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Private credit funds are starting to confront the downside of the easy-money era of the past decade: They’re increasingly taking control of businesses that fall foul of loan agreements, Bloomberg News reported. Direct lending units at European firms such as Arcmont Asset Management, Ardian SAS and Pemberton Asset Management are set to take the keys of companies they lent money to, as the surge in interest rates and a worsening economic climate pile pressure on businesses in the US and Europe.
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WeWork's warning of a bankruptcy risk would not have an impact on its India unit, regional CEO Karan Virwani said on Wednesday, Reuters reported. New York-based WeWork, which was valued at $47 billion in 2019, on Tuesday raised "substantial" doubt around the continuance of its operations and warned of a possible bankruptcy. WeWork India, which is backed and owned in majority by Indian real estate firm Embassy Group, said it was focused on growth with sustained profitability and the fundamentals of its business remain strong.
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UK homeware discount retailer Wilko has collapsed into administration, a form of creditor protection that could mean a loss of 12,000 jobs, it said Thursday, as the company could not find any saviour to avert its insolvency crisis to keep its 400 stores operational, The News (U.K.) reported. Mark Jackson, said management had "left no stone unturned" in its attempts to save the business. "But must concede that with regret, we've no choice but to take the difficult decision to enter into administration," he said.
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Ratings agency Moody's on Thursday downgraded Chinese developer Country Garden's corporate family rating (CFR) to Caa1 from B1, citing heightened liquidity and refinancing risk after the company missed bond payments, Reuters reported. Caa1 rating is a level that signals a very high credit risk, according to the ratings agency's website. Country Garden expects to record a half-year loss owing to higher impairment provisions on projects, it said on Thursday.
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Foreign investors funneled over $3 billion into Chinese debt in July in the first net monthly inflows this year for the world's second-largest economy, data from the Institute of International Finance (IIF) showed on Thursday, Reuters reported. Inflows were less than a third of the $10.6 billion poured into Chinese bonds in December as China geared up to lift nearly two years of strict COVID-19 curbs. July also saw a $7.7 billion inflow from non-locals to Chinese stocks, a big jump from the $1.9 billion in June and the second-largest monthly inflows in 2023.
Egypt’s inflation accelerated to another record high, with a new surge in food costs heaping more pressure on a country struggling with a debilitating foreign-currency crunch, Bloomberg News reported. Consumer prices in urban parts of the country rose an annual 36.5% in July, up from 35.7% the previous month, according to figures released Thursday by the state-run CAPMAS statistics agency. On a monthly basis, inflation was 1.9%, compared with 2.1% in June. The headline inflation rate’s now further beyond the level reached in the aftermath of Egypt’s 2016 currency crisis.
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The Reserve Bank of India asked lenders to set aside more cash, stepping up measures to drain liquidity in the financial system, Bloomberg News reported. Bank stocks fell. The central bank ordered lenders to set aside 10% of their incremental deposits garnered between May 19 and July 28, Governor Shaktikanta Das said Thursday. The move will remove a little over one trillion rupees ($12 billion) from the banking system, he said after leaving interest rates unchanged.
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Canada Pension Plan Investment Board lost 0.8% in the fiscal quarter ended June 30, as a stronger Canadian dollar and declines in fixed income assets on the heels of higher interest rates weighed on results, Bloomberg News reported. The fund, Canada’s largest, grew to C$575 billion ($429 billion) from C$570 billion at the end of the previous quarter, according to a statement Thursday. Net transfers totaling C$9 billion from the Canada Pension Plan (CPP) helped offset a net loss of C$5 billion, increasing net assets by C$5 billion during the quarter, the fund stated.
The United States, United Kingdom, and Canada slapped sanctions Thursday on Lebanon's embattled former central bank governor and a handful of close relatives and associates over allegations of corruption, the U.S. Treasury Department said, the Associated Press reported. Riad Salameh, 73, ended his 30-year tenure on July 31 under a cloud of investigation and blame for his country's historic economic crisis. France, Germany, and Luxembourg are investigating Salameh and close associates over alleged financial crimes, including illicit enrichment and the laundering of $330 million.
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A Taliban delegation discussed facilitating international financial transactions with private banks on a recent trip to Kazakhstan in a bid to ease the Afghan banking sector's isolation, the acting commerce minister said, Reuters reported. Nooruddin Azizi, acting Minister of Commerce and Industry, led a business delegation to Kazakhstan last week. In addition to banking he discussed the possibility of preferential trade tariffs, telecommunications projects and transit routes, including for possible shipments of Russian oil to South Asia, he told Reuters in an interview on Wednesday.
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