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SummarySummary Companies Spain's new restructuring law faces looming testCelsa caught between creditors and shareholdersSuccessful outcome seen lifting Spain outlookLONDON/MADRID, Feb 15 (Reuters) - Spain's new restructuring law is just over four months old and already being tested as the economy slows, with companies and officials hopeful it will help cut high bankruptcy rates. Now, a restructuring plan for Celsa, Spain's largest private industrial group with debt worth roughly 2.8 billion euros ($3.04 billion), is going through the courts. LITMUS TESTA court-sanctioned restructuring plan in December for Spanish frozen food retailer Xeldist Congelados allowed it to receive fresh capital and save jobs in a first success for the new law. "The Celsa case shows that creditors can push for a restructuring plan and request the appointment of an expert to assist in the negotiations," said Juan Verdugo, partner at law firm Garrigues. Spain is playing catch up after the EU in 2019 told member states to improve restructuring toolkits.

Celsa España, part of the Celsa Group, is an industrial steel group founded in 1967 by the Rubiralta family. In June, Spain's government authorised 550 million euros in state aid to Celsa, approved by the European Commission. Click herefor an ANALYSIS on Spain's new lawDebtors can benefit from a three-month period to negotiate a restructuring plan with creditors that may be extended. Court approval would allow a restructuring plan to be extended within and between different creditor classes. As the creditor classes are approved, the next step will be to present a final restructuring plan showing Celsa's capital structure post restructuring.

They stressed that the reallocation would be gradual and not result in fire sales, with new money going largely into fixed income rather than alternative investments. Goldman Sachs' asset management arm is planning to significantly reduce its $59 billion of alternative investments. Credit rating agencies Moody's and S&P, which both give Allianz high marks, have pointed to the greater risk posed by comparatively illiquid alternative investments in Allianz's portfolio. Alternative investments come at a price, requiring Allianz and other insurers to set aside more capital to own them because they are less liquid than bonds. In its wake, Allianz has had to close down Allianz Global Investors in the United States in a serious blow to the company.

The planned listing will end a prolonged hiatus in initial public offerings (IPO) on Spain's main market since renewables company Opdenergy's (OPDE.MC) lackluster debut in July. EiDF Solar, which installs solar panels, currently trades on the junior market of the BME Exchange and plans to relist its shares on the senior stock market, known as Mercado Continuo. The group must place more shares with investors to meet a 25% minimum free-float requirement for the country's main market. Shares in EiDF, one of the most actively traded stocks on BME Growth, have rocketed since its stock market debut in 2021. It posted third-quarter 2022 revenues of 315.54 million euros, up from 30.55 million euros the previous year, and earnings before interest, tax, depreciation and amortisation (EBITDA) of 46.86 million euros, up from 7.10 million euros.

☆ Analysis: The deep freeze over UK assets is thawing
▼ + stars: | 2023-02-13 | by ( Naomi Rovnick | ) www.reuters.com time to read: +4 min

"This does suggest a possible inflection point in sentiment towards UK assets," said Nick Kissack, a UK portfolio manager at Schroders, which manages roughly $910 billion of client funds. "We saw extreme levels of risk aversion," in September, he added, while "the risk premium for UK assets has come down since." That, in short, is an outlook of higher global interest rates, weak growth and high inflation. Reuters GraphicsHowever, analysts expect the FTSE 100's rise to falter with a stronger global growth outlook combined with waning energy inflation. "The UK is the standout global economy where growth prospects have not improved," said Baylee Wakefield, multi-asset portfolio manager at Aviva Investors, who expects gilts to continue outperforming Treasuries.

☆ Delivery Hero ramps up interest payments to raise 1 bln euro convertible bond
▼ + stars: | 2023-02-13 | by ( Pablo Mayo Cerqueiro | ) www.reuters.com time to read: +2 min

Feb 13 (Reuters) - Germany's Delivery Hero (DHER.DE) is offering investors significantly higher interest payments than it has done historically to raise 1 billion euros ($1.07 billion) through a new seven-year convertible bond announced on Monday. Though Delivery Hero is a recurrent issuer of equity-linked securities, the deal illustrates a trend among listed European firms choosing to refinance debt through convertible bonds as an alternative to straight-up equity or debt. However, despite rising interest rates, the industrials firm was able to secure cheaper terms than Delivery Hero, an international food-delivery service. Rheinmetall's bonds, due in 2028 and 2030, pay interest of 1.88% and 2.25%, respectively. Alongside the convertible bond sale, the banks on the deal are placing up to 300 million euros worth of existing shares on behalf of convertible bond investors as a hedging manoeuvre.

☆ Credit Suisse five-year credit default swaps up sharply
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: 1 min

LONDON, Feb 10 (Reuters) - The cost of insuring exposure to Credit Suisse (CSGN.S) debt rose on Friday by 24 basis points (bps) from Thursday's close to 320 bps, data from S&P Global Market Intelligence showed. The five-year credit default swaps (CDS) had risen early on Thursday after the Swiss lender reported its worst annual loss since the 2008 global financial crisis, before falling back later that day. Reporting by Chiara Elisei; editing by Dhara RanasingheOur Standards: The Thomson Reuters Trust Principles.

☆ Take Five: The truth about inflation
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +5 min

That puts Tuesday's U.S. inflation data on the must-watch list. 1/ INFLATION BETSurprisingly strong January U.S. jobs data forced markets to rethink the view that interest rates will peak soon. Now, Tuesday's latest inflation figure is the next big test for where the Federal Reserve takes rates in coming months. Stock markets are confident that the Fed can bring down inflation without triggering a sharp growth slowdown. January's inflation report on Wednesday could show double-digit price rises, meaning no respite yet on the interest-rate front.

☆ Ackman's Pershing Square reaps $2.7 bln from rate trade but down 9% in 2022 -letter
▼ + stars: | 2023-02-10 | by ( Nell Mackenzie | ) www.reuters.com time to read: +2 min

U.S. stock indexes had a dismal 2022 with the S&P 500 slumping almost 20%, as the Federal Reserve battled soaring inflation with aggressive interest rate hikes that roiled markets. The assets minus the liabilities in Ackman's fund trade at a discount to its share price. "This possibility is also something that we do not feel is currently reflected in PSH's share price," it said. The interest rate hedges were initiated in late 2020 and early 2021. In 2022 the fund entered new positions in long-term interest rates, currencies and energy it said.

☆ Recession alarm bells are ringing, but (much) less loudly than before
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +5 min

Feb 10 (Reuters) - The rapid reopening of China's economy, plunging European gas prices and cooling U.S. inflation suggest a global recession may not be as deep and protracted as feared just weeks ago. The International Monetary Fund raised its 2023 global growth outlook and a painful euro area recession that was once seen as all-but-certain is less of a concern. Citi sees a 30% chance of a global recession this year, down from 50% in the second half of last year. But rallying stocks do not mean the world will escape a recession, rather that China's post-COVID economic reopening should limit the downturn. And economists polled by Reuters forecast global growth would barely clear 2% this year, a level associated with significant downturns historically, and flagged the risk that it could be even slower.

☆ Hedge funds caught in bigger squeeze than 2021 meme stock frenzy - Goldman Sachs note
▼ + stars: | 2023-02-06 | by ( Nell Mackenzie | ) www.reuters.com time to read: +2 min

LONDON, Feb 6 (Reuters) - Hedge funds betting against stocks globally abandoned those trades last week at the fastest pace since 2015, surpassing the speed of their exodus from the meme stock frenzy two years ago, according to a Goldman Sachs research note. The largest short positions held by hedge funds were in industrials and information technology companies, the Goldman note said. It added that hedge funds also exited many long positions in Asian developing markets and Chinese equities. Meanwhile, after stuttering recoveries during a volatile two years, AMC and GME are now trading above their price levels of Jan. 15, 2021 just before the meme stock frenzy began. Resurgent risk appetite among some investors has also fuelled rallies in the shares of so-called meme stocks since the start of this year, though many analysts are sceptical the recent moves will last.

☆ Take Five: The Bottom Line
▼ + stars: | 2023-02-03 | by ( ) www.reuters.com time to read: +5 min

Australia and India's central banks are navigating the shifting sands of data and markets are digesting what the world's top central banks have to offer. The question is what impact this will have on bonds and stocks markets after a stellar January? Reuters Graphics4/ RUN RALLY, RUNIt was a stellar start to 2023 for markets - stocks and government bonds enjoyed one of the best Januaries on record, fuelled by optimism that the worst is over. That's not good for a central bank, nor is the idea that their communication is ineffective. Policy rate hikes and cuts by central banks overseeing the 10 most traded currencies.

☆ Central banks hike rates again, but a pause is coming
▼ + stars: | 2023-02-02 | by ( ) www.reuters.com time to read: +5 min

REUTERS/Joshua RobertsLONDON, Feb 2 (Reuters) - Major central banks are steadily moving closer to a pause in their aggressive interest rate hiking campaigns. The European Central Bank and the Bank of England raised rates on Thursday, but markets suspect a peak is nearing. Overall, 10 big developed economies have raised rates by a combined 2,965 basis points in this cycle to date, with Japan the holdout dove. Canada's central bank has raised its policy rate at a record pace of 425 basis points in 10 months. The central bank raised its forecast for its peak interest rate to 5.5%, up from a previous forecast of 4.1%.

☆ Sterling falls to day's low, gilt yields tumble as BoE signals rates near peak
▼ + stars: | 2023-02-02 | by ( ) www.reuters.com time to read: +1 min

[1/2] The Bank of England in the City of London financial district, in London, Britain, January 26, 2023. Sterling initially strengthened after the announcement, with markets split on whether the central bank would opt for a smaller 25 bps rate rise. It then lost its shine as markets digested the commentary and the central bank signalled rates were near their peak. It was last trading at the same levels where it was before the BoE decision, up 0.55%. Reporting by the London Markets team, writing by Samuel Indyk; editing by Dhara RanasingheOur Standards: The Thomson Reuters Trust Principles.

The central bank lifted its main funds rate by 25 bps to its highest since 2007 as it continued its fight against inflation. Yet the S&P 500 (.SPX) hit a five-month high, as traders focused resolutely on the idea that the world's most influential central bank would change course soon. Government bond markets meanwhile continued to price in rate cuts by year-end as the economic cycle turns. Over in Europe, the European Central Bank delivered a hefty 50 bps hike on Thursday and promised more of the same for March and beyond. "In terms of the impact of (central bank) hawkishness on markets," he added, "this has significantly softened."

☆ End of easy-cash era is going to hurt
▼ + stars: | 2023-02-01 | by ( ) www.reuters.com time to read: +5 min

LONDON, Feb 1 (Reuters) - The end of the easy-cash era is over and its impact yet to be felt on world markets, hopeful that the pain of aggressive rate hikes and high inflation has passed. Reuters Graphics3/ GOING PRIVATEPrivate debt markets have ballooned since the financial crisis to $1.4 trillion from $250 billion in 2010. Reuters Graphics Reuters Graphics4/CRYPTO WINTERRising borrowing costs roiled crypto markets in 2022. Reuters Graphics5/FOR SALEReal estate markets, first responders to rate hikes, started cracking last year and 2023 will be tough with U.S. house prices expected to drop 12%. How the sector services its debt is in focus and officials warn European banks risk significant profit hits from sliding house prices.

A trading book includes loans banks have earmarked for sale and are thus marked-to-market, while a banking book is where a lender holds loans and other assets not intended for disposal. This implies a heavy discount of 15 pence on the pound if banks sell the loans at that level. Banks make money also by charging the borrower a fee to provide loans, then sell the loans to third party investors. Reuters could not ascertain the exact size of the hit on the loans sold. On the flipside, loans sold by banks can generate attractive gains for buyers.

[1/2] Men walk past an electric board displaying Nikkei and other countries' indexes outside a brokerage in Tokyo, Japan January 16, 2023. After $14 trillion was wiped off world shares in 2022, $4 trillion has been added back this month. "Markets are in this Goldilocks-scenario of OK growth, slowing inflation and softer monetary policy," said Richard Dias, founder of London-based investment consultancy Acorn Macro. Major central banks have added almost 3,000 basis points to global borrowing costs in this tightening cycle to date. "We've had a monumental rally in government bonds based on expectations we've reached the peak in interest rates," he said.

ECB President Christine Lagarde, speaking in Davos recently, stressed the need for monetary policy to "stay the course." "There were questions recently about why markets don't understand what the ECB will do next," said ING's Brzeski. With updated ECB projections not out until March, Lagarde is likely to be pressed on how the ECB views core inflation, which strips out volatile food and energy prices. The ECB targets headline inflation at 2%, but officials are focused on a core measure. Reuters Graphics5/ Is the ECB more upbeat on the growth outlook?

☆ India's Adani dollar bonds hit lowest since November
▼ + stars: | 2023-01-27 | by ( ) www.reuters.com time to read: 1 min

LONDON, Jan 27 (Reuters) - Dollar bonds issued by entities of India's Adani Group tumbled on Friday as a scathing report by a U.S. short seller triggered a rout in the conglomerate's listed firms. The short seller report has cast doubts on how investors will respond to the company's record $2.45 billion secondary sale. U.S. dollar-denominated bonds issued by Adani Green Energy (ADNA.NS) extended this week's sharp falls to just under 77 cents in the dollar to their lowest since November, Tradeweb data showed. The price was last down 7.32 cents to 77.007 cents. .International bonds issued by Adani Ports And Special Economic Zone (APSE.NS), Adani Transmission (ADAI.NS) and Adani Electricity Mumbai also fell. Reporting by Amanda Cooper and Dhara RanasingheOur Standards: The Thomson Reuters Trust Principles.

☆ Take Five: Goldilocks and the three bears
▼ + stars: | 2023-01-27 | by ( ) www.reuters.com time to read: +5 min

Will the Federal Reserve tone down its hawkish rhetoric in the face of cooling inflation or stick to its guns? Investors widely expect a 25-basis point rate increase at the Feb. 1 meeting and for rates to stop short of hitting 5%. Fed officials, however, have indicated they expect the key policy rate to top out at 5.00-5.25% this year. Dollar bears, meanwhile, will watch for dovish leanings that could further accelerate a decline in the greenback. Amundi reckons ECB rates could reach 4%.

☆ Europe's stellar stocks and bonds rally has gone too far - Amundi
▼ + stars: | 2023-01-25 | by ( Naomi Rovnick | ) www.reuters.com time to read: +3 min

REUTERS/Benoit Tessier/IllustrationLONDON, Jan 25 (Reuters) - A blazing rally in European stocks and government bonds has gone too far, the chief investment officer of the region's largest asset manager said on Wednesday, warning that markets are ignoring the possibility of euro zone rates going as high as 4%. MSCI's broad index of European shares outside the UK (.dMIEU00000PUS) is up 8.8% so far in January. "We could expect a consolidation of 15% to 20% from current levels," on European equity indices, Mortier said. "These kinds of processes are very powerful and work well until something breaks, and that's why we don't want to participate [in the rally]," Mortier said. Continued ECB rate rises after the U.S. Federal Reserve pauses its hiking cycle could see the dollar weaken further, he said.

[1/3] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 7, 2022. Trade in European stocks was lacklustre, as signs of an improving economic outlook in the euro zone fed worries about further rate hikes. AUSSIE DOLLAR SURGEThe Australian dollar surged to $0.7123 after the latest inflation data. Germany's Ifo institute said its business climate index rose to 90.2, in line with the consensus, according to a Reuters poll of analysts, and up from 88.6 in December. U.S. crude futures recently rose 1.01% to $80.94 per barrel and Brent was at $86.68, up 0.64% on the day.

☆ Morning bid: Who let the hawks out?
▼ + stars: | 2023-01-23 | by ( ) www.reuters.com time to read: +3 min

It's a good opportunity for policy hawks at the European Central Bank to get their message across. The ECB is likely to raise interest rates by 50 basis points in February and March and will continue to increase rates in the months after, ECB governing council member Klaas Knot said at the weekend. ECB chief Christine Lagarde meanwhile has reiterated the central bank will keep raising rates at a brisk pace to bring inflation down to its 2% target. Euro at nine-month highs vs dollarThe Bank of Canada, meanwhile, is expected to hike interest rates by 25 bps on Wednesday. Trade in U.S. stock futures suggested a flat open for Wall Street , , although the signals from other major stock markets boded well for U.S. trading later on.

Jan 19 (Reuters) - Zambia needs "desperate debt relief" and agreements under a Group of 20 restructuring vehicle are proving difficult, the World Bank's managing director of operations said on Thursday. "In the last two years, we have seen the limitations of the common framework," Axel van Trotsenburg told a panel at the World Economic Forum's annual meeting in Davos, moderated by Reuters Editor-in-Chief Alessandra Galloni. Zambia has become a test case for the G20-led "Common Framework" restructuring vehicle launched during COVID-19 to streamline debt restructuring efforts as poorer countries buckle under the fallout from the pandemic hit. "Right now we have negotiations where there is not an established debt sustainability framework. What you see in the discussions is that different creditors are challenging all the underlying assumptions," van Trotsenburg added, without specifying which creditors he was referring to.

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