Headlines

China’s leaders spurred speculation they will allow the country’s $21 trillion debt mountain to inflate after refraining from cutting their annual economic-growth target, Bloomberg News reported. Analysts at Australia & New Zealand Banking Group Ltd. and Nomura Holdings Inc. said authorities will need to loosen monetary policy, after Premier Li Keqiang yesterday announced a goal of 7.5 percent growth, the same target as last year. Li said China will seek an “appropriate” increase in credit.

The Cyprus parliament on Tuesday approved a slightly amended privatization bill, meeting a condition set by international creditors for the disbursement of fresh aid to the island, The Wall Street Journal reported. The vote came just days after parliament rejected an earlier version of the bill due to a split in the former governing coalition following the departure of junior partner, the Democratic Party, or Diko, from the government. Half of Diko's deputies abstained from last week's vote, denying the government the majority it needed to pass the bill.

Pescanova SA, the Spanish fishing company whose former board hid more than 2 billion euros ($2.7 billion) of debt, is asking lenders to take nominal losses of as much as 97.5 percent as part of restructuring proposals, Bloomberg News reported. Shareholders will get 4.99 percent of a new company and Damm SA, the Spanish brewer, and Luxempart SA will become Pescanova’s industrial partner, according to a regulatory filing. The company will get as much as 150 million euros in capital and long-term financing under the plans presented to a Spanish court yesterday.

Shareholders in Italy's Seat Pagine Gialle gave the go ahead on Tuesday for a plan aimed at relaunching the heavily indebted Italian yellow pages publisher, allowing creditors to take control of the struggling company, Reuters reported. Measures voted by shareholders include a near 20 million euro cash call reserved for creditors that will see current investors diluted to just 0.25 percent of capital. Royal Bank of Scotland and bondholders will forego debt of around 650 million euros ($893 million) and 837 million euros respectively to become the new owners of the company.

Air France-KLM Group, Europe’s largest airline, is getting a makeover ranging from high-end seats to bigger entertainment screens as Chief Executive Officer Alexandre de Juniac attempts a turnaround from near bankruptcy, Bloomberg News reported. De Juniac, who became CEO in July, is coupling luxury perks such as gourmet meals with a push to trim spending that will erase almost 10,000 jobs from 2011 into 2015. With fliers ready to spend more, investing in the customer experience goes hand in hand with savings, he said.

Some of Britain's banks are still offering their staff pay incentives that could trigger more mis-selling of financial products, the country's markets watchdog said on Tuesday, Reuters reported. The Financial Conduct Authority (FCA) said significant progress had been made in stamping out poor selling practices, but found around one in 10 of the companies it examined still had risky sales practices. The issue of mis-selling remains sensitive in the wake of a series of scandals.

Bank of Ireland made an after- tax loss of €235 million last year on its Irish residential mortgages, according to a filing for the entity that handles this business, the Irish Times reported. Latest accounts for Bank of Ireland Mortgage Bank indicate this was €2.8 million lower than the loss recorded in the previous year. They also show that its impairment provisions rose by 31 per cent to €1.35 billion last year. The accounts state that this hole was plugged by its parent company, the Bank of Ireland group, which bought shares at €8 each in the subsidiary.

Ukraine’s economic and political crisis may be heating up, but Kiev still has enough emergency cash reserves to cover its obligations for the next two months, The Wall Street Journal Real Time Economics blog reported. But what would it take to push the country into default? Tensions escalating over Russia’s Crimea incursion, Moscow increasing natural gas prices and any delay in international bailout talks, say economists. “The military stand-off heightens Ukraine’s risk of default,” says Lilit Gevorgyan, a senior sovereign risk analyst at the IHS consultancy, in a research note.

China’s property trusts, grappling with repayments equivalent to the size of Puerto Rico’s economy, face rising default risks as a former central bank adviser dubs real estate the biggest threat to the economy, Bloomberg News reported. The trust funds must repay 634 billion yuan ($103 billion) of debt this year, up 50 percent from 2013, according to estimates from Haitong Securities Co., the nation’s second-biggest brokerage. The yield on the 2014 notes of Myhome Real Estate Development Group Co., based in the central city of Wuhan, jumped 185 basis points in the past year to 7.78 percent.

As Russia's military secured the Crimean peninsula, its currency hit a record low and its stock market plunged in the face of U.S. and European warnings of sanctions over the incursion into Ukraine, The Wall Street Journal reported. The Obama administration took the first steps late Monday, suspending military cooperation with Russia as well as talks aimed at boosting trade and investment, in a bid to isolate Moscow. President Barack Obama said Russia is "on the wrong side of history" as well as international law.