Headlines

The premium investors are demanding to hold French over German 10-year debt has been given a fresh kick higher in the last few minutes after Francois Fillon said he would not take himself out of the running to be the country’s next president, the Financial Times reported. France’s 10-year yield gap with Germany – a measure of perceived riskiness of its debt – is now at its highest level since November 2012, swelling to 76 basis points and the widest margin since the immediate aftermath of the eurozone’s debt crisis.

It took nearly a year for Britain’s Premier Oil PLC to restructure $3.9 billion in debt, because it had to satisfy more than 40 investors. On Friday the oil and gas company announced it had struck a deal with private lenders and bondholders, The Wall Street Journal reported. “The process has taken longer than what would have been ideal,” said finance director Richard Rose in an interview with CFO Journal. “We have been talking to our lenders for over 11 months.” The company has aligned maturity dates to May 31, 2021, giving it more flexibility on its covenants.

The domestic shipping industry, which is already facing difficulty due to a long recession, has been hit by one of its biggest crises due to the collapse of Hanjin Shipping, the Korea Times reported in a commentary. Pressed by snowballing debt, Korea's largest shipper filed for court receivership in August last year. In an effort to stay afloat, the company sold its core assets, including vessels that operate on its lucrative Asia-U.S. route.

Greek farmers, many on tractors, have once again been blockading roads and border posts amid mounting signs that the country long at the epicentre of Europe’s debt woes is – once again – teetering towards crisis. Protesting farmers have been a regular feature of the social unrest that has sporadically gripped Greece, the Irish Times reported. It is now more than seven years since the Greek financial crisis erupted and the debt drama has often had a déjà vu quality about it.

A year ago, Ningbo Joyson Electronic Corp. would have been an unlikely name on a shortlist of candidates to rescue Takata Corp., the Japanese air-bag maker that’s behind the biggest safety recall in automotive history. The Chinese components supplier, founded by a former TRW Automotive Inc. executive, made less than a quarter of Takata’s annual revenue, employed a workforce that’s less than half the size of its peer, and was about 70 years younger, Bloomberg News reported.

Premier Oil is preparing to seek finance for a $1.5bn development off the Falkland Islands, as the UK company refreshes its strategy after its long-awaited debt restructuring deal last week, the Financial Times reported. Tony Durrant, Premier chief executive, said calmer relations between the UK and Argentina had improved the outlook for investing in the Falklands, where Premier has an estimated 520m barrels of resources in a field called Sea Lion.

After Mozambique’s default, investors are wondering who’s next in Africa. Bloomberg’s sovereign credit risk model -- which uses data including budget deficits, foreign reserves, non-performing bank loans and political instability to calculate default probabilities -- flags four candidates among African Eurobond issuers: Senegal, Tunisia, Ghana and Zambia. Mozambique became the first African country to default on dollar bonds since Ivory Coast in 2011 when it failed to settle an almost $60 million coupon initially due in January. It had a 15-day grace period that ended on Thursday.

The economy of the 19 countries that use the euro got off to a strong start in 2017 even as inflation pressures continue to mount in the wake of the recent rise in oil prices, a closely watched survey showed Friday. Financial information company IHS Markit said its gauge of business activity across the manufacturing and services sectors held steady at a five-and-a-half-year high of 54.4 points in January, still way above the 50 threshold between expansion and contraction, The Washington Post reported. Encouragingly, the index’s gauge of job creation spiked to a near nine-year high.

Europe’s biggest banks can be shut down in line with the bloc’s new bank failure rules without losses snowballing and causing wider mayhem, according to a European Central Bank study, Bloomberg News reported. Based on confidential bank-by-bank data, the study shows that resolving any one of the euro area’s 26 largest banks by applying the tools of the new European Union’s new rule set -- imposing losses on shareholders and creditors instead of resorting to state aid -- wouldn’t bring down another lender.

A debt default is generally not cause for celebration. Not defaulting, by contrast, should be a good thing. But in China, a lack of defaults has said more about inadequate processes for dealing with failing companies than it does about their financial health — not to mention a lack of political will to allow companies to fail. That is slowly changing. Lately, defaults have been rising as the government tries to restructure ailing state-owned enterprises, the Financial Times reported.