In Lebanon, default is ‘virtually certain’ after stark credit downgrades

The lira, officially pegged to the dollar, has plummeted 40% on the black market as local banks ration dollars necessary for imports of food, medicine and other essential goods. “Right now they’re burning through reserves to pay off debt and that’s a classic sign of imminent default. A capital ‘wipe out’ for local banks? Lebanon’s banks also have a staggering proportion of exposure to the country’s sovereign debt: roughly 70% of Lebanese banks’ assets are sovereign and central bank debt instrume


The lira, officially pegged to the dollar, has plummeted 40% on the black market as local banks ration dollars necessary for imports of food, medicine and other essential goods.
“Right now they’re burning through reserves to pay off debt and that’s a classic sign of imminent default.
A capital ‘wipe out’ for local banks?
Lebanon’s banks also have a staggering proportion of exposure to the country’s sovereign debt: roughly 70% of Lebanese banks’ assets are sovereign and central bank debt instrume
In Lebanon, default is ‘virtually certain’ after stark credit downgrades Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-24  Authors: natasha turak
Keywords: news, cnbc, companies, virtually, local, dollars, certain, pay, stark, downgrades, lebanons, default, zouk, lebanon, credit, banks, debt, crisis


In Lebanon, default is 'virtually certain' after stark credit downgrades

A bank’s windows are smashed by protesters in Beirut, Lebanon, on Jan. 15, 2020. Bilal Jawich | Xinhua News Agency | Getty Images

Investors holding Lebanese bonds are expecting the worst, as years of financial mismanagement may well push the country to default on its debt for the first time in its history. International Monetary Fund officials have been called in to help find a solution to manage Lebanon’s overwhelming debt — some 160% of GDP, the highest ratio in the world — amid the worst financial crisis since the Mediterranean country’s brutal 1975-90 civil war and months of popular protests. Lebanon was hit with a double downgrade over the weekend by two of the world’s largest ratings agencies, dragging its sovereign credit rating further into junk territory. Moody’s and S&P Global Ratings downgraded Lebanon’s long-term foreign currency rating to Ca and CC, respectively — both of which are ten levels below investment grade. The country is now rated lower than Argentina and the Democratic Republic of Congo. “As a consequence of severe fiscal, external, and political pressures, we believe a distressed exchange or unilateral default on Lebanon’s commercial debt is virtually certain at this point,” an analyst report from S&P Global said last week. The report followed Nabih Berri, Lebanon’s speaker of parliament, saying last week that a debt restructuring would be the “best outcome.”

Lebanese demonstrators raise a large clenched fist with “revolution” written on it at the Martyrs’ Square in the centre of the capital Beirut on October 27, 2019, during ongoing anti-government protests. ANWAR AMRO | AFP via Getty Images

As the deadline looms for Lebanon’s $1.2 billion Eurobond, maturing March 9, the bond’s price has whipsawed from 90 cents in the dollar in early February to a record low 53 cents last week, with the yield on those eurobonds surpassing 1,000%. The lira, officially pegged to the dollar, has plummeted 40% on the black market as local banks ration dollars necessary for imports of food, medicine and other essential goods. “They’ll have to restructure; it’s inevitable,” Mohamad Faour, a Lebanese finance research fellow at University College Dublin, told CNBC. “Right now they’re burning through reserves to pay off debt and that’s a classic sign of imminent default. The question is more about the ‘when’ rather than the ‘if’.”

How did Lebanon get here?

“You’re in the middle of a banking crisis, a currency crisis, a debt crisis, and all of that has led to an economic crisis,” Nafez Zouk, a Lebanon expert and emerging markets strategist at Oxford Economics, told CNBC via phone. “It’s not every day that you have a country having to deal with all of those things at once.” Lebanon has suffered for years from low growth, high unemployment and rampant corruption — it’s ranked 137 out of 180 countries on Transparency International’s 2019 Corruption Perception Index. “Financial engineering” by the central bank is also to blame, many economists say, which involved luring dollar deposits from local banks at high interest rates — often upwards of 15% — to finance the government’s spending.

Lebanon “lived beyond its means” for years, Zouk explained, running twin deficits — in both the government’s budget balance and the current account balance — something that required a certain amount of investor confidence to sustain. But in recent years, that confidence has dried up, and so have capital inflows. “So now we’re at the point where we have a dollarized economy, and there are no more dollars left in the system,” Zouk said. “No more dollars in the system to pay back the debt, no more dollars in the system to import, no more dollars to pay people’s deposits back.” Critics of the central bank and its policies call it a Ponzi scheme: taking fresh money from the new depositors to keep paying off the old ones. “It’s like the housing bubble,” Zouk said. “You can keep doing this as long as prices stay up, but as soon as deposits slow down or stop, then you’re screwed. And now we’re screwed.”

A capital ‘wipe out’ for local banks?

Lebanon’s banks also have a staggering proportion of exposure to the country’s sovereign debt: roughly 70% of Lebanese banks’ assets are sovereign and central bank debt instruments. This means that “a default is likely to wipe out the capital of most local banks,” Faour said. Of Lebanon’s $30 billion worth of international bonds, two-thirds are held by local banks and the central bank, while about one-third is held by foreign investors. Moody’s predicted that a debt restructuring plan for Lebanon would likely include bond writedowns to the tune of 35% to 65% of face value. “That $30 billion, you need to pay it back. And we’ve gotten to the point where it’s becoming very clear that we cannot repay that money,” Zouk said. Western and Gulf allies have made clear that any potential aid to the country needs to be contingent on a viable and convincing reform plan, and so far, they aren’t convinced.


Company: cnbc, Activity: cnbc, Date: 2020-02-24  Authors: natasha turak
Keywords: news, cnbc, companies, virtually, local, dollars, certain, pay, stark, downgrades, lebanons, default, zouk, lebanon, credit, banks, debt, crisis


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3 steps to plan your dream vacation without drowning in debt

Any debt you rack up to cover the cost can last for years. Americans spend an average of $1,979 on summer getaways, according to data from personal finance site Bankrate.com. Close to 4 in 10 credit card users have been carrying debt for at least two years, according to CreditCards.com. Just carrying a balance will cost you money, since the average credit card interest rate is 17.3%. “When I’m thinking about booking my dream vacation, I’m thinking about building a budget,” said Winnie Sun, manag


Any debt you rack up to cover the cost can last for years.
Americans spend an average of $1,979 on summer getaways, according to data from personal finance site Bankrate.com.
Close to 4 in 10 credit card users have been carrying debt for at least two years, according to CreditCards.com.
Just carrying a balance will cost you money, since the average credit card interest rate is 17.3%.
“When I’m thinking about booking my dream vacation, I’m thinking about building a budget,” said Winnie Sun, manag
3 steps to plan your dream vacation without drowning in debt Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-24  Authors: darla mercado
Keywords: news, cnbc, companies, cost, drowning, booking, average, plan, according, thinking, steps, vacation, credit, carrying, card, debt, dream


3 steps to plan your dream vacation without drowning in debt

Vacations offer a short-lived thrill. Any debt you rack up to cover the cost can last for years.

Americans spend an average of $1,979 on summer getaways, according to data from personal finance site Bankrate.com.

While using plastic can help simplify the booking process, financing the entirety of your trip could hobble your finances, particularly if it takes you a long time to zero out your balance.

Close to 4 in 10 credit card users have been carrying debt for at least two years, according to CreditCards.com.

Just carrying a balance will cost you money, since the average credit card interest rate is 17.3%.

But you can avoid a sea of red ink if you’re willing to prepare well ahead of your flight.

“When I’m thinking about booking my dream vacation, I’m thinking about building a budget,” said Winnie Sun, managing director of Sun Group Wealth Partners in Irvine, California.

Here are three steps to get started.


Company: cnbc, Activity: cnbc, Date: 2020-02-24  Authors: darla mercado
Keywords: news, cnbc, companies, cost, drowning, booking, average, plan, according, thinking, steps, vacation, credit, carrying, card, debt, dream


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Moody’s downgrades Lebanon’s rating amid financial crisis

Credit rating agency Moody’s downgraded Lebanon’s government issuer ratings Friday to Ca from Caa2 and changed the outlook to stable amid concerns the tiny Arab country might be forced to restructure its massive debt. Lebanon is experiencing its worst economic and financial crisis since the end of the 1975-90 civil war. Moody’s said Lebanon’s long-term foreign currency bond and deposit ceilings have both been lowered to Ca from Caa1 and Caa3, respectively. The long-term local-currency bond and d


Credit rating agency Moody’s downgraded Lebanon’s government issuer ratings Friday to Ca from Caa2 and changed the outlook to stable amid concerns the tiny Arab country might be forced to restructure its massive debt.
Lebanon is experiencing its worst economic and financial crisis since the end of the 1975-90 civil war.
Moody’s said Lebanon’s long-term foreign currency bond and deposit ceilings have both been lowered to Ca from Caa1 and Caa3, respectively.
The long-term local-currency bond and d
Moody’s downgrades Lebanon’s rating amid financial crisis Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-22
Keywords: news, cnbc, companies, debt, deposit, downgrades, currency, bond, countrys, crisis, amid, moodys, rating, ceilings, lebanons, economic, financial


Moody's downgrades Lebanon's rating amid financial crisis

Credit rating agency Moody’s downgraded Lebanon’s government issuer ratings Friday to Ca from Caa2 and changed the outlook to stable amid concerns the tiny Arab country might be forced to restructure its massive debt.

Lebanon is experiencing its worst economic and financial crisis since the end of the 1975-90 civil war. The situation deteriorated after nationwide protests broke out in mid-October against the ruling elite blamed for decades of corruption and mismanagement.

In recent months, the local currency that had been pegged to the dollar since 1997 lost some 60% of its value on the black market.

An International Monetary Fund delegation began meetings Thursday in Lebanon to provide advice on dealing with the crippling economic and financial crisis amid concerns the country might default on its Eurobond debt payment for the first time.

The agency said the Ca rating reflects Moody’s expectation that domestic and external private creditors will likely incur substantial losses in “what seems to be an all but inevitable near-term government debt restructuring in light of rapidly deteriorating economic and financial conditions.”

It added that the situation “increasingly threatens the sustainability of the government’s debt and currency peg.”

Moody’s said Lebanon’s long-term foreign currency bond and deposit ceilings have both been lowered to Ca from Caa1 and Caa3, respectively. The long-term local-currency bond and deposit ceilings have been lowered to Caa1 from B2, while the short-term foreign currency bond and deposit ceilings remain Not Prime.

Lebanon massive debt, standing at $87 billion — 150% more than the country’s GDP. Amid a severe liquidity crunch, banks have imposed informal capital controls, limiting withdrawals to a few hundred dollars a month. The country’s economy has depended heavily on the U.S. dollars since the country’s 15-year civil war ended in 1990.

A new government headed by former American University of Beirut professor Hassan Diab won a vote of confidence earlier this month and has vowed to work on getting Lebanon out of its economic and financial crisis.

Moody’s said that at the end of December, bank deposits had declined by $15.7 billion, or 30% of the GDP from a year before.


Company: cnbc, Activity: cnbc, Date: 2020-02-22
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Bloomberg’s plan to tackle the $1.7 trillion student loan crisis

Democratic presidential candidate former New York City mayor Mike Bloomberg speaks during the Democratic presidential primary debate at Paris Las Vegas on February 19, 2020 in Las Vegas, Nevada. Michael Bloomberg, billionaire and former mayor of New York, is the latest Democratic presidential candidate to turn his attention to the country’s $1.7 trillion outstanding student loan balance. For people already saddled with student debt, Bloomberg says he would slash borrowers payments in half. After


Democratic presidential candidate former New York City mayor Mike Bloomberg speaks during the Democratic presidential primary debate at Paris Las Vegas on February 19, 2020 in Las Vegas, Nevada.
Michael Bloomberg, billionaire and former mayor of New York, is the latest Democratic presidential candidate to turn his attention to the country’s $1.7 trillion outstanding student loan balance.
For people already saddled with student debt, Bloomberg says he would slash borrowers payments in half.
After
Bloomberg’s plan to tackle the $1.7 trillion student loan crisis Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-21  Authors: annie nova
Keywords: news, cnbc, companies, trillion, tackle, loan, crisis, public, students, student, presidential, democratic, borrowers, bloombergs, plan, debt, loans, bloomberg


Bloomberg's plan to tackle the $1.7 trillion student loan crisis

Democratic presidential candidate former New York City mayor Mike Bloomberg speaks during the Democratic presidential primary debate at Paris Las Vegas on February 19, 2020 in Las Vegas, Nevada.

Michael Bloomberg, billionaire and former mayor of New York, is the latest Democratic presidential candidate to turn his attention to the country’s $1.7 trillion outstanding student loan balance.

“At its best, higher education serves as an engine of economic mobility and a pathway to the middle class,” the 78-year-old wrote in his $700 million proposal released this week. “Our system is not fulfilling that promise.”

Bloomberg would make community college free and double Pell Grants. The grants typically go to around 7 million students a year for families with an income below $20,000. Four-year colleges would also be “debt-free” for low-income students. His campaign says it will fund his higher education plan by raising taxes on the wealthy.

For people already saddled with student debt, Bloomberg says he would slash borrowers payments in half. Specifically, borrowers would automatically be enrolled in repayment plans that cap their monthly bills at 5% of their discretionary income. People on those plans now can pay between 10% and 20% of their income.

According to the plan, borrowers would have the option to pay their bills through their employer under the payroll withholding system. Sen. Lamar Alexander, R-Tenn., floated a similar proposal last year. However, it quickly drew criticism from consumer advocates, who called it “mandatory wage garnishment.”

After 20 years on Bloomberg’s repayment plan, undergraduate borrowers can get their remaining debt cancelled tax-free on up to $57,000 of federal student loans. Currently, debt forgiven under these programs is considered taxable income.

Bloomberg would also cancel the debt of students who went to predatory, for-profit colleges and end the government’s collection of defaulted borrowers’ Social Security checks and tax refunds. The candidate would also do away with the collection charges on past-due loans for low- and middle-income borrowers.

Lastly, Bloomberg says he would fix the challenged public service loan forgiveness program by “extending debt relief to all qualifying public servants who’ve applied for forgiveness in good faith.” The Consumer Financial Protection Bureau estimated that one-quarter of American workers could be eligible for that program. Most borrowers in public service jobs believe they’re paying their way to loan forgiveness, only to discover at some point in the process that they don’t qualify for one technical reason or another.

Bloomberg says he will make it easier to discharge student debt in bankruptcy.

At least one Republican, in addition to a host of Democratic lawmakers and presidential candidates, wants to allow student debt to be discharged in normal bankruptcy proceedings. Currently, borrowers can have to exhibit a “certainty of hopelessness” to walk away from their student debt in court.

Federal Reserve Chairman Jerome Powell has said he’s “at a loss to explain” why student loans are treated differently than other types of debt in bankruptcy.

There’s no sound reason struggling borrowers shouldn’t be able to get a fresh start, Kantrowitz said.

“Credit cards can be discharged, but not student loans?” he said.

Student debt has become a central issue in the 2020 presidential campaign.

Americans are now more burdened by loans they took out for their education than credit card or auto debt. The average college graduate leaves school $30,000 in the red today, up from $10,000 in the 1990s, and 28% of student loan borrowers are in delinquency or default.

More from Personal Finance:

The biggest things you don’t know about Roth IRAs

Still working at 65? How to handle Medicare

These high-income taxpayers are getting a visit from the IRS


Company: cnbc, Activity: cnbc, Date: 2020-02-21  Authors: annie nova
Keywords: news, cnbc, companies, trillion, tackle, loan, crisis, public, students, student, presidential, democratic, borrowers, bloombergs, plan, debt, loans, bloomberg


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Where investing pros are turning for yield: ‘Every rock has been turned over at least three times’

That’s why investors are putting record amounts of cash into such investments as corporate bonds and emerging market debt. Every rock has been turned over at least three times,” said Brian Funk head of credit research at MetLife Investment Management. For Funk, emerging market debt, both corporate and sovereign is a “least bad” choice for investors. To play emerging market fixed income, investors can dip into mutual funds or ETFs, like Franklin LibertyQ Emerging Market ETF FLQE, which pays almos


That’s why investors are putting record amounts of cash into such investments as corporate bonds and emerging market debt.
Every rock has been turned over at least three times,” said Brian Funk head of credit research at MetLife Investment Management.
For Funk, emerging market debt, both corporate and sovereign is a “least bad” choice for investors.
To play emerging market fixed income, investors can dip into mutual funds or ETFs, like Franklin LibertyQ Emerging Market ETF FLQE, which pays almos
Where investing pros are turning for yield: ‘Every rock has been turned over at least three times’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-20  Authors: patti domm
Keywords: news, cnbc, companies, investors, investing, turned, debt, markets, etf, bonds, times, yield, rock, yields, market, turning, pros, emerging, preferred


Where investing pros are turning for yield: 'Every rock has been turned over at least three times'

A man (C) wearing a facemask as a preventative measure following a coronavirus outbreak which began in the Chinese city of Wuhan, offers money as he reacts after being refused purchase of a box of face masks, after he claimed to have lost his sales registration ticket while queueing up to buy them, in Hong Kong on February 5, 2020. Anthony Wallace | AFP | Getty Images

Interest rates are so low that the hunt for investments that pay decent yield has gotten even harder. The easy money policies of global central banks, including the Federal Reserve, are pressuring rates lower and keeping the markets awash with cash. At the same time, investors spooked by the coronavirus have been looking for safety, and that has driven Treasury yields and many other rates sharply lower. The benchmark U.S. 10-year note is offering under 1.6%, but the yields on all kinds of debt in Europe and Japan are negative. That’s why investors are putting record amounts of cash into such investments as corporate bonds and emerging market debt. They also are considering preferred stocks, securities that pay a high dividend and are viewed as more steady than common stocks. As the stock market keeps rising to new highs, bonds also represent a way for investors to hedge their equity holdings.

In the week ended Feb. 12, investors put a record $23.6 billion into bond funds, and the flow into bonds is annualizing at nearly $1 trillion in 2020, according to Bank of America. “This is a global reach for yield. Every rock has been turned over at least three times,” said Brian Funk head of credit research at MetLife Investment Management. For Funk, emerging market debt, both corporate and sovereign is a “least bad” choice for investors. “It’s offering value on a risk-adjusted basis at this stage in the cycle,” he said. Strategists warn that it could be late in the game for some investors just jumping in, and from a price perspective, there may not be much appreciation. In the debt world, prices move opposite yields. “We think we’re late in the credit cycle. We think there’s going to be a repricing of credit. Right now, the spread and yield advantage of high grade credit are about as narrow as we’ve ever seen,” said James Camp, managing director of strategic income at Eagle Asset Management.

Emerging markets debt

Spreads between emerging market debt and Treasurys took a hit when markets began to react to news of the spreading coronavirus in late January, but strategists said the spreads between EM debt yields and Treasurys did not widen as much as might have been the case, considering how vulnerable emerging markets could be to the illness. “We think this asset class is an integral part of a globally diversified portfolio,” said Alejo Czerwonko, emerging markets strategist at UBS Global Wealth Management. Bonds like those from Brazil and Mexico, yield about 6.5%. To play emerging market fixed income, investors can dip into mutual funds or ETFs, like Franklin LibertyQ Emerging Market ETF FLQE, which pays almost 6%. It’s heavily exposed to Asia, India and Russia. The Western Asset Emerging Markets Debt Fund, a closed end fund, yields 8%, and among its holdings are Indonesia, Russia, Qatar, Mexico and Indonesian bonds.

EMB, the iShares JPMorgan USD Emerging Market Bond Fund ETF is based on the JP Morgan emerging market bond index and as of Friday was up about 1.6% for the year so far. That represents the dollar-denominated bonds of more than 70 countries. In 2019, the ETF was up 10.3%. EMTL, the SPDR Doubleline Emerging Markets Fixed Income ETF was up 1.8% for the year-to-date. Czerwonko said he dropped his overweight rating on the asset class several weeks ago. In 2019, the total return for EM dollar denominated sovereigns was 14.4% and he expects just mid-single digit returns this year. He also said he prefers high yield sovereigns over investment grade this year, and he would stick to dollar-denominated bonds which typically perform better than local currency. “Taking a longer time frame for instance since the beginning of 2019, in early January country risk or once again the spread of dollar denominated emerging markets bonds was 410 basis points,” he said. “Throughout 2019, it came down all the way to close to 300. We saw a pretty dramatic fall in spreads. Spreads falling means yields falling, which means prices rising so the valuation of the asset class became less attractive.” But still, strategists see value though investors should also beware of risks. S&P Global Ratings said it sees the coronavirus outbreak as a “high” risk in Asia-Pacific and especially China. The ratings firm said, in a report, that there is an “elevated” risk for the rest of the world as of now, due to much lower infection and death rates outside China. Some of the riskier names in the space include Argentina which is hoping to restructure its debt, though some strategists fear the country will look to reduce its debt payments. “Argentina’s government took a harder line with bondholders over the past week, strengthening our view that large haircuts are likely,” according to Capital Economics. Argentina has given itself a deadline of March 31 to work up a restructuring of its debt, which equaled 95% of its GDP last year. Argentine bonds set to mature in 2028 were yielding over 20%.

Preferred Stocks

Preferred stock has been attracting investors in their hunt for yield, because of their typically higher dividends and more bond-like profile. There are ETFs that track preferreds such as PFF, iShares Preferred and Income Securities ETF, which represents the S&P U.S. preferred stock index, and yields about 6%. The ETF was up nearly 10% in 2019, and was up about 2% this year so far. The Invesco Preferred ETF was up more than 11% last year, and is up 1.4% this year so far. The ETF tracks the BofA Merrill Lynch Core Fixed Rate Preferred Securities Index. Preferreds have been a favorite vehicle for Warren Buffett, who bought Occidental Petroleum preferred shares last year and made out well on preferred share deals with Goldman Sachs, Bank of America and GE, after buying them up during the financial crisis. Preferred shareholders do not get to vote like common stock holders do, but they do get more of a claim on dividends than common stockholders, and in the event of default they are in line to get paid before common stockholders. Broadcom common, for instance, has a yield of 4.25%, while its preferred stock has a dividend of 7%. Preferred stocks are viewed as less volatile and better in a down market. High yield corporate debt could have about the same yield but without price swings. “We do buy preferreds. We loved them last year but they’ve had a massive rally,” said Camp. “They’re duration vehicles. Preferreds have rallied to the point where there’s no value left…most of the performance has been wrung out of them.” Relatively speaking, corporate bonds might be more appealing to some investors.

Corporate bonds


Company: cnbc, Activity: cnbc, Date: 2020-02-20  Authors: patti domm
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Pizza Hut’s largest US franchisee is reportedly weighing options, including bankruptcy

Pizza Hut’s largest U.S. franchisee is weighing restructuring options, including bankrutpcy, Bloomberg reported Wednesday. NPC International, which has about $1 billion in debt, operates nearly 400 Wendy’s restaurants and more than 1,200 Pizza Huts. Yum Brands’ Pizza Hut, historically known as a dine-in restaurant, has struggled because more consumers want their food delivered. “There is potential for choppiness in near-term results of Pizza Hut U.S., primarily related to our largest franchisee,


Pizza Hut’s largest U.S. franchisee is weighing restructuring options, including bankrutpcy, Bloomberg reported Wednesday.
NPC International, which has about $1 billion in debt, operates nearly 400 Wendy’s restaurants and more than 1,200 Pizza Huts.
Yum Brands’ Pizza Hut, historically known as a dine-in restaurant, has struggled because more consumers want their food delivered.
“There is potential for choppiness in near-term results of Pizza Hut U.S., primarily related to our largest franchisee,
Pizza Hut’s largest US franchisee is reportedly weighing options, including bankruptcy Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-20  Authors: amelia lucas
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Pizza Hut's largest US franchisee is reportedly weighing options, including bankruptcy

Pizza Hut’s largest U.S. franchisee is weighing restructuring options, including bankrutpcy, Bloomberg reported Wednesday.

NPC International, which has about $1 billion in debt, operates nearly 400 Wendy’s restaurants and more than 1,200 Pizza Huts.

People familiar with the matter told Bloomberg that the franchisee has begun negotiating with its lenders. The company is trying to keep the restructuring out of court but is considering the possibility of filing for bankruptcy with a pre-negotiated plan in place, according to the outlet.

In 2019, the franchisee saw its debt slide further and further into junk territory after credit downgrades from S&P Global Ratings and Moody’s. Both ratings agencies downgraded NPC’s debt this week after it did not make interest payments due to lenders on Jan. 31.

Yum Brands’ Pizza Hut, historically known as a dine-in restaurant, has struggled because more consumers want their food delivered. High food and labor costs have eaten into profits. Same-store sales at U.S. restaurants fell 2% during the pizza chain’s fourth quarter.

“There is potential for choppiness in near-term results of Pizza Hut U.S., primarily related to our largest franchisee,” Yum CFO Chris Turner told analysts earlier in February.

Shares of Yum, which has a market value of $31.3 billion, were trading down 1% on Thursday morning. The stock of rival Domino’s Pizza, which has a market value of $15.1 billion, surged 24% after its fourth-quarter earnings topped estimates.

Read more about NPC International’s options here.


Company: cnbc, Activity: cnbc, Date: 2020-02-20  Authors: amelia lucas
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OECD warns over pileup of low-quality corporate debt

Angel Gurria, secretary-general of the OECD Jose, addresses the media at the organization’s headquarters in Paris, France on Nov. 21, 2018. The volume of corporate debt hit an all-time high of $13.5 trillion at the end of 2019, but the overall quality of bonds fell below levels seen before the global financial crisis, according to a new OECD report. As a result, non-financial companies globally borrowed around $2.1 trillion in the form of corporate bonds in 2019. This may render the non-financia


Angel Gurria, secretary-general of the OECD Jose, addresses the media at the organization’s headquarters in Paris, France on Nov. 21, 2018.
The volume of corporate debt hit an all-time high of $13.5 trillion at the end of 2019, but the overall quality of bonds fell below levels seen before the global financial crisis, according to a new OECD report.
As a result, non-financial companies globally borrowed around $2.1 trillion in the form of corporate bonds in 2019.
This may render the non-financia
OECD warns over pileup of low-quality corporate debt Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-19  Authors: elliot smith
Keywords: news, cnbc, companies, bonds, lowquality, corporate, nonfinancial, trillion, global, trade, pileup, warns, economic, quality, oecd, overall, debt


OECD warns over pileup of low-quality corporate debt

Angel Gurria, secretary-general of the OECD Jose, addresses the media at the organization’s headquarters in Paris, France on Nov. 21, 2018.

The volume of corporate debt hit an all-time high of $13.5 trillion at the end of 2019, but the overall quality of bonds fell below levels seen before the global financial crisis, according to a new OECD report.

Corporate bond issuance has been broadly driven by structural reforms and more expansionary monetary policy worldwide, emerging as a viable source of long-term funding for non-financial companies since the crisis. As a result, non-financial companies globally borrowed around $2.1 trillion in the form of corporate bonds in 2019.

However, the report from the 36-member Organisation for Economic Co-operation and Development (OECD) highlighted that compared to previous credit cycles, today’s trove of outstanding corporate bonds is of lower overall credit quality, with higher payback requirements, longer maturities and weaker investor protection.

This may render the non-financial corporate sector and broader economy more vulnerable to the negative effects of an economic downturn.

The OECD was formed in 1961 as an intergovernmental organization aimed at stimulating global economic progress and trade, mostly consisting of the most advanced countries in the world, which comprise around 80% of global trade and investment.


Company: cnbc, Activity: cnbc, Date: 2020-02-19  Authors: elliot smith
Keywords: news, cnbc, companies, bonds, lowquality, corporate, nonfinancial, trillion, global, trade, pileup, warns, economic, quality, oecd, overall, debt


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As ‘do-or-die’ IMF talks draw to a close, Argentina faces prospect of another default

Argentina is on the cusp of registering another devastating default, analysts have told CNBC, as international investors anxiously await the outcome of “do-or-die” debt restructuring talks. Argentina’s government has said it needs to restructure $100 billion in debt, including $44 billion to the International Monetary Fund (IMF). Last week, the IMF sent a team of economists to Buenos Aires for the fund’s first formal negotiation with Argentina’s newly-elected government. Demonstrators rest durin


Argentina is on the cusp of registering another devastating default, analysts have told CNBC, as international investors anxiously await the outcome of “do-or-die” debt restructuring talks.
Argentina’s government has said it needs to restructure $100 billion in debt, including $44 billion to the International Monetary Fund (IMF).
Last week, the IMF sent a team of economists to Buenos Aires for the fund’s first formal negotiation with Argentina’s newly-elected government.
Demonstrators rest durin
As ‘do-or-die’ IMF talks draw to a close, Argentina faces prospect of another default Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-18  Authors: sam meredith
Keywords: news, cnbc, companies, faces, prospect, buenos, monetary, international, doordie, debt, default, billion, imf, draw, argentina, fund, talks, georgieva, close, aires


As 'do-or-die' IMF talks draw to a close, Argentina faces prospect of another default

Argentina is on the cusp of registering another devastating default, analysts have told CNBC, as international investors anxiously await the outcome of “do-or-die” debt restructuring talks. Argentina’s government has said it needs to restructure $100 billion in debt, including $44 billion to the International Monetary Fund (IMF). Last week, the IMF sent a team of economists to Buenos Aires for the fund’s first formal negotiation with Argentina’s newly-elected government. The talks, which are scheduled to end on Wednesday, are being held in order to avoid the prospect of history repeating itself. In 2001, Argentina defaulted on around $100 billion of debt. It triggered the worst economic crisis in the country’s history and resulted in millions of middle-class citizens falling into poverty — a consequence many in Argentina blame on the fiscal policies enforced by the IMF at the time.

Demonstrators rest during a protest against the International Monetary Fund (IMF) on February 12, 2020 in Buenos Aires, Argentina. Patrick Haar | Getty Images

Speaking from Buenos Aires, Jimena Blanco, head of Latin America at Verisk Maplecroft, told CNBC via telephone that the risk consultancy had assigned a 77% probability that Argentina would default before the end of the year. The risk of the country registering another sovereign debt default — it’s ninth — had increased in recent weeks, Blanco said, citing a growing lack of policy cohesion within the coalition and a shortening timeframe to secure strong political backing. “This is not a coordinated administration by any means,” she added.

The government’s timeline ‘looks optimistic’

At present, the Peronist coalition of President Alberto Fernandez and Vice-President Cristina Fernandez de Kirchner are attempting to orchestrate a delicate balancing act. The administration has vowed to refuse to agree to the kind of budget cuts the IMF usually insists on for crisis-hit countries, but it is also desperate to restructure commitments with its single biggest creditor. Further to this, Argentina’s government is anxious to receive the green light from the fund to pursue a renegotiation with private bondholders. It hopes to agree on all these stipulations by March 31. Meanwhile, the IMF has underscored its reluctance to accept a loss on its biggest-ever bailout package. In an interview with Bloomberg News on Sunday, IMF Managing Director Kristalina Georgieva said that the fund would not be prepared to offer a so-called haircut on its $44 billion loan with Buenos Aires. “Our legal construct is such that we cannot do measures that may be possible for others without this big global responsibility,” Georgieva said.

International Monetary Fund Managing Director Kristalina Georgieva speaks during the Global Women’s Forum in the Gulf emirate of Dubai on February 16, 2020. KARIM SAHIB | AFP via Getty Images


Company: cnbc, Activity: cnbc, Date: 2020-02-18  Authors: sam meredith
Keywords: news, cnbc, companies, faces, prospect, buenos, monetary, international, doordie, debt, default, billion, imf, draw, argentina, fund, talks, georgieva, close, aires


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U.S. credit card debt has soared to $930 billion. Here’s what some presidential candidates would do to help

The latest numbers from the Federal Reserve show that credit card balances climbed to $930 billion in the fourth quarter of 2019 — a $46 billion increase from the previous quarter. Average credit card debt per household is now $8,701, according to the latest estimates from personal finance website WalletHub. “This goes back to his time as a senator from Delaware, because so many credit card companies are based in Delaware.” “He empathizes with the plight of people in their 20s and 30s who have s


The latest numbers from the Federal Reserve show that credit card balances climbed to $930 billion in the fourth quarter of 2019 — a $46 billion increase from the previous quarter.
Average credit card debt per household is now $8,701, according to the latest estimates from personal finance website WalletHub.
“This goes back to his time as a senator from Delaware, because so many credit card companies are based in Delaware.”
“He empathizes with the plight of people in their 20s and 30s who have s
U.S. credit card debt has soared to $930 billion. Here’s what some presidential candidates would do to help Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-18  Authors: lorie konish
Keywords: news, cnbc, companies, rossman, candidate, credit, 930, bill, card, soared, candidates, warren, heres, say, help, biden, debt, billion, presidential


U.S. credit card debt has soared to $930 billion. Here's what some presidential candidates would do to help

skynesher | E+ | Getty Images

If you’re like many Americans, you’re carrying a balance on your credit cards. And the candidate you choose in November for president could have an effect on how well you grapple with those debts. The latest numbers from the Federal Reserve show that credit card balances climbed to $930 billion in the fourth quarter of 2019 — a $46 billion increase from the previous quarter. Average credit card debt per household is now $8,701, according to the latest estimates from personal finance website WalletHub. An analysis by the Urban Institute found that individuals who live in southern states — particularly Mississippi — are more likely to be delinquent on their credit cards. Those who are behind on their balances also tend to be young, between the ages of 18 and 34, low income and lacking in financial knowledge, the Washington, D.C.-based think tank found.

As Sen. Bernie Sanders, I-Vt., has emerged as a Democratic front-runner in the 2020 presidential race, he has also set himself apart as the candidate who has made credit issues the biggest priority, according to Ted Rossman, industry analyst at CreditCards.com. “He seems to have the most to say and the most specific things to say about credit,” Rossman said. That’s after he teamed up with Rep. Alexandria Ocasio-Cortez, D-N.Y., last year to propose a bill that would put a 15% interest rate cap on credit cards, an idea he has also carried over to his presidential campaign platform. “That bill hasn’t gone anywhere in the current climate, but it definitely bears watching,” Rossman said. “If Sanders is president, and if there is a Democratic Congress, then it would have a more realistic chance of passing.” More from Personal Finance:

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Democratic candidates take aim at small-business tax break That would be a big change from today’s rates. Individuals with good credit have an average interest rate of 17%, while those with poor credit face average rates of 25%. Meanwhile, more expensive store credit cards hover around 30% for all borrowers. Sanders’ platform calls for putting a stop to predatory debt collection practices. He also wants to replace existing credit reporting firms with a government public credit registry. That move is aimed at eliminating inherent economic and racial bias, according to Rossman. “The con of this is that a lot of people say, ‘What’s to say the government is going to do it better than the free market?'” Rossman said. Critics also say taking over private credit reporting companies would put about 20,000 people out of work.

Sanders is not the only candidate who has touted policies to try to help borrowers, however. Last year, Sen. Elizabeth Warren, D-Mass., teamed up with other Senate Democrats to propose a bill that would let states cap credit card interest rates for residents. The risk with that proposal is that any time you leave something up to the states, rules will vary from state to state, said Matt Schulz, chief industry analyst at CompareCards.com. “Both of these proposals are dead in the water unless things change significantly after the November election,” Schulz said.

Biden is a wild card

Democratic presidential candidate and former U.S. Vice President Joe Biden in Las Vegas, Nevada, October 2, 2019. Steve Marcus | Reuters

One candidate on the opposite end of the spectrum, according to Rossman, is former vice president Joe Biden. “Biden has really been accused by a lot of Democrats of being in cahoots with the financial industry,” Rossman said. “This goes back to his time as a senator from Delaware, because so many credit card companies are based in Delaware.” A lot of banks are drawn to the state because it has loose usury laws, which dictate the amount of interest that can be charged on loans. Biden and Warren previously clashed over a 2005 bankruptcy bill that made it more difficult for individuals to get out of debt by filing for bankruptcy. Biden voted yes to the bill, which was passed. Warren, who was a Harvard law professor at the time, spoke out against the initiative. In an essay published earlier this year, Warren wrote that the bill’s passage caused bankruptcy filings to permanently fall by 50% and the number of insolvent people to rise by 25%.

Other candidates to watch

Democratic presidential hopeful Mayor Pete Buttigieg speaks in Rochester, New Hampshire, on November 11, 2019, as he continues his 4-day bus tour of the state. Jim Watson | AFP | Getty Images

Pete Buttigieg, who served as mayor of South Bend, Indiana, is known to have grappled with credit card balances himself, Rossman said. Buttigieg and his husband still reportedly have six-figure student loan debt. “He empathizes with the plight of people in their 20s and 30s who have student debt and credit card debt,” Rossman said. Buttigieg’s policy calls for putting an end to mandatory arbitrations, where disputes are often resolved in favor of credit card companies. Former New York City Mayor Mike Bloomberg’s plan calls for curbing high overdraft fees and aggressive debt collection practices. He also wants to make credit reporting firms more responsible for Americans’ personal financial data. Sen. Amy Klobuchar, D-Minn., co-sponsored a bipartisan bill last year that would make it easier to fix errors on credit reports.


Company: cnbc, Activity: cnbc, Date: 2020-02-18  Authors: lorie konish
Keywords: news, cnbc, companies, rossman, candidate, credit, 930, bill, card, soared, candidates, warren, heres, say, help, biden, debt, billion, presidential


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Should you pay off medical bills with a credit card?

“You want to avoid adding to the pain of medical debt by racking up interest while you work to pay off your credit card.” Double-check your chargesEstimates say that up to 80% of medical bills contain some sort of error, so definitely read over any medical bill intently before paying anything. Before you pay off a medical bill on a credit card, first exhaust all your other avenues for reducing or repaying the balance, Nitzsche tells CNBC Select. When moving medical debt to a credit card, conside


“You want to avoid adding to the pain of medical debt by racking up interest while you work to pay off your credit card.”
Double-check your chargesEstimates say that up to 80% of medical bills contain some sort of error, so definitely read over any medical bill intently before paying anything.
Before you pay off a medical bill on a credit card, first exhaust all your other avenues for reducing or repaying the balance, Nitzsche tells CNBC Select.
When moving medical debt to a credit card, conside
Should you pay off medical bills with a credit card? Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2020-02-15  Authors: elizabeth gravier, alexandria white
Keywords: news, cnbc, companies, pay, bills, card, bill, financial, interest, debt, credit, medical, balance, nitzsche


Should you pay off medical bills with a credit card?

When it comes to having an unexpected doctor’s bill or needing an emergency root canal, it’s worth knowing your payment options before rushing to open your wallet. More than 14% of Americans struggle to pay medical bills, according to a recent report by the Centers for Disease Control and Prevention, and almost a third of working Americans currently have some kind of medical debt (about 28% of those owe $10,000 or more), a new survey by Salary Finance found. Charging your unexpected medical debt on a credit card may seem like a quick fix, but the band-aid solution can actually cost you more pain in the long run. “It’s definitely something people should avoid unless they’re able to pay off the full amount of the charge right away,” Lisa Zamosky, health-care expert and author of “Health Care, Insurance and You: The Savvy Consumer’s Guide,” tells CNBC Select. “You want to avoid adding to the pain of medical debt by racking up interest while you work to pay off your credit card.” Below, Zamosky and financial educator Thomas Nitzsche, of Money Management International, Inc (a 501(c)(3) nonprofit member of the National Foundation for Credit Counseling) share the three things you should consider before charging medical expenses on your credit card.

1. Double-check your charges

Estimates say that up to 80% of medical bills contain some sort of error, so definitely read over any medical bill intently before paying anything. Have a trusted family member or friend be a second set of eyes for any red flags. “Always make sure your bill is accurate — particularly after a hospital stay,” Zamosky says. She recommends that patients request an itemized bill to check that the services seem consistent with the care they received. “Speak to the billing department if something seems off,” she says. “If you’re insured, request your health plan’s assistance.” The process of disputing a medical bill may take a while, but the time spent can save you money.

2. Negotiate your bill

When asking for a discount on your bill, know that medical providers usually offer more flexibility when it comes to your debt than traditional credit card lenders do. And it never hurts to ask, especially when it means saving money. Before you pay off a medical bill on a credit card, first exhaust all your other avenues for reducing or repaying the balance, Nitzsche tells CNBC Select. Explain your financial situation to your health-care provider if you can’t afford to pay the full balance. And if there’s an amount you can afford to pay upfront, offer to pay that immediately in exchange for the remainder of the balance being forgiven. “If that’s not an option, at least ask for a discount on the charges — the Medicare rate, for example, is a good place to start,” Zamosky says. And if they aren’t able to reduce the charges, try negotiating an interest-free payment plan. “Many hospitals and other health-care providers will allow for that,” Zamosky says. “And, again, that’s much preferred to incurring credit card interest.” Check out: The best low interest credit cards of 2020

3. Apply for financial aid

Depending on your situation, you may qualify for financial assistance. And in some states, hospitals are required by law to provide free or reduced services to people who qualify. Nitzsche says many hospitals have “financial aid assistance,” but don’t often advertise it. Typically, you will need to ask to apply for financial aid — and come prepared when you do, as the application entails filling out detailed personal financial information. “Even if you think you will not qualify for aid, it is a good idea to apply because although you may not receive a balance reduction, simply the act of applying can substantially extend your timeframe for repaying the debt — usually at 0% interest,” Nitzsche says. “This alone can make a large bill more affordable.” In the best-case scenario, Nitzsche says his clients have had a portion forgiven with any remaining amount on an interest-free monthly payment plan. Patients can also apply with the makers of their prescriptions for financial aid and/or co-pay cards to reduce the cost. Once you have sought financial assistance, then you can calculate what your monthly payments will be based on the remaining balance.

When you do decide to pay with your credit card

Once you have ensured that your insurance has paid out all benefits (if applicable), and you have exhausted financial aid and/or payment arrangements directly with your medical provider, credit cards should be considered only if you can see a clear and realistic path toward repaying the debt after its charged to the card, Nitzsche says. The Chase Freedom Unlimited® is a simple cash-back card that offers an introductory 0% APR for the first 15 months on purchases and balance transfers, as well as 1.5% cash back on every purchase. As long as you pay off your medical bill balance in full within the first 15 months of your card account opening, you can save on interest while also earning cash back. This card would only make sense if you can confidently pay off your entire medical balance during the introductory 15-month 0% interest period, otherwise we don’t suggest it. When moving medical debt to a credit card, consider 0% balance transfer offers. The Chase Slate® Credit Card offers a low introductory balance transfer offer: $0 fee during the first 60 days of account opening and 0% intro APR for the first 15 months from account opening (then 16.49%–25.24% variable APR).

Whatever you do, don’t wait for your bill to go to collections

Ignoring medical bills is a common habit — and mistake. Disregarding medical bills until they are in collections is not only damaging to your credit, but it can become stressful due to the nonstop calls and notices from collection agencies. “Not paying the bill should only be a course of action if the consumer has exhausted other options or adjustments and can truly only afford their basic housing and living expenses,” Nitzsche says. Sometimes you can offer the collector a settlement, assuming you save up enough money to pay a portion of the total in full, he says. A settlement is an agreement between consumer and creditor of a less-than-full-balance payment (or several larger payments) that, once paid, resolves the debt. It’s worth noting that debt settlement offers don’t always work and they are risky: It takes time to negotiate with your creditor, and it can hurt your credit. Keep in mind that creditors can sue patients for non-payment of their medical debt, but the statute of limitations varies for each state. If you owe money to any hospital or health-care provider, know that the outstanding balance won’t just go away if you decide to not pay it. Medical debt may disappear from your credit report after seven years, but the debt never expires. Information about the Chase Slate® Credit Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.


Company: cnbc, Activity: cnbc, Date: 2020-02-15  Authors: elizabeth gravier, alexandria white
Keywords: news, cnbc, companies, pay, bills, card, bill, financial, interest, debt, credit, medical, balance, nitzsche


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