Headlines

Standard & Poor’s said Tuesday that it had cut its sovereign credit ratings for Portugal and Greece, piling further pressure on the two countries with heavy debt loads, weak economies and moribund banks, the International Herald Tribune reported. S.& P. cut Portugal’s rating to BBB– from BBB, with a negative outlook, the agency’s second downgrade of the country since Friday. BBB- is the agency’s lowest investment grade rating and is just one notch above junk.

Sixteen Hong Kong banks have agreed on a deal to enable investors in structured products of the now bankrupt Lehman Brothers recover a majority of their investments, Reuters reported. Investors in Hong Kong lost nearly $2.5 billion on structured products, called 'minibonds' offered by U.S. investment bank Lehman Brothers, which collapsed in 2008. A statement from receivers PricewaterhouseCoopers on Sunday said the agreement was to result in most of Lehman's minibond investors recovering over 80 percent of their original investment from the underlying collateral.

The Central Bank has resolved that Ireland’s banks will not be able to challenge the findings this week of crunch stress tests, an exercise which will clear the way for the fifth bank bailout since the 2008 guarantee, the Irish Times reported. The participating institutions – Bank of Ireland, Allied Irish Banks, Irish Life Permanent and the Educational Building Society – will not be able to seek any lower loan loss estimates in the tests or revised capital requirements. The tests are expected to show a further capital hole at the lenders of between €18 billion and €23 billion.

A damning internal report by Afghanistan’s own Central Bank depicts the Afghan political elite as using Kabul Bank, the country’s biggest financial institution, as its private piggy bank, the International Herald Tribune reported. The report both raises questions about why the authorities did not act sooner and suggests that the answers lay in the political connections of the bank’s officers and shareholders — the recipients of most of the more than $900 million in loans.

A new group of noteholders has signed on to support a prepackaged bankruptcy plan for Mexican satellite company Satelites Mexicanos S.A. de C.V., which emerged from an earlier Chapter 11 restructuring in 2006, Dow Jones Daily Bankruptcy Review reported. The company, known as Satmex, said more than 66% of the holders of its first priority senior secured notes due 2011 executed a restructuring support agreement with the company, under which they agree to back the company's prepackaged Chapter 11 plan.

Irish first time home buyers are set to lose over €30k if they do not purchase a property before June when mortgage interest relief for people buying their first home is to be abolished, Finfacts reported. Currently mortgage interest relief is available to first time buyers (FTB) for up to 7 years after a property is bought. Over a 7 year period a qualifying first time buyer couple availing of the relief could save over €30k. The changes to mortgage interest relief, also known as Tax Relief at Source (TRS) are outlined in the Programme of Government.

Greece's Socialist government is considering creative means to close its budget gap as tax receipts slump—including steps ranging from seizing the unclaimed assets of the dead to slapping new taxes on carbonated drinks, The Wall Street Journal reported. Ahead of a visit by international creditors Monday, the government is scrambling to find €22 billion ($31 billion) in additional spending cuts and tax measures over the next three years, as required under a €110 billion bailout it received from the European Union and the International Monetary Fund in May.

Japan Airlines Corp., once the world’s largest international carrier, is set to emerge from bankruptcy administration this week as a smaller company more reliant on Asian routes and global partners, Bloomberg reported. JAL has scaled back its global network, chopping 49 routes, including Sao Paulo, Amsterdam and Milan, and grounding the last remnants of what was the world’s largest Boeing Co. 747 fleet as it cuts 103 planes. The Tokyo-based airline, which holds its monthly press briefing at 5 p.m.

One of Australia's largest solar panel installers has gone into administration leaving debts understood to be worth millions of dollars and unfulfilled contracts with customers in Canberra, Adelaide, Melbourne, Sydney and Brisbane, The Canberra Times reported. DCM Green went into voluntary administration on March 10. Administrator Alan Hayes said on Friday the company was insolvent, had ceased trading and all staff had been dismissed. He was investigating whether it would be possible to resurrect the company but it was too soon to tell.

Afghanistan’s government has agreed to wind down and sell off the embattled Kabul Bank to meet a condition imposed by the International Monetary Fund for resuming financial support to the country, an Afghan official said, the Financial Times reported. The IMF, backed by western donors, had demanded the government place the country’s biggest lender into receivership as part of a plan to shore up the financial system following the bank’s near-collapse last year.