Headlines

With Abengoa SA one step closer to becoming Spain’s biggest corporate bankruptcy, creditors are faced with the unpalatable choice of dumping their holdings or taking their chances on an eventual settlement with the renewable energy company, Bloomberg News reported. The predicament is playing out in the markets. Abengoa’s bonds were among the most-traded securities in Europe on Wednesday, with its 8.5 percent notes due in March plunging to as low as 12 cents on the euro from 63 cents, according to data compiled by Bloomberg.

Britain's financial watchdog has fined Barclays 72 million pounds ($109 million) for cutting corners in vetting wealthy customers in order to win a huge transaction described by one senior manager as potentially the "deal of the century," the International New York Times reported. Barclays arranged the 1.9 billion pound transaction in 2011 and 2012 for a number of rich clients deemed by the regulator to be politically exposed persons (PEPs), or people holding prominent positions that could be open to financial abuse.

Brussels on Tuesday defied strong opposition from Germany and unveiled plans for a €45bn eurozone-wide deposit guarantee scheme that would pool money from across the currency union to ensure all bank accounts up to €100,000 within the decade, the Financial Times reported.

Italy’s banks will shoulder most of the burden of rescuing four of the nation’s lenders, incurring €1.8 billion in extra costs for the year under a bailout plan that spares senior bondholders and large depositors, the Irish Times reported. The rescue will add to pressure on an industry hobbled by weak economic growth and narrow lending margins. Profitability remains below the level before the 2008 financial crisis. “Italy’s bank resolution is no free lunch,” Royal Bank of Scotland analyst Alberto Gallo said.

German prosecutors have opened another investigation into Volkswagen, this one focusing on whether the company broke local tax laws by making false claims about its vehicles’ carbon dioxide emissions, the International New York Times reported. In addition, there were signs on Tuesday that allegations of emissions cheating could spread to other carmakers, after an environmental organization in Berlin said tests by a Swiss university showed suspicious pollution readings from a Renault passenger van.

Argentine President-elect Mauricio Macri plans to push through economic reforms that will buy him time for a "tough negotiation" with U.S. hedge funds suing the country over unpaid government debt, Bloomberg News reported. The pro-business Macri, who narrowly won Sunday's presidential election, vows to get the stalled economy moving again but needs to settle a decade-long legal battle with the holdout creditors before he can return to global credit markets.

Automotores Gildemeister SA, a Chilean car dealer, agreed to cede options to buy 40 percent of the company to its bondholders as part of a restructuring of debt. The company failed to pay a coupon on its 2021 bonds that was due Tuesday, Bloomberg News reported. Gildemeister reached a preliminary agreement with holders of about 70 percent of its $700 million in dollar bonds due in 2021 and 2023 to swap the notes for new bonds guaranteed by real estate and other assets, according to an e-mailed statement.

Former Anglo Irish Bank chief executive David Drumm is in a bigger fight to stop his extradition to Ireland to face criminal charges, but he has just lost a smaller one: his bid to walk away from his debts. Eleven months after a US bankruptcy judge denied him a discharge from bankruptcy because he lied and fraudulently and knowingly failed to disclose €680,000 in cash transfers to his wife Lorraine, the 49-year-old Dubliner has lost his appeal against that withering ruling.

Italy has used a controversial state guarantee to rush through the rescue of four banks before EU “bail-in” rules come into force next year in an effort to deal with tens of billions of bad loans hampering the country’s economic recovery, the Financial Times reported. The newly created Italian bank resolution fund will raise €3.6bn to restructure four small lenders — Banca Marche, CariFerrari, CariChieti and Banca Etruria.

A meeting of creditors of Sir Anthony O’Reilly to see if a formal deal can be reached on the sale of his assets and the division of the proceeds is likely to follow Friday’s decision of the court in the Bahamas to declare him bankrupt. The judge in the case specifically mentioned that parties in the case could subsequently apply to the court to ratify such an agreement, the Irish Times reported.