Headlines

Brazil’s economy suffered its biggest contraction in 2½ decades last year as the country’s recession stretched through the fourth quarter with little sign of abating, The Wall Street Journal reported. Gross domestic product shrank 3.8% in 2015, Brazilian Institute of Geography and Statistics, or IBGE, said Thursday. That was the biggest drop since 1990, when the economy contracted 4.3%. But in contrast to that downturn, which was preceded and followed by at least modest expansions, few economists predict a recovery soon for Latin America’s biggest economy.

Norwegian shipping firm Bulk Invest said on Thursday it had filed for bankruptcy after failing to win backing for a financial restructuring needed to survive in difficult market conditions, Reuters reported. Spot rates in the dry bulk shipping market are close to all-time-lows and far below breakeven rates after years of lower demand growth and a wave of new dry bulk vessels entering the market. Bulk Invest is the first European dry bulk shipping firm to go bankrupt this year.

Abengoa's majority shareholder is ready to have its stake diluted to around 5 percent in a bid to receive new emergency cash and facilitate a debt restructuring deal, four sources close to the talks between the firm and its creditors said. The sources said creditor banks and bondholders had set two conditions prior to discussing a debt-for-equity swap, a potential haircut and the injection of new liquidity to save the energy firm from becoming Spain's biggest ever bankruptcy.

Moody’s, the ratings agency, has cut its outlook on China’s government credit to ‘negative’ from ‘stable’ on the back of a growing debt burden in the world’s second largest economy, and the challenges of reform, the Irish Times reported. In a report issued days before China’s leaders gather to approve the latest Five-Year Plan for the economy at the National People’s Congress, Moody’s uncertainty about Beijing’s capacity to implement widescale reforms to address imbalances in the economy.

Debt-laden Spanish energy group Abengoa has appointed a new chairman to try to distance the firm's management from its main shareholder and facilitate a debt restructuring, Reuters reported. The Seville-based company is racing to reach an agreement with its banks and bondholders by March 28, when it would risk a full-blown insolvency process after piling up debts of almost 9.4 billion euros ($10 billion). Antonio Fornieles Melero will become executive chairman, replacing Jose Abascal, the company said in a statement to Spain's stock exchange regulator.

Investors facing huge losses on Novo Banco SA bonds suffered another defeat, Bloomberg News reported. The group that oversees the credit-default swaps market declined to amend any contracts insuring the Portuguese bank’s debt, probably killing off swapholders’ last chance of getting a payout following the transfer of about 2 billion euros ($2.2 billion) of bonds to a bad bank. All committee members voted against changes, the International Swaps & Derivatives Association said in a release on Wednesday.

Irish motorists are likely to face higher insurance premiums following a court ruling which forces the Motor Insurance Bureau of Ireland (MIBI) to assume €90 million in liabilities from the collapse of Setanta Insurance, the Irish Times reported. The Court of Appeal unanimously rejected an appeal by the MIBI against an earlier High Court decision that it must pay out on the 1,750 outstanding claims left in the wake of Setanta’s liquidation in 2014.

The proposed sale of a state-owned iron-ore port in Australia illustrates how quickly the slump in commodity prices has ground down the hopes that once accompanied the country’s resources boom, The Wall Street Journal reported. The lower house of Western Australia’s legislature last week approved plans to sell a long-term lease over the Utah Point port in the state’s Pilbara iron-ore mining region.

Traffic along one of Europe’s busiest highways, which used to flow unimpeded, now often backs up for miles at a newly installed checkpoint, where a phalanx of German police officers screens trucks and cars for hidden migrants, the International New York Times reported. At this border crossing, as a result, Austrians who work in Germany have trouble getting to their jobs. Many companies in Germany must wait days longer for deliveries of food, machine parts and other goods. Shoppers who made quick weekend jaunts to Freilassing’s stores now mostly stay away.

Japan, the world’s most heavily indebted nation, is now getting paid to borrow. The Japanese government for the first time Tuesday issued benchmark 10-year bonds with negative yields, meaning it is effectively charging investors for the privilege of lending it money, The Wall Street Journal reported. That is the result of the topsy-turvy world of negative interest rates, which Japan entered earlier this year, when the country’s central bank began to charge lenders for holding some of their deposits, instead of paying them interest.