Headlines

Bondholders are demanding higher yield premiums from OAO Mechel relative to other Russian metals and mining companies on concern its debt load will soar with the takeover of a smaller steel producer, Bloomberg Businessweek reported. Billionaire Igor Zyuzin’s coal company, which agreed on new covenants under its international debt less than four months ago, will seize control of the indebted Estar Group if the Moscow-based company can’t repay a $945 million bank loan guaranteed by Mechel’s units by the end of September, according to the debt agreement.

Germany's Bundesbank today stepped up its resistance to a European Central Bank plan to buy billions of euros worth of Spanish and Italian government bonds to reduce those countries' crippling borrowing costs, the Irish Times reported. The ECB is being forced to take a greater role in fighting the euro zone crisis while the bloc's governments negotiate legal and political hurdles to coordinating a longer-term response, but the Bundesbank wants to limit central bank action.

Details of Greece's €11.5 billion ($14.2 billion) austerity plan are emerging as Prime Minister Antonis Samaras moves to demonstrate his government is serious about cost-cutting efforts ahead of meetings with European leaders later this week, The Wall Street Journal reported. Although the specifics of the cutbacks still remain a work-in-progress, senior government officials have made clear that the new measures will include across-the-board cuts in pension benefits—a politically sensitive issue—as well as wage reductions and layoffs in the broader public sector.

As post-election euphoria wanes, French President Francois Hollande returns from vacation under pressure to show that beyond dismantling the legacy of his predecessor he can act decisively at home while grappling with recession in Europe, Reuters reported. Awaiting him are the crisis that still haunts the euro zone, fragile relations with German Chancellor Angela Merkel, and French political opponents who accuse him of sunning himself on the beach while Syria slides into chaos.

Bondholders of Brazilian lender Banco Cruzeiro do Sul who stand to receive about half of their investment in a bond repurchase program are being treated in an unfair way, investors told Valor Economico newspaper on Monday. Cruzeiro do Sul was seized by Brazil's central bank on June 4 and put under the administration of privately held deposit guarantee fund FGC the same day. Under the global bond buyback plan, FGC will receive tenders until Sept. 12.

When Wen Jiabao, the Chinese premier, announced this year’s annual growth target of 7.5 per cent in March, most analysts assumed he was being unduly modest and that the world’s second-largest economy would actually expand much faster, the Financial Times reported. The Chinese economy has consistently outperformed annual targets over the past decade, averaging close to 11 per cent growth over that time, despite the 2008-09 global financial crisis. But with activity cooling much more than expected in recent months the 7.5 per cent target is starting to look ambitious.

Indian drugmaker Wockhardt is proving there is life after debt restructuring. After defaulting on $110 million in overseas bonds in 2009 and renegotiating payment on 13 billion rupees in loans, the generics maker is nearly free from a sometimes bitter process of debt recast and is enjoying a furious stock rally, Reuters reported. While Wockhardt's imminent emergence from India's corporate debt restructuring (CDR) system is widely seen as a turnaround success, it comes as the central bank pushes for tighter rules around the process as more companies take advantage of it.

Prime Minister Antonis Samaras of Greece will be greeted with military honors when he arrives in Berlin on Friday, but his pleas for easier bailout terms are likely to meet a cool reception, a top German official signaled Sunday — setting up a standoff that could unsettle financial markets next week, the International Herald Tribune reported. Volker Kauder, a top official of Chancellor Angela Merkel’s Christian Democrat party in Germany, told the magazine Der Spiegel that Parliament was in no mood to grant Greece further concessions. “Sooner or later,” said Mr.

A liquidator has been appointed to the former holding company behind the Quinn group of businesses previously owned by the five adult children of businessman Seán Quinn, the Irish Times reported. Quinn Group (ROI) Ltd was wound up last month by the share receiver, Kieran Wallace of KPMG, appointed to the company by the former Anglo Irish Bank, which is owed €2.88 billion by Mr Quinn and his family. A spokesman for Quinn Group described the liquidation as a move to “tidy things up”.

The European Parliament is attempting to link legislation on bank capital requirements that’s in the final stages of negotiations with a contentious proposal to create a way to wind down failing banks — and the move looks likely to be approved, The Wall Street Journal Real Time Brussels blog reported. When lawmakers return from their August break, they will begin the final stage of talks on a new set of rules, called CRD IV, that will require banks to hold more capital, more liquid assets and improve their corporate governance. But that’s not all.