Headlines

China’s crackdown on shadow banking is raising concern among bond investors about local borrowers’ ability to make repayments as a record 1.8 trillion yuan ($285 billion) of notes come due this year, Bloomberg News reported. Regulators have stepped up efforts to patch loopholes in off-balance sheet financing in the last couple weeks, moves that will effectively block most fundraising channels for local borrowers. Concern that some local government financing vehicles may not be able to repay debt has helped push up the yield premiums on AAA rated LGFV notes to near the highest in three years.

Crisis-hit commodity trader Noble Group is moving closer toward a debt restructuring deal with its lenders, the Financial Times reported. The company’s chairman Paul Brough told shareholders at a meeting in Singapore on Thursday that talks had been “constructive” and were “moving forward”. “I’m hopeful that we will reach a conclusion at some point in the near future,” said Mr Brough, a restructuring expert who was appointed chairman in May.

Thursday’s European Central Bank policy meeting did not look like it was going to be an exciting start to Mario Draghi’s year — but a bullish account of the final vote of 2017 has changed that. The minutes of the December meeting, published this month, signalled that the ECB president faces mounting threats to his go-slow approach to withdrawing the bank’s crisis-era support, which will be under scrutiny on Thursday, the Financial Times reported.

A London court has sided with Franklin Templeton Investment Management and Russia's Sberbank in a ruling relating to International Bank of Azerbaijan's (IBA) debt restructuring, potentially delaying the process, the International New York Times reported on a Reuters story. Last year, state-owned IBA proposed a plan to restructure $3.3 billion of its debt and said in July it had received approval from creditors holding 93.9 percent of the affected credits.

Carillion Canada has been granted protection from creditors by the Ontario Superior Court under the Companies’ Creditors Arrangement Act, Globalnews.ca reported. The Canadian branch of insolvent British construction giant and state contractor Carillion PLC said on its website on Thursday that its decision to seek CCAA protection was forced by the compulsory liquidation of its parent company earlier this month when it couldn’t arrange short-term financing. It said that event gave rise to “unexpected liquidity challenges” for the Canadian operations.

China’s Communist leadership has tightened the regulatory screws on some of the nation’s largest, private-sector conglomerates in the name of financial stability, Bloomberg News reported. That’s made things a little less stable for investors in some of those companies’ securities. The effects have varied. Bondholders have generally been the worst hit, though stockholders in some of HNA Group Co.’s units have seen shares suspended from trading.

JSW Steel Ltd., India’s biggest producer, is interested in snapping up two struggling rivals, Bhushan Steel Ltd. and Monnet Ispat & Energy Ltd., as part of an industry-wide wave of consolidation sparked by a new bankruptcy law designed to clear-out distressed assets, Bloomberg News reported. The Mumbai-based company will partner with Japan’s JFE Holdings Inc., which holds a 15 percent stake in JSW Steel, and other investors to bid for the assets, Sajjan Jindal, chairman of JSW Group, said in an interview with BloombergQuint at the World Economic Forum’s meeting in Davos.

Ministers are coming under increased pressure to release risk assessments on Carillion made in the months before the contractor’s collapse, the Financial Times reported. The Labour opposition has used an obscure piece of Parliamentary procedure to try to force the government to publish how they perceived the condition of all 30 or so “strategic suppliers” to the state. This “motion for a return” was passed by default on Wednesday night without a vote in the House of Commons.

How much risk reduction is enough? It’s a question being asked of Germany and its northern eurozone allies in the debate about what to do next with Europe’s banks, the Financial Times reported. Dealing with financial risk is crucial to completing the EU’s Banking Union — a project born in the teeth of the eurozone crisis to prove Europe was serious about sorting out its financial system. It is a blend of tighter regulation and new EU-wide authorities with the tools to supervise and intervene when things go wrong.

Unsecured creditors of the failed airline Air Berlin should not expect to recover any of their claims, according to an insolvency report on Wednesday. The report, written by insolvency manager and administrators Lucas Floether and Frank Kebekus, said any remaining hope for creditors to recover assets evaporated after Lufthansa scrapped plans to buy Air Berlin's Niki unit for 189 million euros (£165 million), the International New York Times reported on a Reuters story.