Germany Sells Notes at Sub-Zero Yields as
Mizuho Eyes ECB Limits - (www.bloomberg.com) Germany
sold five-year government debt with a negative yield for the first time
since April amid speculation that the Bundesbank may reach its limit on some
bond purchases months before the intended completion of the European Central
Bank’s stimulus plan. Benchmark German 10-year bunds advanced along with their
euro-area peers as European stocks fell for a third day, boosting demand
for fixed-interest assets. The ECB tweaked its 1.1 trillion-euro ($1.3
trillion) quantitative-easing program last month by raising its cap on
some of the bonds it can buy to 33 percent per security from 25
percent, President Mario Draghi said on
Sept. 3. The increase was applied to those bonds not bound by collective-action
clauses, or CACs.
Illinois Will Delay Pension Payment Because of
Cash Shortage - (www.bloomberg.com) Illinois
will delay payments to its pension fund as a prolonged budget impasse causes a
cash shortage, Comptroller Leslie Geissler Munger said. The spending standoff
between Republican Governor Bruce Rauner and Democratic legislative leaders has
extended into its fourth month with no signs of ending. Munger said her office
will postpone a $560 million retirement-fund payment next month, and may make
the December contribution late. “This decision is choosing the least of a
number of bad options,” Munger told reporters in Chicago on Wednesday. “For all
intents and purposes, we are out of money now.” Munger said the pension systems
will be paid in full by the end of the fiscal year in June. The state still is
making bond payments, and retirees are receiving checks, she said.
Obama
Administration Hits Back at Student Debtors Seeking Relief - (www.bloomberg.com) On a day when Democratic presidential
candidates sparred in a national debate over who would do more to help indebted
students, the U.S. government launched a new attack on student debtors seeking
loan relief. On Tuesday, the Department of Education intervened in the case of Robert Murphy, an unemployed 65-year-old who has waged a
three-year legal battle to erase his student loans in bankruptcy. Unlike
almost every single form of consumer debt, student loans can be erased only in
very rare circumstances. Murphy’s case, which is currently being heard in a
federal court in Boston, could make things a little easier for certain
borrowers. A win for Murphy would relieve him of $246,500 in debt and could
loosen the standard used to determine how desperate someone needs to be to
qualify for relief. The court asked the Education Department to weigh in on the
matter. In a document submitted to the court on Tuesday, government
lawyers urged the federal judges not to cede any ground to borrowers who
say they are in dire financial straits. Doing so would imperil “the fiscal
stability of the loan program” that has existed for half a century. The
Department of Education did not immediately respond to requests for
comment.
The Next China Default Could Be Days Away as
Steel Firms Suffer - (www.bloomberg.com) Another week, another Chinese debt guessing
game. This time it’s the steel industry’s turn, as investors wonder if a
potential bond default by Sinosteel Co. is an omen of things to come amid
slowing demand for the metal used in everything from cars to construction. The
state-owned steel trader, whose parent warned of financial stress last year,
may have to honor 2 billion yuan ($315 million) of principal next Tuesday
when bondholders can exercise an option forcing the notes’ redemption two years
before they mature. If that should happen, China Merchants Securities Co.
thinks the firm will struggle to repay. A default would be the first by a
Chinese steel company in the local bond market, which has had five missed
payments this year, according to China International Capital
Corp. Premier Li Keqiang is allowing more defaults to weed out the weakest
firms as he seeks to rebalance a slowing economy. Steel issuers’ revenue
fell about 20 percent in the first half from a year earlier and over half of
the firms suffered losses, according to China Investment Securities Co.
Goldman Said Struggling to Sell Concordia Debt
Amid Pharma Rout - (www.bloomberg.com)
Goldman Sachs Group Inc. is facing an uphill battle in selling almost
$2.8 billion of debt for Concordia Healthcare Corp. amid a drug-pricing
controversy in the pharmaceutical industry, according to people with knowledge
of the matter. The Canadian company is trying to finance the purchase of drugmaker Amdipharm
Mercury Ltd. Underwriters led by Goldman Sachs are finding tepid demand for a
$1.1 billion term loan and a 500 million-pound ($762 million) loan
they are marketing to back the takeover, said the people, who asked not to be
identified because the information isn’t public. They also plan to issue as
much as $950 million of bonds. Concordia, whose banks have committed to
the financing, intends to complete the acquisition
next week. Marija Mandic, a Concordia spokeswoman and Michael DuVally, a
spokesman for Goldman Sachs, declined to comment.
Wal-Mart Tumbles Most in 15 Years After Predicting Profit Slump
- (www.bloomberg.com)
U.S. Stocks Slide Amid Wal-Mart Profit Outlook, JPMorgan Results - (www.bloomberg.com)
The Next China Default Could Be Days Away as Steel Firms Suffer - (www.bloomberg.com)
U.S. Stocks Slide Amid Wal-Mart Profit Outlook, JPMorgan Results - (www.bloomberg.com)
The Next China Default Could Be Days Away as Steel Firms Suffer - (www.bloomberg.com)
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