Headlines

Lebanon’s sovereign debt is probably going to be restructured in a way that hurts neither the economy nor depositors, and foreign holders will be repaid, the banking association head said on Monday, Reuters reported. Salim Sfeir also said he did not foresee problems with a proposal for Lebanese banks to swap their holdings in a maturing March Eurobond of $1.2 billion for longer dated notes, describing such swaps as “common practice”.

Read more

More than 400,000 jobs could be lost in Germany over the next decade as its auto industry shifts towards electric vehicles, according to a government-sanctioned report that underlines the wrenching change facing Europe’s largest economy, the Financial Times reported. In a worst-case scenario, Germany’s workforce could shrink by almost 1 per cent by 2030 if carmakers such as Volkswagen and Daimler are forced to rely on imports to meet targets for electric vehicle sales. The vast majority of vehicle batteries — the most valuable component of electric cars — are manufactured in Asia.

Read more

Bonds issued by the province of Buenos Aires fell sharply on Monday after a minister in the national government said the state would not come to its aid in making a big debt payment due at the end of this month, setting investors on alert for tough negotiations over the country’s sovereign debt, the Financial Times reported. Debt backed by Argentina’s most populous province and set to mature in 2021 fell over 10 per cent to 62 cents on the dollar. Another bond maturing in 2027 saw its price slip about 3 per cent to 44 cents, while government debt prices also wobbled.

Read more

In 2012 eurozone leaders vowed to break the “doom loop” by which national governments and their banking systems could drag each other down in a financial crisis, the Financial Times reported. This began the long journey towards a banking union in which taxpayers would no longer be on the hook for failing banks. Had the leaders fully understood what they were signing up for, they may not even have started.

Read more

Bankruptcy proceedings designed to save struggling companies have resulted in failure in more than half the cases where they have been used, according to research by estate agency Colliers International, the Financial Times reported. Between 2016 and 2019, 13 of 23 company voluntary arrangements, which are used by UK businesses to reduce their debts, saw the group going into administration, while other companies that did not agree a CVA ended up seeking investors to buy the business. Failed CVAs include those agreed by Toys R US and Jamie’s Italian.

Read more

The new governor of the Bank of England and the chancellor need to take early action to ensure the central bank has weapons it can deploy when the next recession hits, warn economists, the Financial Times reported. A survey conducted by the Financial Times last month illustrates economists’ waning faith in the power of monetary policymakers to fight a downturn. A majority of the more than 85 respondents thought the UK economy would fare no better this year than it did in 2019, when growth slowed to its lowest level in a decade.

Read more

Mundipharma International Ltd., a global pharmaceutical company owned by the billionaire Sackler family, is working with Deutsche Bank AG as it weighs a sale of the business amid interest from potential buyers, people familiar with the matter said, Bloomberg News reported. A sale of the Cambridge, U.K.-based business could fetch from $3 billion to $5 billion, the people said, asking not to be identified because the matter is private. The company has attracted initial interest from other pharmaceutical companies as well private equity firms, the people said.

Read more

U.K. regional airline Flybe Group Plc has only days to secure a rescue package that could include help from the government, according to a person with knowledge of the talks, Bloomberg News reported. Flybe owner Connect Airways, comprising Virgin Atlantic Airways Ltd., Stobart Group and Cyrus Capital, is looking for state assistance to avoid putting the airline into liquidation, said the person, who asked not to be identified discussing a private matter. That could involve measures such as suspending U.K. air passenger duty owed by the carrier, the person said. U.K.

Read more

A port operator in northeastern China once at the center of U.N. sanctions on North Korea is finding itself in another storm, Bloomberg News reported. Dandong Port Group Co. has regained attention after a controversial court ruling in favor of a state-led debt overhaul that forces steep losses on creditors and drew shareholders’ complaints about an opaque bankruptcy process. The court verdict also runs counter to an unprecedented roadmap that Beijing has just laid out to restore investor confidence via fair handling of bond defaults.

Read more