Finance

LAGOS (Capital Markets in Africa) — Call it Helicopter Credit. The Federal Reserve is poised to spray trillions of dollars into the U.S. economy once a massive aid package to fight the coronavirus and its aftershocks are signed into law. These actions are unprecedented, going beyond anything it did during the 2008 financial crisis in a sign of the extraordinary challenge facing the nation. “The Fed has effectively shifted from lender of last resort for…

Fitch Ratings-Paris/London-25 March 2020: The coronavirus pandemic will put pressure on sub-sovereign issuers’ financial profiles, Fitch Ratings says. The main transmission channel to sub-sovereign ratings would be through potential sovereign rating actions rather than the direct impact, but this will vary between local and regional governments (LRGs) and government-related entities (GREs). Fitch rates approximately 300 LRGs and 325 policy-driven GREs globally on its international rating scale. Policy-driven GREs are those whose policy missions are traditionally…

JOHANNESBURG (Capital Markets in Africa) — South Africa is rushing to boost radio spectrum for its main telecommunications companies to avoid a network breakdown as Africa’s most industrialized nation prepares for a three-week lockdown to slow the spread of the coronavirus. The Independent Communications Authority of South Africa is in talks with companies including Vodacom Group Ltd. and MTN Group Ltd. to find ways to provide the wireless carriers with additional capacity, the regulator’s spokesman, Paseka Maleka, said by…

LAGOS (Capital Markets in Africa) — Nigeria opened a new front in the oil price war between some of the world’s largest OPEC+ countries, offering to sell its crude in April at unusually large discounts in an effort to undercut its rivals. Even so, traders said the West African country may not have gone cheap enough. Exports of Qua Iboe and Bonny Light crude — two banner Nigerian grades — will be sold in April for discounts…

LAGOS (Capital Markets in Africa) — As oil crashes due to the impact of the coronavirus, it’s easy to overlook an even more dismal reality for producers: the real prices they’re getting for their barrels are worse still. Having collapsed by about 60% this year, Brent and West Texas Intermediate crude have stabilized at around $25 a barrel, but the price rout is far deeper for actual cargoes, which are changing hands at large and…

LONDON (Capital Markets in Africa) – Boris Johnson’s government is considering tougher action to fight the spread of the coronavirus in London but has denied it is planning to confine residents to their homes or seal off the city. “There are no plans to close down the transport network in London and there’s zero prospect of any restrictions being placed on people traveling in or out of London,” Johnson’s spokesman James Slack told reporters. It is “not…

LAGOS (Capital Markets in Africa) –  The bonds of emerging-market nations are entering distressed territory at an alarming rate as the soaring dollar raises the prospect of government defaults. Fifteen nations now have dollar-bond spreads of at least 1,000 basis points over U.S. Treasuries, a level many investors consider to be the threshold for debt to be classed as distressed. And that doesn’t even include Lebanon, which defaulted this month, and Argentina, which has begun restructuring talks with bondholders. At the…