B.C. Children’s Hospital reported Wednesday a spike in non-COVID-19 respiratory viral illnesses, such as colds and flus in children.
Chinese regulators told cash-strapped property developer Evergrande to focus on completing unfinished properties and repay individual investors while avoiding a near term-term default on its dollar bonds, sources tell Bloomberg.
Financial regulators in Beijing issued a broad set of instructions to China Evergrande Group, telling the embattled developer to focus on completing unfinished properties and repaying individual investors while avoiding a near-term default on dollar bonds.
In a recent meeting with Evergrande representatives, regulators said the company should communicate proactively with bondholders to avoid a default but didn’t give more specific guidance, a person familiar with the matter said. The developer has an $83.5 million coupon due Thursday, with a 30-day grace period to make the payment.
There’s no indication that regulators offered financial support to Evergrande for the bond payment, and it’s unclear whether officials believe the company should eventually impose losses on offshore creditors. Policy makers are trying to learn more about who holds Evergrande’s bonds, the person said, asking not to be identified discussing sensitive information.
While the regulatory guidance offers few clues about what an Evergrande endgame might look like, it does suggest China’s government wants to avoid an imminent collapse of the developer that might roil financial markets and drag down economic growth. Any sign that Beijing is taking steps to give Evergrande more time to manage its debt problems could calm investor nerves in China and around the world.
Fears of an Evergrande failure have caused a sharp rise in borrowing costs for other junk-rated Chinese developers and cast doubt on the health of some smaller Chinese banks. Individual investors, homebuyers and suppliers have staged protests at Evergrande offices across the country, while markets from Hong Kong to New York have convulsed this week as traders weighed the prospect of financial contagion from the world’s most indebted developer.
Even though Evergrande’s crisis can be traced in part to President Xi Jinping’s campaign to rein in over-leveraged property companies and discourage moral hazard, his government is unlikely to welcome a messy default that could threaten economic and social stability. Large cash injections into the financial system by the People’s Bank of China in recent days suggest policy makers are already focused on shoring up sentiment.
Evergrande, the PBOC and the nation’s financial and housing regulators didn’t immediately respond to requests for comment.
Speculation that Evergrande may avoid a worst-case scenario helped lift its bonds and stock on Thursday. The company’s 8.25% dollar note due 2022 climbed 4.8 cents on the dollar to 30 cents as of 5:39 p.m. local time, hitting session highs after Bloomberg reported regulators’ instructions to Evergrande. The bonds are still pricing in expectations of a deep haircut, but not quite as extreme as earlier this week. Shares jumped 18% in Hong Kong before the Bloomberg report, paring this year’s loss to 82%.
The rally was fueled in part by a vaguely worded statement from Evergrande on Wednesday, in which the company said an interest payment on one of its yuan-denominated bonds had been “resolved via negotiations off the clearing house.” The developer likely struck a deal with local bondholders to postpone the payment without having to label the move a default, analysts said.
It’s unclear whether Evergrande would be able to pull off something similar for its dollar bonds. While some of the notes are likely owned by billionaire founder Hui Ka Yan and his associates, holders also include global investment firms that might be less willing to go along with opaque payment arrangements.
Deeply discounted prices for Evergrande dollar bonds suggest investors view a restructuring of some kind as all but inevitable. Offshore bondholders are widely seen as near the bottom of Beijing’s priority list of Evergrande creditors, though that assessment may depend in part on how worried authorities become about Chinese companies’ access to dollar funding. The turmoil at Evergrande, Asia’s biggest issuer of junk bonds, has sent yields on an index of junk-grade Chinese dollar bonds to a decade high.
In a meeting with Evergrande employees on Wednesday, Hui emphasized the importance of resuming construction on unfinished properties, according to Jiemian, a Chinese media outlet. He also said Evergrande will ensure repayment of investment products.
Property sales are a key source of cash for Evergrande, though the company has struggled to attract buyers in recent months amid waning confidence in its ability to deliver on projects. Homebuyers in China often have to make large down payments on properties that may take years to complete. About 1.5 million buyers are currently waiting for Evergrande to deliver unfinished homes.
The company is also trying to offload assets to raise cash, with mixed success. It said earlier this month it hadn’t made material progress on plans to sell stakes in its electric-car and property services units. Evergrande has hired Houlihan Lokey and Admiralty Harbour Capital to “explore all feasible solutions” to ease its liquidity problems.
While the developer doesn’t have any bonds maturing until 2022, it faces about $669 million in coupon payments this year. The bulk of its $300 billion-plus in total liabilities are to homebuyers, suppliers and local financial institutions.
(Updates markets in eighth paragraph.)
Facebook Inc., under fire from regulators and lawmakers over its business practices, is planning to rebrand itself with a new group name that focuses on the metaverse, the Verge reported on Tuesday.
The name change will be announced next week, according to technology blog The Verge, which cited a source with direct knowledge of the matter.
Facebook CEO Mark Zuckerberg has been talking up the metaverse, a digital world where people can move between different devices and communicate in a virtual environment, since July. The group has invested heavily in virtual reality and augmented reality, developing hardware such as its Oculus VR headsets and working on AR glasses and wristband technologies.
The move would likely position the flagship app as one of many products under a parent company overseeing brands such as Instagram and WhatsApp, according to the report. Google adopted such a structure when it reorganized into a holding company called Alphabet in 2015.
Facebook said it does not comment on “rumour or speculation.”
If true, the rebranding would make sense as the core Facebook business becomes less important to the group and it seeks to revamp an image tarnished by regulatory and legal scrutiny of how it handles user safety and hate speech, analysts said.
“It reflects the broadening out of the Facebook business. And then, secondly, I do think that Facebook’s brand is probably not the greatest given all of the events of the last three years or so,” internet analyst James Cordwell at Atlantic Equities said.
Facebook is under wide-ranging scrutiny from global lawmakers and regulators over its content moderation practices and harms linked to its platforms, with internal documents leaked by a whistleblower forming the basis for a U.S. Senate hearing last week.
“Having a different parent brand will guard against having this negative association transferred into a new brand, or other brands that are in the portfolio,” said Shankha Basu, associate professor of marketing at University of Leeds.
Last month, Facebook appointed Andrew Bosworth, who heads up the social media company’s augmented reality and virtual reality efforts, including products like its Oculus Quest VR headset, as chief technology officer.
Metaverse, a term first coined in a dystopian novel three decades earlier, is popular in Silicon Valley and has been referenced by other tech firms such as Microsoft. The popular children’s game Roblox describes itself as a metaverse company. Epic Games’ Fortnite is also considered to be part of the metaverse.
Zuckerberg plans to talk about the name change at the company’s annual Connect conference on Oct. 28, but according to the Verge, it could be unveiled sooner.
WATCH | Tech reporter says Facebook is on the verge of a massive rebrand:
B.C. Children’s Hospital reported Wednesday a spike in non-COVID-19 respiratory viral illnesses, such as colds and flus in children.
That means the emergency room has been busier than normal and long waiting times can be expected.
Thirty per cent of all cases in the hospital’s emergency department in the past month have been children with respiratory illnesses, according to Dr. Claire Seaton, a pediatrician at B.C. Children’s Hospital.
Rates of severe infection caused by COVID-19 remains low and overall only two per cent of people hospitalized in B.C. are under the age of 19.
“That hasn’t changed but what has changed is we are seeing a lot of other viruses, including respiratory syncytial virus, and parainfluenza, along with some of the other common cold viruses.”
Respiratory syncytial virus, or RSV, is a common virus that causes infections of the lungs and respiratory tract, and most children have been infected with the virus by age two. RSV symptoms are mild in healthy children and adults but the virus can cause severe infection in young infants, especially those born prematurely, or young children who have heart of lung disease.
Seaton said they didn’t see many children with colds or flus last year, so they are worried it’s going to get a lot busier in the emergency department because of the RSV surge.
It is not unusual to see a spike in cold and flu viruses after kids go back to school in September and October but this year the kids may have reduced immunity to these common illnesses because it just wasn’t around last year.
Public health measures such as wearing masks, keeping a physical distance, washing hands, and getting a flu vaccine can help to keep the kids safe, she said.
Part of the reason for the surge at B.C. Children’s may be because parents are worried their child has COVID-19 so they take them to the emergency room.
Seaton said if a child has a cough or the sniffles then it’s best to keep them home from school or take them to get a COVID test , but it’s not always necessary to go to the emergency room.
“I think it’s important to realize that the viral surge has already increased hospitalization rates in other parts of Canada,” she said. “So the RSV surge, which normally happens in November, is happening earlier this year … and we are starting to see those cases here.”
If parents are worried about their child’s illness they can check symptoms on the B.C. Children’s Hospital website.
“For respiratory illness, you should take your baby or young child to an emergency department if they have trouble breathing, significant problems with breathing or lips that look blue, and if your baby can’t suck or drink or feed very well,” she said, adding infants younger than three months with a fever should also be brought in to the ER.
Doctors and health experts are recommending that children six months and older get a flu vaccine this year, especially because of the potential for reduced immunity.
“Last year, the rates for RSV infection were very low or basically non-existent so we have a whole year’s worth of children who did not get those viruses so their natural immunity is potentially lower,” she said.
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Competition Bureau Canada watchdog may have to rely more on litigation after its proposed veto of a takeover was overturned, and this could make life harder for companies seeking to merge, the agency head said on Wednesday.
Matthew Boswell, commissioner of competition, noted his bureau had tried this year to block western Canadian oil and gas waste firm Secure Energy Services Inc from buying rival Tervita Corp.
Secure then turned to the independent Competition Tribunal, which denied the bureau’s injunction and underscored “the high bar that needs to be met to prevent mergers … that we allege are anti-competitive,” he said.
The tribunal, he said, had acted so quickly that the bureau had not had time to present all its evidence, raising valid questions about the state of competition laws in Canada.
“This decision has significant implications for how we conduct future merger reviews, particularly in cases where there are competition concerns,” Boswell said in a speech to the Canadian Bar Association.
“This may mean that we must pursue a litigation-focused approach that is costly and less predictable for merging parties,” he added.
Secure relied on the so-called efficiencies defense, which is unique to Canada. Boswell said this procedure allowed the tribunal to allow an anti-competitive merger to proceed if the transaction was deemed to produce efficiency gains that were greater than its anti-competitive effects.
“The efficiencies defense raises significant practical
challenges for the Bureau to estimate and measure anti-competitive harm,” he said. “(We should) ask ourselves whether our competition laws are really working in the best interest of all Canadians.”
The bureau is an independent law enforcement agency set up to ensure fair competition. It investigates price fixing, bid-rigging and mergers, among other matters.
(Reporting by David Ljunggren; Editing by Cynthia Osterman)
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