Headlines

The private equity owner of Four Seasons, Britain’s largest care home operator, has proposed relinquishing control of the debt-laden company to its creditors for a “nominal sum”, having incurred £450m in losses, the Financial Times reported. Terra Firma’s move comes after the main creditors, H/2 Capital, suggested a debt-restructuring plan aimed at rescuing the struggling business. Under the US hedge fund’s proposition, Terra Firma would have kept an 11 per cent stake in the full business.

Petroleos de Venezuela SA’s credit grade was cut to one notch above default by Fitch Ratings in the aftermath of President Nicolas Maduro’s announcement that the country intends to restructure its global debt, including that of the state-run oil producer, Bloomberg News reported. Fitch lowered PDVSA’s rating to C from CC, citing last week’s announcement by the Venezuelan government, and a missed payment on the company’s bonds due 2027. The grace period for the $81 million interest payment, which was due last month, expires on Monday.

Nigerian President Muhammadu Buhari projects the nation’s budget shortfall will narrow next year as revenue from non-oil sources increases, Bloomberg News reported. Buhari asked lawmakers on Tuesday to approve the 2018 budget with a deficit of 2 trillion naira ($5.6 billion), compared to this year’s estimated fiscal gap of 2.356 trillion naira. Non-oil revenue is projected to triple to 4.2 trillion naira and will include funds raised from “restructuring of government’s equity in joint ventures,” he said in his budget speech in the capital, Abuja, without providing more details.

What happens when you say you’ve taken away a safety net, but nobody believes you? That’s essentially what’s going on in one corner of China’s bond market, with the implication being that someone needs to get hurt before the message hits home. The issue relates to local government financing vehicles, or LGFVs, which boomed a decade ago when China’s Communist leadership let provincial and municipal authorities ramp up borrowing to fund all sorts of infrastructure and property development, Bloomberg News reported.

The largest creditor in Four Seasons, the UK’s largest care provider, has rejected a proposed restructuring plan of its multi-million pound debt, leading to a bruising fight with its private-equity owner, the Financial Times reported. H/2 Capital has launched proposals that it argues create a business less heavily dependent on debt and does more to improve the care-home business. Four Seasons provides care to 17,000 people, and it has publicly said it will default on its debt next month, having failed to reach a deal with bondholders.

There is almost no precedent for what has happened to Greece since 2008. Yet despite the salutary counterexamples of emerging markets that let their currencies float to provide monetary stimulus, Greece has thus far determined to remain a member of the euro area, the Financial Times reported in a commentary. Some attribute this to love: the latest Eurobarometer survey shows 64 per cent of Greeks support “a European economic and monetary union with one single currency, the euro”, while only 32 per cent are opposed.

Mario Draghi has called on banks to cut costs instead of blaming the European Central Bank’s monetary policy for poor profitability, the Financial Times reported. The ECB president said at a conference to mark the third anniversary of the launch of the eurozone’s banking watchdog, the Single Supervisory Mechanism: “There is little evidence that negative rates are undermining banking profitability.” Instead, lenders in the region needed to look into cutting their operating costs to boost profits. The ECB cut rates into negative territory in the summer of 2014.

The head of Brazil’s telecommunications watchdog, Anatel, demanded on Monday that debt-laden carrier Oi SA submit its latest restructuring proposal to the regulator before officially filing it with a bankruptcy court, Reuters reported. Anatel head Juarez Quadros told reporters in Brasilia that the regulator, an Oi creditor due to billions of dollars in unpaid regulatory fines, would wait for the country’s solicitor-general to give an opinion on the company’s proposal before deciding whether or not to vote for it.

South African Airways will meet a group of domestic lenders on Tuesday to negotiate the refinancing of about 6 billion rand ($423 million) in outstanding loans, according to its new chief executive officer, Bloomberg News reported. The banks have in principle agreed to extend the loan terms, Vuyani Jarana, who took the helm at the loss-making airline on Nov. 1, said during an interview at Bloomberg’s Johannesburg office on Monday. The group is led by Nedbank Group Ltd. and includes FirstRand Ltd., Standard Bank Group Ltd., Barclays Africa Group Ltd. and Investec Plc.

Reliance Communications Ltd., the Indian mobile phone operator controlled by billionaire Anil Ambani, said it isn’t paying a dollar bond coupon, Bloomberg News reported. The failure to honor the obligation marks the company’s first missed interest payment on a note in the U.S. currency, and represents the latest setback amid a shakeout in the world’s second-largest telecom market. The firm announced last month the collapse of its merger plans with rival Aircel Ltd., a deal which could have helped it pare debt and better compete with rivals.