2024-10-28 18:16

Oct 28 (Reuters) - Yemen's Houthis said on Monday that they targeted three ships in the Red Sea and Arabian Sea, attacks they called part of their efforts to enforce a naval blockade on Israel. Houthi military spokesperson Yahya Sarea said in a televised address the vessels were targeted for attempting to approach ports bound for Israel. According to the latest data from LSEG, all three targeted vessels were Liberia-registered. One of the vessels, identified by the Houthis as Motaro, was last seen off Yemen's western coast in the Red Sea, en route from Egypt’s Suez Canal to Shanghai, according to LSEG data. Another vessel, the SC Montreal, was reportedly targeted in the Arabian Sea while travelling from Seychelles' Port Victoria to Salalah, Oman. The third vessel, the Maersk Kowloon, was tracked by LSEG in the western Indian Ocean, also en route from Salalah. Earlier on Monday, British maritime security firm Ambrey reported two explosions near a merchant vessel travelling 14 nautical miles southwest of Yemen's Al Dhubab. Ambrey's report followed initial statements from the U.K. Maritime Trade Operations (UKMTO) agency, which received information about three explosions related to an incident 25 nautical miles south of Yemen’s port of Mokha, but confirmed that the ship and crew were safe and had continued to their next port of call. Yemen's Houthis said they will continue these actions until Israel halts its offensive on Gaza and Lebanon. This poses significant risks to commercial shipping in the region, a critical route for global trade linking the Red Sea to the Gulf of Aden. Sign up here. https://www.reuters.com/world/middle-east/ukmto-receives-report-incident-south-yemens-mokha-2024-10-28/

2024-10-28 16:47

Oct 28 (Reuters) - Brazil's central bank chief Roberto Campos Neto said on Monday that the volume of subsidized credit in the country has not grown to a point it would impact monetary policy. "It has increased, but not to the extent, as of now, that will change dramatically the neutral rate," he said, referring to the equilibrium rate that neither cools nor overheats the economy. Speaking at an event hosted by Deutsche Bank in London, Campos Neto also noted that private debt securities benefiting from income tax exemptions have risen significantly but likewise do not impact monetary policy, as they do not constitute a credit segment insensitive to the benchmark interest rate. Campos Neto reiterated that Brazil needs to signal fiscal measures that could be seen as a positive shock to address premium risk in interest rate futures, which he said are currently affected by lack of confidence in the sustainable management of public accounts. The central bank governor added that while he was not informed of the measures, their impact would not mechanically alter monetary policy. However, he noted that if perceived as a positive shock, they could potentially influence the long-end of the yield curve, the exchange rate and inflation expectations. "Those variables are important because they are part of our reaction function," he said. Finance Minister Fernando Haddad said that President Luiz Inacio Lula da Silva's government would unveil measures to control mandatory expenses following the municipal elections held on Sunday. Campos Neto also stated that inflation figures in the country have been mixed, highlighting the need for policymakers to have time to analyze the data. Sign up here. https://www.reuters.com/markets/emerging/brazils-central-bank-chief-says-subsidized-credit-growth-not-impacting-monetary-2024-10-28/

2024-10-28 13:45

SAO PAULO, Oct 28 (Reuters) - Azul (AZUL.N) , opens new tab has reached a deal with its bondholders to obtain additional financing of up to $500 million, the Brazilian airline said on Monday, as part of restructuring it expects to ease market concerns about its debt load. Azul, which dominates Brazil's airline industry along with LATAM (LTM.SN) , opens new tab and Gol (GOLL4.SA) , opens new tab, has managed to avoid the fate of a number of Latin American carriers who filed for bankruptcy after the COVID-19 pandemic, including its two main rivals. Sao Paulo-traded shares of the company soared more than 10% after the deal was announced, making them the top gainers in Brazil's benchmark stock index Bovespa (.BVSP) , opens new tab, which was up 0.8%. The announcement comes after Reuters reported last week, citing sources, that Azul was in talks with multiple parties - including its bondholders and lender Jefferies (JEF.N) , opens new tab - to raise about $400 million in fresh capital via debt financing, and an agreement was near. The fresh capital was a condition of Azul's recent deal with lessors to scrap nearly $550 million in obligations in exchange for an equity stake of around 20% of the firm, which analysts see as fundamental to strengthen the airline's cash position. "We expect a positive market reaction as the announced terms have ruled out Chapter 11 proceedings," Bradesco BBI analysts said in a note to clients. Under the deal with bondholders, the carrier said in a securities filing it will receive $150 million this week and another $250 million by year end in fresh debt, totaling $400 million which it had been targeting. QUICK DELEVERAGING The agreement, Azul added, may include another $100 million in financing and a potential debt-for-equity swap of as much as $800 million if the company manages to further improve its cash flow by reducing costs by around $100 million per year. "It will allow for a quick deleveraging of Azul," Chief Executive John Rodgerson said in an interview. "They say 'we are creditors but want to be equity holders if we have this cost reduction'. It is an option, but I'm confident we'll take it." He noted that among the ways for Azul to reach the proposed cost reductions are negotiations with lessors and manufacturers such as Embraer (EMBR3.SA) , opens new tab, Airbus (AIR.PA) , opens new tab, GE (GE.N) , opens new tab and RTX's (RTX.N) , opens new tab Pratt & Whitney. Rodgerson acknowledged the deals imply an equity dilution, but shrugged off concerns on that front. "It's obvious that there will be dilution, but of a much stronger company. It is better to have a smaller piece of a much larger cake," he said. Monday's announcement also includes an agreement to improve cash flow by $150 million by reducing certain lessor and equipment manufacturer obligations over the next 18 months. Azul has renegotiated 98% of its obligations with lessors and manufacturers as part of a previously announced deal that has now been finalized, it noted. Sign up here. https://www.reuters.com/markets/deals/brazils-azul-reaches-deal-with-bondholders-additional-financing-2024-10-28/

2024-10-28 13:43

ABUJA, Oct 28 (Reuters) - The central bank of Nigeria has signed an agreement with the International Finance Corp to expand local currency financing for Nigerian businesses and cut foreign exchange risks, the agencies said in a statement on Monday. The IFC, a World Bank Group member, aims to "significantly scale up" its financing in Nigeria, targeting over $1 billion in the coming years, the statement said. The partnership will enable IFC to manage currency risks and increase its investments in Nigeria's naira currency across agriculture, housing, infrastructure, energy, small and medium-sized enterprises, and the creative industry. "Many of these sectors require local currency financing, and IFC's partnership with the (central bank) is a key tool in expanding access," the statement said. Sign up here. https://www.reuters.com/markets/currencies/nigeria-signs-funding-deal-with-ifc-boost-naira-currency-financing-2024-10-28/

2024-10-28 12:24

Oct 28 (Reuters) - Electric and gas utility CenterPoint Energy (CNP.N) , opens new tab on Monday reported third-quarter profit that missed Wall Street estimates, hurt by higher maintenance costs and lower revenue from its electric segment due to Hurricane Beryl. The company said it has appointed Don Daigler to lead its emergency preparedness and response efforts, following criticism for its power restoration initiatives after Beryl. Beryl had caused significant damage to CenterPoint electric subsidiary Houston Electric's delivery system after its landfall in July, knocking out power for nearly 2.3 million CenterPoint customers in Texas. Restaurants in and around Houston had filed a lawsuit seeking more than $100 million from CenterPoint, alleging incompetence and negligence in the company's efforts to restore power. CenterPoint's third-quarter operations and maintenance costs, which includes expenses related to storm restoration efforts and grid upgrades, rose nearly 20% to $775 million. The company's total quarterly electric revenue declined 1.4% to $1.24 billion, partly owing to outages related to Beryl. It posted an adjusted profit of 31 cents per share for the third quarter, missing analysts' average estimates of 32 cents, according to data compiled by LSEG. Houston Electric said as of Sept. 30, it estimates the total costs of restoring the electric delivery facilities to be about $1.1 billion, excluding carrying costs. Sign up here. https://www.reuters.com/business/energy/centerpoint-misses-third-quarter-estimates-higher-costs-beryl-related-outages-2024-10-28/

2024-10-28 12:18

Banks build rainy-day buffers to prepare for defaults tied to hurricanes Highlights risks to credit portfolios from climate-related events Florida customers expected to see the majority of the impact Oct 28 (Reuters) - Several regional lenders allocated loan-loss provisions in the third quarter to cover potential defaults by borrowers grappling with recent hurricanes, primarily in Florida, highlighting the risks extreme weather and climate change pose to banks. Two devastating hurricanes struck the Sunshine State in late September and early October, causing loss of life, damaging homes, public property, and power lines, and impacting millions living along the coastline. The financial sector is also feeling the impact, with regional lenders like Valley National Bancorp (VLY.O) , opens new tab taking steps to mitigate potential losses. The bank, which has around $62 billion in assets and operates 230 branches nationwide, with 40 of them in Florida, set aside $8 million in reserves to mitigate Hurricane Helene's impact. "While not anticipated based on information currently available, Hurricane Milton and unexpected losses from Hurricane Helene could result in a significant increase to the current hurricane-related reserves within the allowance, loan charge-offs, and our provision for the fourth quarter," the company said in a statement earlier this month. Climate-related risks have long been a concern for banks and regulators, who have been striving to integrate these factors into their loan portfolio assessments. While traditional loan underwriting typically considers economic risks and interest rates, the impact of extreme climate events on borrowers' creditworthiness can be both significant and unpredictable. Properties pledged as collateral for mortgages may be destroyed, prompting banks to adjust their risk ratings. Business closures could also strain customers' finances, prompting them to fall behind on credit card payments. Seacoast Banking Corporation of Florida (SBCF.O) , opens new tab, with $15.2 billion in assets and 77 branches, expects to take provisions of $5 million-$10 million in the fourth quarter due to Hurricane Milton but warns the full impact on hardest-hit regions is still unclear. First Bancorp (FBNC.O) , opens new tab and United Community Banks (UCB.N) , opens new tab took provisions of $13 million and $9.9 million due to Helene. Meanwhile, Florida-based BankUnited (BKU.N) , opens new tab stated it is finalizing its assessment of Milton's impact. The financial loss will extend beyond banks, with analysts expecting insurers to be on the hook for losses exceeding $100 billion. Hurricane Milton devastated Florida, causing at least 10 deaths and widespread power outages. This followed Hurricane Helene, which hit Florida's Big Bend as a Category 4 storm, moved north through several states, and left a trail of destruction and numerous fatalities. Still, banks may see an uptick in business in the upcoming quarters as individuals affected by disasters seek financing to rebuild their homes and revitalize their businesses. Typically, there is a significant rise in loans after such events, driven by higher demand for mortgages, small business, and consumer loans, according to a report , opens new tab published by the Federal Reserve Bank of New York in 2021. Analysts suggest that banks may also provide concessions, such as lower interest rates, deferred payments, and income-contingent plans, to alleviate the financial burden on borrowers. Sign up here. https://www.reuters.com/business/finance/us-regional-banks-with-florida-operations-brace-hurricane-fallout-2024-10-28/