Headlines “Markets soar after Greece clinches debt-swap deal” “Toyota recalls 700,000 vehicles in US” “Fender launches $200m IPO” “Interest rates mark 3 years at 0.5%” “FSA bans former FD of Royal Liver Assurance but he escapes £1m fine”
An end to the Greek financial crisis appears to be in sight after Athens this morning announced that 95% of bondholders had offered support for the largest sovereign restructuring yet attempted. The Greek finance ministry announced it would use collective action clauses to force participation, which it had pledged to do if take-up was below 90 per cent. That will now almost certainly trigger payments on credit default swap contracts worth billions of euros. Christine Lagarde, the head of the IMF, said late last night she was optimistic that a crisis would be averted, telling US television: “Spring is in the air.” Ms Lagarde added that the: “real risk of a crisis, of an acute crisis, has been, for the moment, removed,”
The organisation that oversees credit default swaps (insurance against a bond failing) has just announced that it will meet this afternoon to decide whether a credit event has taken place today. ISDA (the International Swaps and Derivatives Association) will hold a press conference at 1pm GMT today to decide if a “Greek sovereign credit event” has occured. The decision of whether Greece has officially defaulted will probably come today. If ISDA votes yes (as several City analysts expect), then CDSs will be triggered.
Headlines “China drives BMW sales” “Ofcom steps up pressure on Murdochs over BSkyB” “RBS returns Dutch arm to ABN Amro” “Ryanair threatens to sue over EC ‘bias'” “Greece in last ditch scramble to avoid catastrophic default”
“Stark slams ECB’s ‘shocking’ balance sheet”
Gas prices could soar next winter as Britain risks being cut off from liquefied natural gas supplies, as cargoes are diverted to Asia, leading analysts have warned. Britain has become increasingly dependent on shipments of LNG as domestic production of gas falls “precipitously”, analysts at Merrill Lynch Bank of America said. LNG imports accounted for about 25% of UK supplies last year. But it could face shortages as rising demand for LNG in Asia, exacerbated by the shutdown of nuclear plants after the Fukushima disaster in Japan, sees cargos diverted east. Asian LNG prices could be double those in Europe this year, the analysts said in a research note. “Qatar has consciously sent tankers to Asia which provides better netbacks/prices, thus increasing the risk of gas shortages in Europe,”
The British engineer held hostage in Nigeria by Islamist terrorists for almost a year was killed on Thursday during a failed rescue mission by special forces. Chris McManus, a 28 year-old from Oldham, Greater Manchester, was murdered by his captors as commandos from the Special Boat Service (SBS) and the Nigerian army attempted the rescue. Franco Lamolinara, an Italian colleague of Mr McManus, was also killed.
Europe has ring-fenced Greece’s debt crisis for now but its escalating recourse to legal legerdemain has shattered the trust of global bond markets and may ultimately expose Portugal, Spain, and Italy to greater danger
Ofcom has stepped up its review of whether James Murdoch and News Corporation are “fit and proper” holders of BSkyB’s broadcasting licence. The regulator has appointed a special team, working under the name Project Apple, to consider evidence emerging from various inquiries, including police investigations into phone hacking, alleged corruption of public officials and the Leveson Inquiry into press standards. Ofcom is unlikely to make a decision for several months but a source said that it would not necessarily wait for the outcome of the criminal investigation or Lord Justice Leveson’s report, which is due in October. The source said that the standard of proof in a fit and proper review was lower than for a criminal prosecution.
Reports that the decision to make Edinburgh the headquarters of the £3 billion UK Green Investment Bank was made in part to strengthen the case against Scotland breaking away from the UK. Whitehall sources say concerns over the independence referendum played a major part in the announcement by Business Secretary Vince Cable and led to a name change – adding the letters UK to emphasise Scotland’s place in the Union.