Headlines

Things are looking up for investors in billionaire Anil Ambani’s Reliance Communications Ltd. after the Indian phone company staved off insolvency by agreeing to sell assets to the chairman’s brother, Bloomberg News reported. But lenders still face a potential hit on their earnings. That’s the view of some observers including Pavitra Sudhindran, credit analyst at Nomura Holdings Inc., who warns that provisions connected with nonperforming loans could sting. “That could hurt their earnings, though we don’t know the extent of the provisions they have already made and are yet to make,” she said.

Angola has announced plans to ditch its currency peg to the dollar and restructure its debts, becoming the latest previously high-flying African country to bite the default bullet, the Financial Times reported. Jose de Lima Massano, the central bank governor, and Archer Mangueira, the country’s finance minister, announced at a press conference on Wednesday that Angola – the continent’s second-biggest oil exporter after Nigeria – would have to shift to a currency trading band and “renegotiate” its debts, according to wire reports.

Venezuela’s bonds have lost about three-quarters of their value, reflecting a dozen missed payments by the government and the state-owned oil company. But many of their bondholders are still feeling flush, The Wall Street Journal reported. A number of investors have made their money back and more, thanks to coupon payments topping 13% and large principal payments that typically begin three years before a bond matures. A recent example includes bonds from state-oil company Petróleos de Venezuela SA, or PdVSA, which matured in November.

U.S. bank stocks had a great run in 2017: Europeans, not so much. Those betting on a Continental banking catch-up in 2018 shouldn’t get their hopes up. European banks have made great strides. More certainty over regulation, stronger economies and better expected lending growth are all in their favor. But they are still saddled with negative interest rates in the eurozone and Switzerland, which hurts interest income, The Wall Street Journal reported.

Dutch tidal turbines developer Tocardo International BV has filed for insolvency the same day it became official that Canada’s Tribute Resources Inc will not buy out the company, Renewables Now reported. Tocardo has secured a deferral of payment to creditors. A creditors meeting will be held on March 27, 2018. In early August 2017, Canadian energy company Tribute Resources unveiled its intention to buy the 53.5% stake it does not already own in Tocardo and focus on tidal and marine power development. The plan included changing Tribute’s name to Tocardo Energy Inc following the combination.

A group representing airline passengers has taken legal action to shift insolvency proceedings for budget airline Niki to Austria from Germany, in a move that could endanger the sale of the Air Berlin unit to Britain’s IAG, Reuters reported. Fairplane, seeking to recover more than 1 million euros ($1.2 million) it says Niki owes to passengers, filed separate legal cases on Tuesday to block insolvency proceedings in Berlin and to open them instead in Austria.

India’s parliament on Tuesday approved amendments to the Insolvency and Bankruptcy Code Bill to bar owners of defaulting firms from bidding to buy back assets when they are auctioned as part of bankruptcy proceedings, Reuters reported.

A bunch of stressed Indian stocks are getting a lot of investor love. A Bloomberg index of 11 indebted companies that are in bankruptcy court surged 31 percent in December on speculation that the new insolvency law will push the firms’ founders and lenders to find quick solutions, Bloomberg News reported. In comparison, the broader S&P BSE500 gained 3.5 percent.

Venezuela has defaulted on another debt obligation, according to S&P Global Ratings, intensifying investor fears about the country’s ability to make more than $9 billion in bond payments due in 2018,The Wall Street Journal reported. The ratings firm said Tuesday that Venezuela failed to make $35 million in coupon payments for its bonds due in 2018 within a 30-day grace period. The government and the state-owned oil company are now behind on $1.28 billion in payments, according to investment firm Caracas Capital. S&P classifies these missed payments as defaults.

Year-end turmoil rocked Europe’s money markets in 2016, so traders were as ready as they could be this time around. And yet, it happened again, The Wall Street Journal reported. On Dec. 29, the last trading day of 2017, the interest rate on one-day loans secured by German government bonds plummeted to minus 4.4%, from minus 0.7% a week before. There was a similar plunge for French, Dutch and Belgian bonds. The sudden drop—roughly as deep as 2016’s—reflects a scramble by banks to temporarily reduce lending and borrowing on the day regulators assess their balance sheets.