Debt

Credit markets will withstand Evergrande shocks

23 Sep 2021

The global corporate bond market has barely flinched at the crisis at the Chinese property developer, which is a big issuer of junk debt. Loose monetary policy, healthy company balance sheets, and a hunt for yield explain the nonchalance. This will encourage more risk taking.

Beijing sets planned fires to save property forest

20 Sep 2021

Officials are allowing developer Evergrande teeter on the edge of default as the real estate sector skids. It’s a risky attempt to scorch speculators in an industry used to bailouts, but without incinerating the wider economy. The heat will test the government’s pain tolerance.

Evergrande’s restructuring clock starts now

20 Aug 2021

The central bank has issued a rare warning to the troubled developer to reduce debt risks, a hint to speed up non-core asset sales. That should calm investors as founder Hui Ka Yan sheds stakes in electric cars, a bank, and more. What will be left, though, looks disappointing.

Zambian sunlight could disperse Chinese debt fog

18 Aug 2021

The African state’s new leader, Hakainde Hichilema, has to forge a deal with creditors after last year’s default. Getting China to the table won’t be easy. Lifting Beijing’s veil of secrecy by revealing Lusaka’s loans would remove the biggest barrier, and set a good precedent.

Chancellor: U.S. credit cycle close to overheating

30 Jul 2021

Home prices and private-sector borrowing have taken off and credit standards continue to deteriorate. The end may not be nigh, but overvalued stocks and a massive lending boom, especially to corporations, make U.S. financial markets a particularly dangerous place for investors.

Evergrande’s downward spiral runs off the page

30 Jul 2021

Beijing managed the market impact when it allowed quasi-state entity HNA to slide into bankruptcy. It will face more complex problems if privately-run Evergrande folds. The longer authorities wait to signal support, the more pages it will need to add to its corporate disaster playbook.

Billion-dollar whales fill 1MDB’s wide net

28 Jul 2021

Malaysia has clawed back funds almost equal to the amount the U.S. says was misappropriated from the sovereign fund. After chasing down Goldman Sachs, it has plenty of targets left to cover $5 bln of unfunded dues. Infamous 1MDB’s shortfall could soon become a surplus.

Capital Calls: Bank mergers, GlaxoSmithKline

28 Jul 2021

Concise views on global finance: U.S. lender Citizens helps make the case for consolidation with its $3.5 billion acquisition of New Jersey-based Investors Bancorp. A pandemic drug bounty may help the UK pharma group’s CEO Emma Walmsley see off activist Elliott.

Capital Calls: U.S. jobs, Didi probe, Pharma LBO

2 Jul 2021

Concise views on global finance: The U.S. added 850,000 jobs in June but the recovery isn't happening everywhere. Meanwhile, Didi is hit with an investigation by a Chinese regulator days after its U.S. listing, and a pharma buyout by EQT and Goldman is a game of hot potato.

Why 2021 is a sweet spot for economic policymakers

29 Jun 2021

Economies are rebounding, low interest rates mean debt service costs are at historical troughs, and finance ministers and central bankers are pulling in the same direction. But “Pandexit”, as a new BIS report calls it, will make officials’ jobs harder again after this year.

Guest view: A debt relief plan for green recovery

28 Jun 2021

Bond markets are buoyant but poorer economies’ fiscal problems are unresolved. Economists Shamshad Akhtar and Ulrich Volz suggest a way of offering more comprehensive debt relief while promoting an environmentally-friendly and inclusive rebound in economic activity.

EU bonds will take shine off Germany’s over time

15 Jun 2021

Investors flocked to buy the maiden issue of the bloc’s 800 bln euro joint funding programme. But the yield is higher than Berlin’s, implying it’s not yet Europe’s safest asset. Closing the gap requires more liquidity and a sustained political commitment. Both seem likely.

Piraeus faces Sisyphean task to end Greek tragedy

21 Apr 2021

The Athens-based bank wants to raise 1.4 bln euros to speed up bad debt sales. New shares sold at a steep discount to book value imply juicy upside if CEO Christos Megalou hits near-term profit goals. A history of capital hikes plus rocky GDP growth make it an uphill struggle.

Capital Calls: Goldman Sachs, U.S. currency report

16 Apr 2021

Concise views on global finance: The Wall Street bank’s communications veteran, Jake Siewert, goes back to the future, sort of; Taiwan is dubbed a forex interventionist but avoids manipulator label.

China makes double-digit growth look disappointing

16 Apr 2021

Output rose 18.3% in the first quarter compared to last year, but slowed sharply on a quarterly basis. Industrial growth softened while services shrank. The central bank has few monetary policy options, making signs of decelerating fiscal stimulus particularly alarming.

Beijing fiddles while Huarong burns

16 Apr 2021

A slow implosion of the state-owned bad debt manager is spooking foreign funds holding $21 bln of its dollar bonds, and beyond. There has been no official signal as the market convulses. Bail Huarong out or let it default; China erodes investor trust leaving it dangling this way.

Capital Calls: Cellebrite good times

8 Apr 2021

Concise views on global finance in the Covid-19 era: The Israeli cracker of mobile-phone encryption is going public via a SPAC at a $2.4 billion valuation.

Chancellor: Hwang has company in Keynes and Graham

6 Apr 2021

Long before the failed Archegos manager was even born, Benjamin Graham, tutor to Warren Buffett, and J.M. Keynes were teaching the perils of speculating on stocks with oodles of debt. It’s worth remembering their stories as Credit Suisse, Nomura and others count their losses.

Corporate debt party will survive rate storm

17 Mar 2021

Rising government bond yields are dragging up companies’ borrowing costs. Yet the premium that investors demand to buy debt issued by firms is still relatively low. Central banks’ asset buying and the prospect of lockdowns lifting mean credit markets will avoid too big a tantrum.

Rare lender deal underscores India’s credit reset

4 Mar 2021

Creditors of real estate lender Altico voted to sell its assets to a unit of New York-listed Ares. The out-of-court resolution is a sign of maturity in a market where the regulator is too often forced to intervene. Foreign distressed debt investors have other things to cheer too.