Headlines

China's yuan shot higher in offshore markets on Thursday on suspected rare intervention by Chinese state banks that was seen as a bold gesture by authorities to shake out speculators betting against the currency. The intervention caught the market wrong-footed and catapulted the yuan more than 1 percent higher, putting the offshore rate on track for its biggest daily gain on record. Investors have been positioning for yuan depreciation since a shock devaluation of the currency in August, which sparked fears the economy was slowing down more than expected.

The United Nations General Assembly on Thursday approved what it described as global "basic principles" for sovereign debt restructuring processes to improve the global financial system, an initiative that was inspired by Argentina's debt crisis, Reuters reported. There were 136 votes in favour, six against and 41 abstentions in the vote on the resolution, which was submitted to the 193-nation General Assembly by South Africa. Unlike the Security Council, which has the power to issue legally binding resolutions, General Assembly resolutions are non-binding. But they carry political weight.

The Ukrainian government has registered a package consisting of three draft laws required for the successful finishing the restructuring of the country' foreign commercial debt to the Ukrainian parliament and a draft resolution on the provision of financial stabilization as a part of the implementation of the Extended Fund Facility program (EFF) of the International Monetary Fund (IMF) for Ukraine, according to a posting on the parliament's website, the Ukraine news agency Interfax reported.

Russian coal and steel producer Mechel has signed a debt restructuring deal with the country's second-largest state bank, VTB, leaving it one step away from reaching an agreement with all three of its main lenders, Reuters reported. The indebted miner has spent a year in talks over a $6.8-billion debt restructuring with its three main lenders: VTB, Gazprombank and Sberbank. VTB has agreed to restructure Mechel debt worth 70 billion roubles ($1 billion), the bank and the miner said on Wednesday.

The wave of defaults and debt restructuring hurting oil bonds around the world looks set to reach China, Bloomberg News reported. Notes of oil services firms are the nation’s worst performers this quarter with a 5.9 percent slide amid record industry debt and slumping crude prices, according to a Bank of America Merrill Lynch index of foreign-currency notes. Explorers have lost 1.4 percent. Some private-sector companies have dropped to distressed levels with the 2019 notes of Honghua Group Ltd. at 38.8 cents on the dollar and Anton Oilfield Services Group’s 2018 paper at 43.8 cents.

ABB is to shake up its structure with the aim of saving $1bn a year after activist investor Cevian Capital built up a stake in the power grids and robotics giant, The Telegraph reported. Ahead of an investor day on Tuesday, the world’s largest manufacturer of power grids said it would streamline its organisation, reducing the number of divisions from five to four. The move is expected to produce $1bn of “white collar productivity” savings - job losses among its 100,000 office staff - a year by the end of 2017 and release $2bn in cash from working capital.

The holders of Ukrainian Eurobonds maturing in September and October say they considering the restructuring deal between Ukraine and the group of creditors unfair. They are concerned about the extension of the repayment deadline, RT.com reported. "Our clients consider this approach unfair, because it would defer the average maturity by more than eight years for the existing bonds due 2015 and only half a year for the existing bonds due 2023," Reuters quotes US law firm Shearman & Sterling that represents a group holding bonds issued under UK law.

Standard & Poor’s cut Brazil’s prized investment grade credit rating to junk on Wednesday and warned that it could lower it again in the coming months, in a major blow to President Dilma Rousseff’s government, the Financial Times reported. S&P attributed the move, which surprised analysts who had not expected such a downgrade until at least next year, to government backpedalling on its budget deficit targets as well as what it described as divisions in Ms Rousseff’s cabinet over fiscal policy.

A review of the State’s six pillar banks which found 10 borrowers owed a combined €17.7 billion in September 2008 came as a “very significant” surprise, the Oireachtas banking inquiry has heard, the Irish Times reported. Denis O’Connor, a partner with PricewaterhouseCoopers, told the committee the firm was hired by the financial regulator at that time to examine potential problems and liabilities in the banks. The review found that, in the worst-case scenario, the six institutions could lose €10 billion. The cost subsequently transpired to be €64 billion.

Industrial Bank Co. and Huaxia Bank Co. asked Baoding Tianwei Group Co., a Chinese maker of power transformers, to repay two bonds early after it became the first state-owned enterprise to default on onshore debt in April, Bloomberg News reported. Industrial Bank is seeking 793 million yuan ($125 million) in principal and interest while Huaxia Bank has asked for 248 million yuan, according to Baoding Tianwei’s statement on the Chinamoney website Monday. The lenders sent requests for the notes due in December and March to the China International Economic & Trade Arbitration Commission.