfalls in repayment plans, the U.K.’s Financial Conduct Authority warned. The FCA has identified three peaks in interest-only mortgage repayments, the first of which is currently underway, Bloomberg News reported. Defaults are less likely in the present wave of maturities because the homeowners are approaching retirement and have higher incomes. The next two peaks, from 2027 through 2028 and in 2032, are more at risk of shortfalls, the regulator said.

This might be the year China gets its first four-letter default. Or so says S&P Global Ratings, discussing the possibility that an LGFV, or local government financing vehicle, could finally go belly-up, Bloomberg News reported in a commentary. Why should global investors care? More than 95 percent of the $1 trillion asset class is yuan-denominated and trades onshore. The offshore portion is small, and showing little sign of distress. The coupon on a $500 million, three-year dollar bond recently issued by Central Plaza Development Ltd. was 3.875 percent.

Top executives at Royal Bank of Scotland say they will no longer fight the main conclusions and recommendations of a withering independent review of alleged mistreatment of small business customers by the bank, the Financial Times reported. Sir Howard Davies, the chairman, said during a bruising hearing before MPs on Tuesday that RBS “no longer thinks it is useful to have an argument” with the UK’s Financial Conduct Authority about the review of the bank’s Global Restructuring Group.

For German businessman Ralf Schlesselmann, these are heady times. “We’re totally maxing out,” he says. Mr Schlesselmann runs a 100-year-old family-owned wooden-pallet maker in Asendorf near Hanover that is working almost round the clock to cope with surging orders, the Financial Times reported. “We’re seeing increased demand from all sectors,” he says. “We’re at very close to full capacity.” The humble wooden pallet is an unremarkable thing.

Bulgaria needs to maintain strong economic growth and fiscal prudence for a relatively long time in order to adopt the euro, Central Bank Governor Dimitar Radev said on Tuesday. The Balkan country, which holds the rotating EU presidency, plans to file its application to enter the ERM-2, the two-year obligatory precursor to the euro, by the end of June, the International New York Times reported on a Reuters story.

Banks and investors involved in the court reorganization of energy group Abengoa Bioenergia Brasil SA hope to get paid through a potential sale of the company’s two sugarcane mills, two sources close to the matter told Reuters. There are non-disclosure agreements signed with four potential bidders for the mills, said one of the sources, Reuters reported. Two of the suitors already operate in the sector while the other two are investment funds, the source said.

Swiss company Schmolz + Bickenbach has been chosen by a Strasbourg court to buy troubled French steelmaker Ascometal, the court said on Monday, with Schmolz + Bickenbach’s bid prevailing over a rival one from Liberty House, Reuters reported. Ascometal, which makes specialty steel and employs around 1,300 workers, filed for court protection last November, and takeover offers for the company had come under the scrutiny of the Strasbourg court. Like Ascometal, Schmolz + Bickenbach is a producer of specialist steel products.

Noble Group Ltd. reached a deal to restructure $3.5 billion in debt, saving the troubled commodity trader from bankruptcy at the cost of handing control to creditors and all but wiping out current shareholders, Bloomberg News reported. After a three-year crisis marked by massive losses, writedowns and controversial accounting, Noble management, bank creditors, and bondholders reached an in-principle agreement that will convert half of the debt -- roughly $1.7 billion -- into new equity, the company said on Monday.