Debt

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

16 April 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 April 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 April 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 April 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 April 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 March 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 March 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.

China property credit crisis drags in Ping An Life

4 February 2021

China Fortune Land Development's $814 mln of overdue loans have local officials warning its collapse could create systemic risk. Over 200 financial institutions are involved. Beijing might let CFLD serve as a warning, unless the life insurance giant steps in to save its stake.

Washington takes low road back to Latin America

1 February 2021

Days before Donald Trump left office, a U.S. development bank agreed to help Ecuador repay some $3.5 bln of debt in exchange for locking China out of its telecom network. Reviving relationships in the region makes economic sense, but it’ll take more than chasing Beijing away.

Federal debt monster lurks for Biden, Yellen & Co

19 January 2021

The U.S. president-elect’s pick to lead the Treasury says going big with coronavirus relief is smart for now. But debt at 100% of GDP and counting will inevitably become a millstone. Big-ticket agenda items, from higher taxes to lower defense spending, can’t be avoided for long.

Buyout captains’ animal spirits will trump reason

13 January 2021

Last year marked a record number of LBOs and $580 billion in total value. Warning shots are ringing: leverage levels are high, bankruptcies are rising and aggressive tactics recently took a hit in U.S. courts. But with coffers filled and low borrowing costs, signs flash go.

Argentina borrows from the Elliott playbook

8 January 2021

The country used an obscure but widespread legal clause to argue for dismissing part of a lawsuit over GDP-linked warrants. Paul Singer’s fund once helped push Argentina to default with such wordplay. If Buenos Aires' tactics pay off, other creditors will have to pay attention.

Cleanup peeks through India’s distressed deal mess

7 January 2021

Competing $5 bln bids from Oaktree and Piramal for collapsed housing lender DHFL look closely matched on a mix of criteria. Missed deadlines and mudslinging have marred the process. And yet better recovery rates and a jailed tycoon are good signs for the young insolvency regime.

Default wave will hit the little guy hardest

28 December 2020

Covid-19 has saddled companies with debts. Big groups with reserves and access to capital now look like they can ride it out. Smaller outfits won't stay afloat so easily: think local coffee shops vs. Starbucks. Governments need to get creative to help the worst-hit businesses.

Guest view: China’s role in emerging economy debt

24 December 2020

Developing nations, struggling to repay loans, are being slowly locked out of credit markets. Their plight is likely to worsen. But when it comes to resolving this looming crisis, China has been largely missing in action. It should be held to a higher standard.

Latin America debt will hit post-crisis sweet spot

22 December 2020

Corporate defaults in the region have jumped during the pandemic and political concerns persist. But ultra-low global interest rates and expectations that richer countries could spend more on infrastructure will be enough to entice yield-hungry investors to these markets.

Corona Capital: New York City, Fed/climate change

15 December 2020

Concise views on the pandemic’s corporate and financial fallout: New York City’s exodus puts local government in a tight spot; the Fed’s belated move shows a change in Washington.

Funky debt bonanza is breeding complacency

8 December 2020

Companies from BP to Gazprom are issuing more bonds that count as equity than ever before. Low rates and investors’ thirst for yield explain why, yet the benefits of such hybrids are modest. To avoid future strife, companies should sell debt that is better at absorbing losses.

Mining deal explores Sino-Australian common ground

8 December 2020

Perth-based IGO is in talks to buy a minority stake in a Tianqi Lithium mine for $1.5 bln. The Chinese company could use the money to cover $1.9 bln of debt from its investment in Chile’s SQM. It also would be welcome cooperation amid heated tensions between the two countries.

Corona Capital: Skis, Italian banks, Dividends

26 November 2020

Concise views on the pandemic’s corporate and financial fallout: Europe’s hopes for a common ski policy hit a mogul; Italian lender Credito Valtellinese faces a lonely bidding war; Aviva’s payout cut is less stingy than it looks.