Headlines

The government’s borrowing costs hit a record high again yesterday after two credit rating agencies warned that Irish State debt faces further downgrades, The Irish Times reported. The cost of State borrowing jumped as the yield or interest rate on 10-year Government bonds jumped by a quarter of a percentage point to 6.72 per cent. The bond yields are now trading at levels similar to Greece at the start of April – only a month before the Athens government sought international support.

Ireland's finance minister has warned the failure of Anglo Irish Bank would "bring down" the country, as regulators prepared to reveal Thursday the cost of bailing out the stricken lender, Agence France-Presse reported. Brian Lenihan also pledged to stand behind the bank which will reportedly cost the state some 30 billion euros (41 billion dollars) to rescue, in comments to the Financial Times newspaper. "Any Anglo failure would bring down the sovereign," the finance minister was quoted as saying in the FT.

Tensions over Europe's austerity drive bubbled to the surface across the Continent as protesters hit the streets from Brussels to Madrid and a visiting U.S. official urged Europeans to tread carefully on fiscal belt-tightening, The Wall Street Journal reported. A general strike left much of Spain paralyzed as unions challenged the government's draconian budget cuts and labor-market overhaul. Demonstrations disrupted other European capitals including Brussels, Lisbon, Athens and Dublin.

Boeing Co. is looking for new customers for the 717 planes previously flown by the low-cost arm of arm of Grupo Mexicana, which have been grounded for a month after the company filed for bankruptcy protection, Dow Jones Daily Bankruptcy Review reported. MexicanaLink operated 20 Boeing 717s leased from Boeing Capital, according to consultancy Ascend Worldwide. Owners and lessors have repossessed a handful of the 109 planes flown by the group and are working to recover and remarket the remainder, despite faint hopes that a slimmed-down Mexicana could restart later this year.

Dutch life insurance and pension giant Aegon said Tuesday it will have restructured its U.K. operations by the end of 2011 by closing two businesses and cutting senior management jobs, as it seeks to sharply cut costs at the struggling business, Dow Jones reported. Aegon reiterated that it intends to cut costs by 25%, detailing that it will do so by closing its third-party pension administration and employee benefits software businesses and scrapping "a number" of senior management position by the end of next year.

Another Marlborough wine company is in receivership and one unsecured creditor has predicted it will be only a month before his company suffers the same fate, The Marlborough Express reported. Otuwhero Estate Wines, based in the Awatere Valley, was put into the management of Deloitte partner Grant Jarrold, of Christchurch, on Monday. Mr Jarrold said he was still assessing options for the company. Otuwhero operations director Michael Davison, of Clifford Bay near Blenheim, would not comment.

UK-based biogas company Renewable Zukunft folded in the summer, administrators Leonard Curtis confirmed on Tuesday, a collapse key investors Climate Change Capital blamed on confusion over green incentives, Reuters reported. Renewable Zukunft was a manufacturer of anaerobic digesters which generate electricity from burning methane, or biogas, trapped in vats of farm waste including manure, grass and maize. The British government says it favours such technology as a way to manage waste and cut carbon emissions compared with coal and gas-fired power.

A credit union has had to be given access to €4.3m from a bailout fund after a spike in bad debt provisions, it has been confirmed, The Irish Independent reported. Charleville Credit Union in Co Cork has been provided with the guarantee, with the money to be given to it if some of its loans are not recovered within two years. A deficit of €5.5m was recorded after the union was forced to put aside extra provisions for bad debts, due to the severe drop in the value of properties which loans were secured against.

Aerospace giant Airbus says it’s confused as to why Mexicana continues to order replacement parts even though the Mexican airline hasn’t operated flights for the past month, The Wall Street Journal Bankruptcy Beat blog reported. Airbus is asking the U.S. Bankruptcy Court in Manhattan for vendor protections, such as assurance that it will be paid within seven days of delivering parts, after it received several unexpected orders from Mexicana in the past two weeks.

Takefuji Corp., a consumer lender that came to symbolize practices that led to a crackdown against the industry, filed for bankruptcy protection with 433.61 billion yen ($5.15 billion) in outstanding debts, the first major failure in an industry suffering under the weight of stricter regulatory control, The Wall Street Journal reported. Takefuji's demise marks the end of an era in an industry that lent millions of yen to lower-income Japanese at sky-high interest rates.