Headlines

Venezuela’s state oil company, one of the most distressed credits in emerging markets, hired BancTrust & Co. to help arrange calls with investors, according to a person with direct knowledge of the matter, Bloomberg News reported. The calls with Petroleos de Venezuela SA officials including Chief Financial Officer Simon Zerpa, set to begin July 10, are meant to improve communication with bond investors and will be invitation-only to some of the company’s biggest creditors and emerging-market funds, said the person.

Investors have damped their enthusiasm for European equity and bond funds, as fears over the path of quantitative easing in the region has sparked a global market sell-off, the Financial Times reported. Funds that invest in European stocks ended their longest run of inflows since the end of 2015, according to data from EPFR Global, with $480m being withdrawn by investors for the week ending July 5 — the first week of outflows since the end of March.

The European Central Bank has renewed debate over its €60bn of monthly asset purchases, sending government bond prices and stock markets lower on both sides of the Atlantic as markets anticipated a possible end to the eurozone’s ultra-loose monetary policy, the Financial Times reported. The minutes of the ECB’s June meeting, published on Thursday, showed that officials discussed whether to end the central bank’s promise to step up the pace of asset purchases if needed to stimulate the eurozone economy.

CaixaBank is marketing the first Spanish Tier 2 since subordinated debt was wiped out at Banco Popular in June, and just a day before Bankia is expected to bring its inaugural Additional Tier 1, Reuters reported. Orders of over €2.75bn by the 11NC6's second update implied that investors are willing to overlook the punitive treatment of Tier 2 debt at Popular, even for second tier lenders. "It is a good credit and I'd expect it to go well, and the price looked fair," said a banker off the deal.

Dana Gas PJSC won an extension of a London court order blocking investors from taking action over $700 million in disputed Islamic bonds until after a trial scheduled for as soon as October, Bloomberg News reported. Dana, which has operations in Egypt and Iraq, sent shockwaves through the world of Islamic finance by announcing in June that its own sukuk were not Shariah compliant. The U.K. court hearings are part of a global legal effort by the company, including filings in the United Arab Emirates and British Virgin Islands, to stop investors from trying to force payment.

Bets on a Venezuelan default are climbing as international reserves slump toward $10 billion amid anti-government protests and President Nicolas Maduro’s push to rewrite the constitution. The implied probability of the country missing a payment over the next 12 months rose to 56 percent in June, according to credit-default swaps data compiled by Bloomberg. That’s the highest level since December, Bloomberg News reported. The odds of a credit event over the next five years increased to 91 percent last month.

Just as global investors get a new channel to access China’s $9.8 trillion onshore bond market, it’s starting to look like one that they might recognize. Gone are the days when China’s corporate debt was all pretty much priced the same, with an implicit government backstop giving buyers little reason to demand higher returns from some borrowers over others, Bloomberg News reported. Things started changing in 2014, when the Communist Party leadership with little warning began to allow defaults.

Ten years ago, Essar Steel was leading a rush of Indian corporate investment, exuberantly funded by the country’s dominant state-owned banks, the Financial Times reported. It paid $1.6bn to buy Canada’s Algoma Steel, while pledging billions more to fund projects in Minnesota and Trinidad as well as a doubling of production at its flagship Indian mill to 8.5m tonnes a year.

Banca Monte dei Paschi di Siena has confirmed the European Commission has given formal approval for its five-year restructuring plan, a move paving the way for the Italian state to take over the lender. The backing by the EU starts a precautionary recapitalisation of up to €8.8bn, removing a significant weight from the Italian financial system, the Financial Times reported. Monte Paschi has weighed on Italian banking stability since the European sovereign debt crisis.

Nigeria's central bank and its telecoms industry regulator have intervened to save the country's fourth largest telecoms firm from collapse after talks with local banks to renegotiate a $1.2 billion loan failed, a regulatory source said on Tuesday. Etisalat Nigeria is the biggest foreign-owned victim of dollar shortages plaguing the country due to lower oil prices and economic recession, leaving the company struggling to make repayments to lenders and suppliers, Reuters reported.