Headlines

Suntech Power Holdings Co. reached a new forbearance agreement with the majority of holders of the company's 3% convertible notes, giving the solar-panel maker more time to work on its restructuring plans, Dow Jones Newswires reported. A principal payment of $541 million was due on March 15, but the signing bondholders agreed not to exercise their rights under the notes and the related indenture until June 28, subject to certain criteria. "This new forbearance agreement demonstrates bondholders' continued support for Suntech.

The International Monetary Fund's executive board approved a $1.3 billion (853.7 million pounds), three-year loan to Cyprus on Wednesday, part of a larger international bailout to help the Mediterranean country avoid defaulting on its debt, Reuters reported. But IMF Managing Director Christine Lagarde said Cyprus's bailout was subject to "substantial risks," as the economy is likely to contract for the next two years. "The macroeconomic outlook is subject to high uncertainty and risks to the program are substantial," Lagarde said in a statement. "There is no room for implementation slippages.

Mexican home builders and their creditors have been hiring U.S. bankruptcy lawyers and other advisers, as the companies struggle with mounting debt obligations, The Wall Street Journal reported. Two of the country's leading builders—Urbi Desarrollos Urbanos SAB and Corporación Geo SAB—missed debt payments in April and have reported dismal earnings. Urbi is considering a bankruptcy filing in Mexico as one option, some people familiar with the matter said. The two builders have tapped a combination of U.S. financial advisers and law firms, according to people familiar with the hirings.

Europe moved closer to favouring big uninsured depositors over bondholders when imposing losses on a failing bank’s creditors, despite UK-led warnings that the special treatment would have a “perverse effect” on bank funding, the Financial Times reported. In a pivotal intervention during an EU finance ministers’ meeting, Wolfgang Schäuble, Germany’s finance minister, gave conditional backing for a “depositor preference” compromise, so uninsured deposits are only hit as a last resort.

Austria’s central bank said Hypo Alpe-Adria-Bank International AG will likely avoid a 16 billion-euro ($21 billion) insolvency as policy makers negotiate with the European Commission over the nationalized lender, Bloomberg Businessweek reported. “The government is on a very good path with the Commission, therefore I don’t think that there is an immediate threat,” Andreas Ittner, a director at the nation’s central bank, told journalists in Vienna Tuesday.

The bailouts of the weakest banks in Slovenia should begin next month, the country's finance minister told CNBC on Tuesday, but he insisted that he is not concerned with the time-frame of the process. Uros Cufer said the first assets would be transferred to the nation's so-called bad bank by the end of June, with the exercise due to be completed by the third quarter. Slovenia plans to move 3.3 billion euros of bad loans from its three largest banks, NLB, Nova KBM and Abanka Vipa, to the bad bank in return for state guaranteed bonds worth 1.1 billion euros.

Commerzbank, Germany's second-biggest lender, said it is considering launching a platform to operate ships in a bid to recover higher values from the vessels that it seizes after shipowners fail to service their loans, Reuters reported. The goal of such a project would be to run the ships together with partners for a limited time, Commerzbank said in the prospectus of its capital increase published on Tuesday. The shipping industry is facing difficult times because of the economic downturn and a glut of new ships, which were ordered during the boom years before 2008.

Australian Treasurer Wayne Swan will eschew European-style austerity as a stronger currency slows growth, wagering the government can win a Sept. 14 election fought on jobs and absorb the pain of a broken surplus promise, Bloomberg reported. The underlying cash deficit will be A$18 billion ($17.9 billion) in the 12 months to June 30, 2014, Swan said in Canberra yesterday as he released the federal budget.

A bankruptcy court on Monday approved Central European Distribution Corp's bankruptcy exit plan, putting Russian billionaire Roustam Tariko on the verge of adding one of the world's largest vodka producers to his stable of companies, Thomson Reuters News & Insight reported. Under the plan, green lighted in U.S. Bankruptcy Court in Wilmington, Tariko will receive all of the Polish company's newly issued stock in return for $277 million he is providing for the benefit of its creditors.

Ireland’s new insolvency service will pursue and prosecute borrowers fraudulently seeking debt forgiveness, said Lorcan O’Connor, head of the new agency, Bloomberg reported. Borrowers who lie about their finances face fines of as much as 100,000 euros ($130,000) or as long as five years in prison, according to laws which created the Insolvency Service of Ireland, known as the ISI, last month.