Coronavirus

European government bond spreads have tightened in response to the European Central Bank's decision on Wednesday to beef up its bond buying. Italy’s spread to Germany contracted by more than 120bp since Wednesday morning's wide but SSA borrowers are not ready to return to the market yet.

Air France-KLM has taken a series of exceptional measures including drawing down on €1.765bn of bank debt and Moody's has cut ratings in the sector as the coronavirus pummels the airline industry.

Bankers trying to arrange finance for companies during the coronavirus crisis are being hindered by competition rules that control when and how they can talk to other banks.

Siberian Coal Energy Co (Suek) is seeking financing from lenders, according to two market sources. The borrower is braving lenders' wariness about coal companies, which last year weighed on demand for a Suek loan, and the global volatility caused by the spread of the Covid-19 virus.

GlobalCapital has compiled a short list of companies known to have drawn their revolvers or arranged new loans since the coronavirus crisis engulfed markets.

Corporate credit spreads bounced back on Thursday after the European Central Bank announced a new €750bn bond buying programme to battle the economic fallout from the coronavirus, but syndicate bankers said that there would likely need to be a longer period of stability before the primary market reopens.

Latin American governments looking to shore up their economies in the fact of the coronavirus pandemic generally have less room for fiscal stimulus than they did before the 2008 financial crisis, warned Fitch Ratings on Wednesday as the region’s bond markets plunged even further.

Prominent short sellers have criticised European financial regulators’ clampdown on short selling as being counterproductive. Meanwhile, US hedge fund Bridgewater Associates has been unwinding its multibillion short positions in European stocks, after price falls across indices on the continent in recent days.

European banking supervisors are looking into ways to help banks offset the impact that rising credit risks will have on their capital levels, with the industry heaping criticism on the IFRS 9 accounting standard for making the coronavirus crisis even worse than it should be.

Germany's Covestro and the UK's 3i have both signed new revolving credit facilities with terms that were agreed before the Covid-19 pandemic sent markets plunging, but lenders said that new deals will have far higher margins.

As volatility batters markets and participants scramble to hold dollars, calls are growing for the US Federal Reserve to extend the swap lines that it used during the 2008 crisis to emerging market central banks.

Governments across Europe are scrambling to support businesses as the rapid spread of the coronavirus batters their economies. In France, the state is in discussion with its advisors about preparing to step in and take equity stakes in companies showing signs of stress, according to sources speaking to GlobalCapital.