Corporate Debt

China’s growth is buried under great wall of debt

13 Sep 2023

Local government investment arms owe $11 trln to creditors including state banks. That’s hobbling the world’s second-largest economy. Beijing needs to force asset sales and let some fail. It will be painful but relying on consumers who are unwilling to spend is a dead end.

China’s cautious property giants may be rewarded

8 Sep 2023

Vanke Chair Yu Liang presciently called the top of the market. Now he says it has oversold and will return to a healthier level. Some optimism is warranted. Policies aimed at shoring up home sales are stirring a rebound in stocks. Yu can afford to be more positive than most, too.

Tupperware preserves lessons for Mark Zuckerberg

25 Aug 2023

The iconic food-storage company narrowly avoided collapse after becoming a meme stock. Ironically, viral buzz, often from stay-at-home moms, has been its secret sauce, just as it is for the Facebook founder’s $780 bln empire. Fickle influencers also can spoil the party.

Bond rout will amplify Powell’s Jackson Hole words

23 Aug 2023

Yields on 10-year US debt are near a 16-year-high. That’s lifting borrowing costs even though the Federal Reserve is likely done with raising rates. More expensive loans may cause a recession. When he speaks on Friday, the Fed chair needs to calm markets without caving into them.

Evergrande’s EV deal drives wishful thinking

16 Aug 2023

The embattled property group is giving up control of its stalled electric-car unit to help pay down debt. Its new partner, Dubai-based NWTN, hopes the purchase will charge up its own China strategy. But that seems overly optimistic in an increasingly cutthroat market.

Chinese homebuilders see no light at end of tunnel

9 Aug 2023

The property crisis is claiming one of the few big developers left standing. Country Garden might dodge a default but slowing sales make honouring $200 bln of liabilities and building 1 mln apartments hard. Beijing is pushing firms to the brink, and they have reason to push back.

US soft landing means bumpy ride for bonds

8 Aug 2023

Yields on 10-year government debt are near a 5-year high even though inflation is falling without a recession or huge job losses. Fixed-income traders are right to worry. Better growth may fuel more price rises, keeping rates elevated and deepening Washington’s fiscal problems.

Altice’s beaten-up debt is only a bet for the bold

8 Aug 2023

Patrick Drahi’s telco empire faces a funding crunch, with $60 bln of debt coming due by 2030. He must pull off a tough turnaround in France and sell assets, a tricky task made even harder by a corruption probe. Even with current high yields, Altice debt is a risky punt on Drahi.

China’s property market is finding a new normal

25 Jul 2023

Slower growth is not necessarily bad. In this Exchange podcast, Cara Li, Head of Asia Pacific Real Estate Investment Banking at Morgan Stanley, says the debt-fuelled engine of the world’s second largest economy is maturing and outlines the benefits of a period of consolidation.

China Evergrande throws its creditors a brick

18 Jul 2023

The world’s most indebted property developer released results for 2021 and for 2022, a last-ditch move to keep its stock listing. Any resumption in the trading of its shares will also provide a clue on the value of its restructuring plan for some $20 bln of offshore debt.

Thames Water’s leaky financials are far from fixed

13 Jul 2023

The privately owned UK water company managed to cobble together a rescue from existing shareholders. But in this Viewsroom podcast, Breakingviews columnists discuss why the fresh funds may not be enough, and the threat of nationalisation hangs over the sector as a whole.

Czech sphinx’s Casino bet trumps French insiders

5 Jul 2023

The retailer must choose between two offers to cut its 6.4 bln euro debt load. Daniel Kretinsky’s deal brings more equity, helping the grocer spruce up stores and compete. But he will need France to ditch its preference for domestic owners like rival tycoon Xavier Niel.

UK water meltdown resurrects bank crisis dilemmas

29 Jun 2023

The government may take over indebted 18 bln pound utility Thames Water. Funding a big potential capital hole via bills and taxpayer cash injections could be as politically toxic as 2008-era bailouts of RBS and peers. But imposing losses on creditors may spark even more turmoil.

Capital Calls: US IPOs

29 Jun 2023

Concise views on global finance: Thrift store chain Savers Value Village is the latest consumer goods company to enjoy a successful stock market debut in New York.

Swiss $17 bln CoCo case could bite UBS on the tail

21 Jun 2023

Bondholders are suing regulator FINMA for ordering the writedown of funky hybrid bonds to smooth a Credit Suisse deal. If they win, the debt may come back to life, giving UBS a capital hole. Or the government may pick up the tab, creating new political headaches.

KKR takes private markets right up to the checkout

20 Jun 2023

The buyout shop will acquire up to 40 bln euros of buy-now-pay-later loans from PayPal. That will feed a business growing 70% a year, and satisfy asset managers’ hunt for new big markets to pour dollars into. They may encroach on another domain once the preserve of banks.

Capital Calls: Funky bank debt

14 Jun 2023

Concise views on global finance: Credit investors are increasingly willing to buy quasi-equity instruments known as AT1s, despite a near-death experience for the asset class amid the Credit Suisse crisis in March.

Flailing property firms make for risky buyout prey

13 Jun 2023

Shares in Swedish landlord SBB crashed, while listed European peers also trade at heavily discounted valuations. It looks like a golden opportunity for private funds, with $700 bln of cash. The tough part will be securing debt financing and avoiding catching a falling knife.

Casino’s fate rests on billionaires whack-a-mole

9 Jun 2023

Tycoon Xavier Niel and Czech investor Daniel Kretinsky are vying for control of the hard-pressed French retailer, which needs to restructure some 3 bln euros of debt. Founder Jean-Charles Naouri may be pushed out. Creditors’ backing will determine who will come out on top.

Dicey Asian borrowers offer an unusual shelter

6 Jun 2023

Oaktree’s $500 mln loan to Anil Agarwal’s Vedanta is sizeable in the region’s private debt market. The Indian mining group's bonds yield 28% yet  Howard Marks' fund deftly handled problems in China and leads a growing band of lenders eyeing high returns as rates bite in the US.