Headlines

Turkey’s failed coup is dealing yet another blow to the nation’s banks, which are already under pressure from rising bad debts and a slump in tourism, Bloomberg News reported yesterday. Istanbul-based lenders Yapi ve Kredi Bankasi AS and Sekerbank TAS canceled about $800 million of debt sales this week after the attempt to unseat President Recep Tayyip Erdogan and the ensuing political unrest spooked investors. Neither bank forecast when it may return to the credit markets, with Sekerbank saying it would contact fixed-income investors in due course.

Low interest rates around the world are fueling a familiar threat of housing bubbles, and central bankers in a number of key economies feel powerless to stop them, the Wall Street Journal reported today. The problem is being acutely felt in Canada, where home prices are soaring even as the country’s energy- and mining-dependent economy slows. Sweden and Australia are dealing with similar surges in the value of homes, leading officials in all three countries to worry about the risk of a destabilizing bust.

As worries that the European Central Bank will soon run out of sovereign debt to buy for its quantitative-easing program persist, Europe's over-leveraged governments are declining to lend a hand, Bloomberg News reported today. According to a study by JPMorgan Chase & Co., net issuance of new debt this year will fall well short of the ECB's appetite, which runs at a monthly clip of 80 billion euros ($88 billion). While that's just a drop in the ocean compared with the total "eligible universe," the data illustrate the speed with which the central bank is eating up the market.

South Africa’s central bank stood by its main interest rate Thursday, as the threat of near-recession outweighed intensifying inflation risks facing the continent’s most developed economy, the Wall Street Journal reported today. South African Reserve Bank Governor Lesetja Kganyago said the risks to growth were too great raise the bank’s main “repo” rate above 7.0 percent. Kganyago has raised rates three times in the past year in an effort to curb inflation that has shot above the bank’s 6 percent target ceiling.

Terrorism, air-traffic-control strikes and Brexit have caused a sequence of shocks that have hit demand causing European airlines have been forced to slash ticket prices to fill planes, the Wall Street Journal reported today. Earnings expectations have been scaled back. “You have more terrorist events this year than in any year that anyone can remember,” said Carolyn McCall, chief executive of budget airline easyJet PLC.

The English Court has recently considered who can be recognized as “foreign representatives” under the Cross-Border Insolvency Regulations 2006 (CBIR) in the case of Re 19 Entertainment Limited, about a US company in chapter 11, the National Law Review reported yesterday.

Singapore is seeking to enhance its position as a center for debt restructuring by giving its insolvency law some of the powers of the U.S. bankruptcy code’s chapter 11, just as companies worldwide default on bonds at the fastest pace since the global financial crisis, Bloomberg News reported today. The government has “broadly accepted” 17 recommendations submitted by a committee after a yearlong review, the Ministry of Law said in a statement.

Brazil's telecommunications industry watchdog Anatel yesterday proposed a list of four candidates to become the in-court administrator of phone carrier Oi SA, which last month filed for the nation's biggest-ever reorganization, Reuters reported. Brasilia-based Anatel picked Alvarez & Marsal Holdings LLC, BDO LLP, Deloitte & Touche LLP and PricewaterhouseCoopers as candidates for the role, Anatel said in a statement. The list was sent to Fernando Cesar Ferreira Viana, a Rio de Janeiro judge overseeing Oi's bankruptcy protection proceedings, the statement said.

Asset manager Brookfield has put $1 billion into a joint venture with India’s biggest bank to recapitalise and provide financial support to distressed corporate clients, the Financial Times reported today. The State Bank of India (SBI) announced that Brookfield, which specializes in infrastructure and private equity, had not only committed 70 billion Rupees ($1 billion) to a fund that will invest in stressed assets but also plans to help manage the recapitalized businesses. The SBI announcement represents a new tack from a state-owned banking sector hamstrung by mounting bad debts.

A very local problem in China is being exported at an alarming rate, according to a Bloomberg commentary yesterday. Debt from special-purpose vehicles linked to municipal and provincial governments -- leverage that central authorities are trying to extinguish -- is becoming more common in overseas markets. What's worse, lately it's been the weakest cities and provinces panhandling to international investors, according to the commentary.