Coronavirus

Bond ETF turmoil exposes credit’s faulty wiring

27 March 2020

The share price of some of these funds plummeted below the value of the less liquid assets underpinning them, upping selloff fears. But ETFs aren’t really to blame; rather it’s the corporate debt market’s opaque pricing. Uncle Sam’s new role as a buyer could spur change.

Ford, GM can ride out lockdown till September

27 March 2020

The two U.S. automakers are bringing in almost no revenue with factories and sales on hiatus. And they have huge fixed costs. But they’re awash with cash and don’t need to buy parts. Throw in some austerity, and each has around six months before no or slow sales threaten a crash.

S&P 500 drop implies nine months of no revenue

27 March 2020

That’s one simplified way to think about the amount of value destroyed by the over 20% plunge in U.S. stocks in 2020. It sounds too pessimistic – but it's less extreme if part of the problem was that shares were overvalued before the Covid-19 pandemic started.

Trump dealmaking powers may grease free markets

27 March 2020

The U.S. president invoked an act that could ramp up production of critical medical supplies and equipment. Given the drastic healthcare needs, mobilizing federal execution makes sense. It would stop state bidding wars but corporate America won’t suffer.

Corona Capital: Cirque du Soleil, Airlines, France

27 March 2020

Concise views on the pandemic’s corporate and financial fallout: Cirque du Soleil may leave TPG sunburnt. Airlines get a sweet bailout. And France joins the campaign against dividends.

Singapore Airlines secures business-class bailout

27 March 2020

State investor Temasek is supporting a whopping $13 bln funding package. Deeply discounted equity and a zero-coupon convertible bond provide other shareholders a chance to bet on a post-crisis recovery. The hard-to-copy playbook could even give the carrier a longer-term edge.

America should bail out airlines the American way

26 March 2020

A $50 billion government lifeline hardly sounds like capitalism. But the U.S. has been an outlier in not propping up its airlines. Bank bailouts already showed the public can emerge better off. The key is to strike a good deal, even if that means taxpayers end up holding equity.

Virus makes water shortages everyone’s problem

26 March 2020

The quest to protect clean water supplies has lacked the snappy targets and big corporate backers of the climate-change movement. A global obsession with handwashing amid the Covid-19 pandemic may change that. When one region can’t take simple steps to sanitize, all are at risk.

Virus leaves all landlords under same leaky roof

26 March 2020

Blackstone, British Land and Intu’s differing financial shapes mean they can cut coronavirus-hit firms varying degrees of slack on their rent. But major tenants like Primark are refusing to pay. If everyone follows suit, landlords won’t have much in the way of comeback.

Cox: Virus-ebbed tide exposes the better leaders

26 March 2020

Politicians, central bankers and CEOs will soon be judged by their handling of the health crisis. Impressive new options who have shown courage, effectiveness and moral purpose have started to emerge. Preconceived choices – like Biden vs. Trump – are rapidly becoming passé.

Xerox-HP deal is dead for now

26 March 2020

The smaller printer maker's hostile $35 bln offer for its rival looks even more like a fool’s errand in today's market. It would pile on debt, and HP’s resistance suggests a friendly deal won't happen. As with other pending mergers, industrial logic will still exist in a year.

Corona Capital: Ackman’s hedge, Oil stockpiles

26 March 2020

Concise views on the pandemic’s corporate and financial fallout, including investor Bill Ackman’s surprise reversal of fortune, and the U.S. shale oil bailout that wasn’t.

Virus audit crunch can be mitigated, not averted

26 March 2020

Covid-19 uncertainties may force accountants to raise red flags on companies’ financial statements. Delaying reports by two months, as in Britain, provides only partial relief. Investors and banks will still have to make calls on solvency, with less help from auditors.

China plays chicken with property market

26 March 2020

Indebted developer Evergrande warned 2019 profit could drop 50%, and is slashing prices as sales tank. Rivals are in trouble, too. A real estate crash poses an unprecedented economic threat, but Beijing is maintaining curbs on speculation. That hard line risks hobbling recovery.

$2 trln U.S. aid offers postcrisis blueprint

25 March 2020

The Senate plan expands jobless support to gig workers while Congress approved sick pay for small businesses. But benefits expire, as do virus-focused policies at firms like Walmart. This is a chance for workers and policymakers to nudge companies to provide long-term help.

Holding: Lawyers proving prepared if not prescient

25 March 2020

Covid-19 has thrown them for a loop like anyone else. Yet recent innovations in corporate law, from M&A to insider trading, have put companies and the public in a better position to face the virus fallout. It’s a change from the lousy advice that helped prompt the 2008 crisis.

Virus clarifies case for universal U.S. healthcare

25 March 2020

The debate in America tends to get bogged down in how to change the system, losing sight of why. Other developed-country governments guarantee basic medical care for everyone. The Covid-19 pandemic shows why the benefits transcend wealth, politics and geography.

Viewsroom: Lives under lockdown

25 March 2020

From Milan to Mumbai to Manhattan, Breakingviews journalists are staying put to help stop the spread of coronavirus. Editor Rob Cox checks in with columnists in India, where 1.3 bln people are housebound; New York City, the epicenter of the U.S. crisis; and hard-hit Italy.

M&A will be lasting casualty of post-viral world

25 March 2020

Notions of national security will broaden as companies are expected to do their bit to keep stricken economies afloat. Buyers will face greater onus to show they won’t strip away assets and jobs. And as countries recover at different speeds, accusations of opportunism will fly.

Margin calls to deliver double body blow in crisis

25 March 2020

Fiscal and monetary bailouts targeted at sustaining ordinary workers may not help entrepreneurs who used their stock to lever up. WWE boss, and Donald Trump chum, Vince McMahon looks like the first casualty. But he’ll have plenty of company in the ring for this finance smackdown.