Debt

HNA may have to check out of some big deals

18 Dec 2017

A bond buyback meant to shore up confidence was quickly offset by a bank alleging “temporary liquidity difficulties”. HNA says this is not the case. Even so, rethinking an attachment to trophy assets such as stakes in Hilton and Deutsche Bank could help calm the market’s nerves.

Portugal beats Italy in bond market pecking order

15 Dec 2017

The country that needed a bailout in 2011 can borrow for less than its larger peer. Investors’ preference for Portuguese debt reflects its more vibrant economy, and messy Italian politics. Lisbon can keep outshining Rome, so long as lax bond markets don’t encourage bad habits.

Fed eggheads scramble online-loans takedown

22 Nov 2017

Analysts at the central bank’s Cleveland unit had to pull a study claiming peer-to-peer lending was highly risky after its data was questioned. It’s a tricky sector to define and worsening consumer credit is a concern. But the Fed’s hasty conclusion tarnishes its own reputation.

Italy’s problem banks defer profitability question

20 Nov 2017

Shareholders in Carige have pulled the mid-sized lender back from the brink by backing a 560 mln euro cash call. That’s a relief for taxpayers. But the bank’s high cost base will weigh on its attempts to return to the black. A new owner may be needed to push through deeper cuts.

China shadow banks feel stronger central bank grip

20 Nov 2017

Beijing has put fresh restraints on the $15 trln market for asset management products, a useful but risk-prone part of the financial system. The rules will squeeze profits at those lending to rickety clients. They show the central bank's growing authority over other regulators.

India rating upgrade confirms Modi on right track

17 Nov 2017

Moody's unexpectedly upgraded the country's credit rating for the first time since 2004, in a major boost to Premier Narendra Modi. This recognises that, despite short-term disruption and some negative sentiment, recent reforms will fundamentally improve the economy.

Problem banks return to haunt Italy

16 Nov 2017

Mid-sized Carige has failed to sign up underwriters for its 560 million euro cash call, casting doubt on its future – and on a capital hike by similar-sized peer Creval. Resolution or a takeover are possible next steps. Either way, Italian taxpayers may need to help out.

Online lending defaults could soon go viral

13 Nov 2017

Peer-to-peer loans in the United States are going bad at double-digit rates, eerily like subprime mortgages a decade ago. Although the sector is small, the trend coincides with rising bank credit-card losses. These are classic late-cycle signs of stress among American consumers.

Hadas: Even China will struggle to control finance

8 Nov 2017

With state-dominated banks, capital controls and a trade surplus, along with a strong economy, the People's Republic would seem well-placed to limit the risk of foreign debt. Not so. As a new report illuminates, China, like its global peers, is vulnerable to a liquidity crisis.

Intesa’s bank pruning carries a short-term sting

7 Nov 2017

Rescuing two beaten-down lenders dragged on the Italian bank’s bottom line in the third quarter. However, a 1.3 bln euro tax-free state fund will soak up the cost of branch closures and layoffs, while Intesa will keep the upside. It’s still an attractive trade-off for investors.

Venezuela’s Maduro enters alternate reality

3 Nov 2017

The OPEC member's socialist leader wants to restructure the ailing country's foreign debt, putting an alleged drug trafficker in charge of working out how. U.S. sanctions make any refinancing virtually impossible. But even default might not drive the hapless president from power.

Chinese markets can shake off post-party funk

3 Nov 2017

Following Beijing's twice-a-decade conclave, a so-called "congress put" that had kept trading calm in the run-up is wearing off. Investors are getting anxious again as a shadow-banking crackdown roils bond and money markets. Equities look first in line for policy reassurance.

It’s getting better to be a big Chinese bank

31 Oct 2017

A crackdown on shadow banking helped the country's four state-owned giants in the third quarter. With over half the listed industry's deposits under their control, they can squeeze smaller lenders. That leaves them better-placed to cope with any fallout from China’s debt boom.

For-profit college deal textbook merger of equals

30 Oct 2017

Strayer and Capella are forming a company worth $1.9 bln as regulatory pressures force them to improve the quality of their degrees. Pooling resources, and slicing out $50 mln in costs, gives them a better chance to disrupt America's overpriced higher-education racket.

Hadas: Greed is best indicator of financial crisis

26 Oct 2017

New research casts small-time property investors as the secret villains in the 2007 U.S. house price collapse. As usual, the love of leverage was the root of financial distress. Balance sheets are stronger today, but investors still haven’t learned the virtue of moderation.

Beijing’s dollar bonds seek to reprice China risk

26 Oct 2017

A $2 bln sovereign dollar bond sale is the country’s first since 2004. Despite rating downgrades, the two-part deal is priced aggressively, with slim premiums to U.S. Treasuries. Local banks can guarantee demand, which could artificially cut borrowing costs for Chinese issuers.

China’s leaders make peace with its old economy

19 Oct 2017

Output grew 6.8 pct in the third quarter, helped by higher debt, exports and property prices. For all the talk of innovation and deleveraging, the factors driving growth haven't changed. Nor do a few startups signal transformation. For better or worse, Beijing is okay with that.

Qudian IPO feeds debt-hungry Chinese millennials

18 Oct 2017

The online lender backed by e-commerce giant Alibaba’s financial arm has priced its U.S. listing above expectations, says Reuters. It boasts fast growth, low defaults and - shockingly for tech - profitability. As young Chinese shoppers rack up debt, Qudian will keep earning.

Microfinance goes mainstream in India

16 Oct 2017

IndusInd, a bank, has agreed to buy Bharat Financial Inclusion in an all-share deal valuing the poster child of niche lending at $2.4 bln. The 11 pct premium is small but fair given concerns over the long-term sustainability of independent pure-play lenders to the poor.

CDO cousin thrives a decade after the crisis

11 Oct 2017

The subprime-mortgage fiasco killed the business of pooling debt securities but not its commercial-lending relative, the collateralized loan obligation. CLO issuance has surged on the back of solid credit and investors’ hunger for yield. The bonanza has plenty of life left.