Debt

Debt ballast slows cruise ships’ return

28 Jun 2023

Royal Caribbean will launch the world’s biggest ship next year, and the firm shouldn’t have trouble finding passengers. Operating profit could surge well beyond pre-pandemic levels too. But debt larded on during lockdowns will continue to weigh down cruise companies.

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.

China’s world banks are geopolitical victims

15 Jun 2023

Canada suspended activity at the AIIB after a senior employee claimed it has become an instrument of the Chinese Communist Party. The Beijing-based infrastructure lender tried to play by global rules, but multilateral funding models are struggling to evade diplomatic tensions.

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.

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.

ECB’s crisis tool works best if it’s never used

30 May 2023

The European Central Bank is touting its powers to buy sovereign bonds if they come under attack from the market. That has kept traders in check, so far. The trick for Frankfurt officials is to convincingly threaten to deploy emergency measures without ever having to.

Capital Calls: US debt deal

30 May 2023

Concise views on global finance: The pending deal for raising the debt ceiling would shift $20 billion out of the government’s tax collector. The move eases some short-term budget pressures, but could surrender a seven-fold payoff down the road.

Capital Calls: Saudi Arabia and the BRICs

29 May 2023

Concise views on global finance: The oil economy is in talks to become the ninth member of the Shanghai-based “BRICS bank”, another sign of Middle East money stepping up to fill gaps in Asia created by Western-led sanctions.

Biden gives little, gets less in debt ceiling deal

28 May 2023

The White House reached an agreement with Republicans to raise the debt limit for two years. The deal will avoid a big knock on Biden’s reelection plans, but the victories end there. Spending caps and social-aid restrictions give Democrats little else to cheer.

Macron’s neglect is France’s main fiscal problem

25 May 2023

National debt is above 110% of GDP and will keep rising if the government’s rosy forecasts don’t pan out. Austerity isn’t the answer now, but the president doesn’t seem interested in crafting a long-term plan to cut indebtedness. That will hit the economy and future generations.

Debt ceiling crash will have few victims

25 May 2023

President Joe Biden is trying to hammer out a deal with Republican lawmakers to ensure the United States can keep its lights on. In this Viewsroom podcast, Breakingviews columnists explain how even if the world’s largest economy defaults on its debts the damage will be limited.

Debt ceiling debacle is ultimate winner’s curse

23 May 2023

The US government is sailing perilously close to a moment when it cannot both service its debts and pay its dues. Political dysfunction could trip into market mayhem. Yet in monetary terms the US remains the only game in town. The debt showdown is the flip side of that privilege.

Mizuho will find M&A history rhymes at Greenhill

22 May 2023

The Japanese giant is expanding rapidly in merger advice by acquiring the boutique for $550 mln. Striking during a dry spell means a lower cost and less chance of bankers leaving. Dealmakers blind to the risks of their own deals, however, has caused decades of disappointment.

Greek vote can bear gifts for debt investors

22 May 2023

A big win by Kyriakos Mitsotakis in Sunday’s polls makes him odds-on to stay as Greece’s premier. That will help the $200 bln economy continue its rebound after crises in the 2010s. Forthcoming investment-grade status is another reason for Greek sovereign debt to keep rallying.

UK race to the bottom spreads to credit safeguards

19 May 2023

German property group Adler has managed to push a restructuring through London courts that violates normal principles of debtholder fairness. That might encourage other companies to follow suit. But as with watering down equity listing standards, it carries a cost.

Debt conundrum gives Italy weak hand in EU talks

18 May 2023

The pandemic and the war have taken the country’s indebtedness off investors’ radar. Yet high interest rates, slower growth and a budget deficit mean Rome will struggle to cut its fiscal burden. That makes it harder for PM Giorgia Meloni to ask for lenient European rules.

Debt-ceiling talks are more theater than substance

16 May 2023

The few areas being discussed on Tuesday – food stamps and drilling permits - are hot political buttons. But they would shrink the deficit by only 2%. Lawmakers either have a long way to go to solve the debt problem, or they are favoring pet projects at the expense of insolvency.

Paying by plastic gets problematically popular

15 May 2023

Credit card debt hit $1 trln among US borrowers and is growing at the fastest rate in two decades. The number of new accounts keeps rising, too, as Chase, Capital One and other fee-hungry banks race to sign up customers. The trend stores up trouble, and not just for cardholders.

EU debt’s credibility problem is worsening

9 May 2023

Borrowing costs of the bloc’s jointly issued bonds have risen above those of similarly rated sovereigns. The EU’s inability to deliver on promised joint revenues is exacerbating the impact of higher rates. That in turn reinforces investor fears that Brussels debt isn’t permanent.