Wednesday, May 18, 2016

Thursday May 19 2016 Housing and Economic stories


China Shipbuilder Evergreen Defaults on Bond Amid Cash Shortage - (www.bloomberg.com) A Chinese shipbuilder defaulted on bonds, becoming at least the 10th company to miss local debt payments in the world’s third-biggest note market this year. Evergreen Holding Group Co. said it can’t make full payment due Monday on a one-year notes because of a cash flow shortage, according to a statement on Shanghai Clearing House’s website. The company, based in the eastern province of Zhejiang, sold the 400 million yuan ($61.3 million) of bonds with a coupon rate of 7.95 percent in May 2015. Credit woes are spreading in China as both privately held and state-owned firms struggle with record debt repayments this year amid the worst economic slowdown in a quarter century. Nanjing Yurun Foods Co., a sausage maker, recently missed a payment for a second time in two months before saying Monday it had later made the payment.

SandRidge Energy files for bankruptcy protection - (www.reuters.com) SandRidge Energy Inc (SDOC.PK) and Breitburn Energy Partners LP (BBEP.O) filed for bankruptcy protection on Monday, the latest in a surge of Chapter 11 filings among U.S. energy producers. The biggest U.S. energy price crash in a generation has now pushed more than 60 North American oil and gas producers to seek protection from creditors since early 2015, regulatory filings show. As of March 31, SandRidge estimated it had total assets of $7.0 billion and total debt of $4.0 billion, and Breitburn listed assets of $4.7 billion and liabilities of $3.4 billion.

"We Should Be Concerned" - Stock Buybacks Plunge Most Since 2009 – (www.zerohedge.com) After snapping up trillions of dollars of their own stock in a five-year shopping binge that dwarfed every other buyer, U.S. companies from Apple Inc. to IBM Corp. just put on the brakes. Announced repurchases dropped 38 percent to $244 billion in the last four months, the biggest decline since 2009, data compiled by Birinyi Associates and Bloomberg show. “If the only meaningful source of demand in the market is companies buying their own shares back, then what happens if that goes away?” asked Brad McMillan, CIO of Commonwealth “We should be concerned.”

China debtor calls on central bank to provide debt guarantee - (www.ft.com) Implicit guarantees are ubiquitous in China, but one company went a step further when it appealed to the central bank to give an explicit reassurance to creditors that the government will not permit any default. China City Construction Holding Group Co saw yields on its Hong Kong-traded “dim sum” bonds spike recently after a surprise privatisation, highlighting the ways moral hazard distorts capital allocation in the world’s largest economy. CCCC was previously owned by a unit of the housing ministry, but a private equity fund took control late last month following a complex asset restructuring. In response to the market jitters, CCCC sent a letter to the People’s Bank of China’s financial stability department titled ‘Urgent request to stabilise the enterprise’s financial situation and avoid creditor turmoil’.

Johnson Invokes Hitler as Brexit Debate Rhetoric Intensifies  - (www.bloomberg.com) Brexit campaigners invoked Adolf Hitler as a parallel with the European Union and criticized the Bank of England governor, evidence of the debate becoming increasingly caustic six weeks before Britain’s referendum. The two-pronged offensive began with former Mayor of London Boris Johnson making the historical analogy in an interview with the Sunday Telegraph, saying attempts to unify the region tend to end “tragically.” Allies backed him in that analysis and also used media appearances to criticize Mark Carney for the BOE’s warning of the economic consequences of a vote to leave, forcing the governor to defend his actions.



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