Debt

Bond blues kick the fun out of racy stocks

2 Oct 2023

Yields are rising for the wrong reason – persistent inflation rather than growth. That’s pushing shares down as well. Some companies will suffer more. Those with higher portions of cash flows coming in the future, like technology firms, are most vulnerable.

Capital Calls: US government shutdown

29 Sep 2023

Concise views on global finance: Civil servants, who already earn 24% less than the market rate, lose their pay when Washington closes. Legislators, meanwhile, keep collecting their $174,000 salaries. Having skin in the game would help focus congressional minds.

Toilet maker artfully unclogs bondholder backup

29 Sep 2023

Embattled Ideal Standard has struck a $640 mln deal to be bought by Germany’s Villeroy & Boch. The key was persuading creditors to accept less than par on 2026 debt. Other struggling companies could make use of similar financial plumbing.

Long US shutdown is avoidable but seems inevitable

26 Sep 2023

A group of Republicans are holding up approval of a $1.5 trln budget because they want $60 bln in cuts. Fiscal responsibility is fair enough, but they’re being contradictory and unreasonable. Even if Republicans were to reach an agreement today, other issues will get in the way.

Western rival to Belt and Road has much to prove

25 Sep 2023

The G7’s $600 bln plan to compete with China’s flagging investment push has launched splashy railway and energy schemes in Africa and Asia. But governments and private investors haven’t put up much cash. It’s also unclear how poor countries will avoid debt traps, says Hugo Dixon.

UBS bondholders tee up risky goldfish impression

20 Sep 2023

The $84 bln bank may issue contingent convertible bonds, months after a state-led takeover of Credit Suisse burned the defunct lender’s debt. Market prices suggest it may not pay a big penalty for Switzerland’s sins. That invites bank overseers to burn other CoCos in future.

New economic rules shatter US bonds’ crystal ball

19 Sep 2023

Government debt has been signaling a downturn for 440 days, but there’s been no recession. The famed predictive power of the yield gap between different vintages of Treasuries is waning. As the global economy evolves, warnings from the fixed-income markets can be safely ignored.

Apple’s high valuation exposes it to China’s whims

7 Sep 2023

The $2.8 trln tech giant's shares lost 7% in two days after reports said Beijing will impose a ban on officials using iPhones. Current retaliatory measures shouldn’t matter much to valuation. But more draconian assumptions show a problem, especially at Apple’s elevated multiple.

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.

WeWork multitasked when it had just one job

9 Aug 2023

The office subletter conceded it might collapse, just months after a debt-for-equity recapitalization and four years since a funding round valued it at $47 bln. Mismanagement, hype and debt-fueled growth are to blame. Rival IWG suggests the business model works if kept in check.

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 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.

Capital Calls: AMC’s meme investor backlash

18 Jul 2023

Concise views on global finance: A new lawsuit looking to force a shareholder meeting adds to growing antagonism between $2 bln movie theater chain AMC and the retail investors who buoyed its business during the pandemic. For boss Adam Aron, meme stock stardom comes at a cost.

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.

Resetting student loans brings Econ 101 lessons

30 Jun 2023

Some 43 mln college grads may feel less confident financially with the Supreme Court striking down President Joe Biden’s debt forgiveness plan. Big chunks of income are no longer freed up. Payments also start anew soon after a Covid hiatus, adding another drag for many consumers.

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.