Headlines

Venezuela’s willingness to honor its debts is coming under fresh scrutiny even as the will-they-or-won’t-they jitters surrounding a $2.1 billion payment this week have largely subsided. The bonds from the state oil company maturing Wednesday traded as low as 94 cents on the dollar last week, showing a lack of confidence that Petroleos de Venezuela SA would come up with the needed cash, Bloomberg News reported. The securities shot up to 97 cents on Friday after PDVSA issued a statement saying it had already begun the payment process.

Japanese investors ramped up their selling of French government debt to a record pace in February as bondholders shuddered at polls showing rising support for eurosceptic candidate Marine Le Pen in the country’s upcoming presidential elections, the Financial Times reported. Money managers in Japan dumped ¥1.58tn (€13.4bn) of French bonds in the fourth consecutive month of net sales as the country’s long-running favourite for the presidency, François Fillon, was engulfed by an embezzlement scandal.

Venezuela’s state-owned oil company should be stopped from plundering its U.S. subsidiary Citgo Holding Inc., according to court papers filed Monday evening by a creditor seeking $1.4 billion from the South American country. Canadian mining company Crystallex International Corp. asked a Delaware federal judge for an injunction blocking Petróleos de Venezuela SA—also known as PdVSA—from taking cash or transferring assets from Citgo, the U.S. crude refiner owned by PdVSA.

The Pension Protection Fund offers a sensible form of insurance. But by its nature, insurance creates opportunities for abuse. A payout owed when an adverse event occurs creates an incentive to bring about that very event. The PPF pays compensation to members of UK defined-benefit schemes when the company sponsoring their plan becomes insolvent, leaving insufficient assets to pay what is owed, the Financial Times reported. The risk is easy to see.

Amid “Trumpflation” trades and nerves over eurozone political risk, one corner of Europe’s debt markets has been quietly motoring along: Cyprus. Having undergone a €10bn banking rescue at the hand of creditors in the EU and International Monetary Fund in 2013, Cyprus exited its bailout programme last year and has seen its government borrowing costs tumble to 15 year lows since, the Financial Times reported. The yield on the country’s comeback 10-year bond issued in late 2015 has fallen to as low as 3.2 per cent from a peak of just over 4 per cent at the start of last year.

Greece has reached a deal on economic reforms with the monitors of its €86bn bailout, paving the way for the country to keep getting money from the programme, the Financial Times reported. The agreement centres on tax and pension reforms that Athens must pass into law now, to be implemented in 2019 and 2020. The accord was hailed by euro area finance ministers, meeting in Malta, as a major breakthrough after months of gridlock over the next stages of Greece’s aid programme.

China’s anti-corruption investigators are targeting the country’s top insurance regulator, throwing doubt over an industry that has been behind a wave of blockbuster global deals but has raised concerns about financial risk in the world’s second-largest economy, the International New York Times DealBook blog reported.

With the government recently notifying the cross-border insolvency provisions under the insolvency and bankruptcy law, claims of foreign creditors, as well as those of Indian creditors on foreign assets of the company going insolvent, could be satisfied by courts. However, experts believe that notifying the rules is not enough and New Delhi will have to sign agreements with governments of other countries in this regard, the Business Standard reported. Before this, creditors, particularly foreign ones, had been raising this issue.

Ratings agency Fitch is likely to follow rival Standard & Poor’s and cut South Africa’s sovereign credit rating to below investment-grade, analysts said, an outcome that would underscore worries about political uncertainty and prompt a further sell-off in assets, the Irish Times reported. The ratings agency was considering its position as thousands of South Africans took to the streets on Friday to urge President Jacob Zuma to step down after a turbulent week in the wake of his firing of respected finance minister Pravin Gordhan.

Accounting firm BDO declined to replace PriceWaterhouseCoopers in the in-court restructuring of Brazilian carrier Oi SA, BDO said in a statement on Friday. The judge overseeing the restructuring dropped PwC from the case on March 31 alleging the firm made accounting mistakes in the biggest bankruptcy filing in the country's history. In his decision, judge Fernando Cesar Viana appointed BDO to replace PwC. But BDO said in Friday's statement that it had decided not to take the task, despite keeping its work as Oi's auditor through 2019.