Latest news with #debt
Bloomberg
14 hours ago
- Business
- Bloomberg
CMBS-Linked Loans Worth $23 Billion Are Gripped by Paralysis
More commercial real estate debt is entering a state of suspended animation as the ripple effects from the pandemic continue to reverberate through the industry. About $23 billion of delinquent commercial mortgage loans bundled into bonds have reached or are approaching their maturity dates, according to an analysis by data analytics firm Trepp, with borrowers increasingly unable or simply unwilling to repay the debt. That compares with virtually zero before Covid upended the market.
Auto Car
17 hours ago
- Automotive
- Auto Car
The dangers threatening to unravel JLR's magical turnaround
JLR has achieved the almost impossible to post its best profit for 10 years, cancel out a £5 billion debt mountain and deliver record dividends to owner Tata Motors. The company managed these impressive feats in its financial year running to the end of March by polishing its Range Rover and Defender brands such that they shone so brightly customers were willing to pay more than for rival vehicles in the premium SUV space. That was hard enough, given the challenges facing an arguably sub-scale company squaring up against global giants like BMW and Mercedes-Benz – but now comes the even harder part.
Daily Mail
20 hours ago
- Business
- Daily Mail
Wall Street veteran who predicted 2008 meltdown issues urgent warning of 'economic heart attack' for US
Billionaire hedge fund titan Ray Dalio, who famously predicted the 2008 financial crash, has sounded a stark alarm over America's spiraling debt. Dalio warned that without swift action to slash the federal deficit, the US could face an 'economic heart attack' in the next three years. 'If the US doesn't cut the deficit to 3 percent of the GDP, and soon, we risk facing an economic heart attack in the next three years,' Dalio wrote on X. 'The good news is that these cuts are possible.' The national debt is nearing $37 trillion — equal to 99 percent of GDP — and the Congressional Budget Office projects it could hit 150 percent by 2055. Dalio, founder of Bridgewater Associates — the world's biggest hedge fund — said a 4 percent adjustment to spending and tax revenues could stabilize the economy and even lower interest rates. 'We know this kind of balance is possible because it happened between 1991 and 1998,' he wrote, pointing to previous bipartisan deficit deals. However, Dalio warned that squabbling between Republicans and Democrats will put off the necessary cuts and only serve to see the national debt and its interest payments grow even more. 'My fear is that we will probably not make these needed cuts due to political reasons, and will have even more debt and debt service encroaching on our spending that will ultimately lead to a serious supply-demand problem.' Dalio has repeatedly warned that economic decisions made by the White House will end in economic catastrophe. In April the billionaire spoke against Trump's decision to launch a global trade war via tariffs on America's trading partners. 'Some people believe that the tariff disruptions will settle down as more negotiations happen and greater thought is given to how to structure them to work in a sensible way,' Dalio wrote in a post on social media site X. 'I am now hearing from a large and growing number of people who are having to deal with these issues that it is already too late.' Dalio has joined a group of other bankers, analysts, and executives who believe the US is heading for a perilous economic moment. JPMorgan's CEO Jamie Dimon warned last month that the US economy was on shifting 'tectonic plates' and warned that inflation could once again rear its ugly head. 'You have all these really complex, moving tectonic plates around trade, economics, geopolitics, and future factors, which I think are inflationary: military, restructuring of trade, ongoing fiscal deficits,; he told the Morgan Stanley US Financials Conference. The co-founder of Home Depot Ken Lagone also raised concerns about US debt, and said it is a 'scary' indicator for the state of the economy. The billionaire said he hoped Washington would heed his warning that 'we have to be mindful of the importance of our status in the world economy and the world markets. 'If we fritter that away, we're in trouble,' the 89-year-old said. 'Four weeks ago, we couldn't float a 20-year bond. They were unbiased. That's a dangerous signal. That's the beginning,' Langone said referencing recent crises in the bond market. As well as rising debt interest payments, the federal government is also seeing the squeeze from bigger demands on Medicare and Social Security as the population ages and lives longer.
Telegraph
20 hours ago
- Business
- Telegraph
Savers hit with hefty fees at Britain's biggest pension scheme
Britain's biggest pension scheme is set to charge workers hundreds of pounds in additional fees because of delays in paying off its taxpayer-funded loan. National Employment Savings Trust (Nest) levies a 1.8pc 'contribution charge' on its 13.8 million members to help pay off a £1.2bn debt to the Government. The loan was initially scheduled to be repaid by 2032, but this was pushed back to 2038 because of slower than expected income growth. The delay means a worker earning £50,000 who saves with Nest would pay an extra £440 in contribution charges over the seven-year period from 2032 to the end of 2038, analysis shows. A worker earning £100,000 would pay £945 more. Nest was created in 2010 to ensure that all workers can save into a pension. The scheme was designed to be a 'low-cost' alternative to traditional pension funds. However, industry experts have accused Nest of offering members and taxpayers poor value for money, as high fees are used to cover a mountain of debt and generous staff pay. A previous Telegraph investigation found that six Nest employees are paid over £250,000 a year, while 17 earn more than Prime Minister Keir Starmer. Nest levies an 'annual management charge' of 0.3pc on the total value of a pot each year, in line with rival pension schemes such as the People's Pension and Now Pensions. Yet unlike with other providers, Nest savers also incur a second fee – a 'contribution charge' of 1.8pc on each new payment into their pot. Nest has insisted that the contribution charge is levied on members in order to pay off the government loan taken out to set up the scheme. But it has refused to rule out keeping the charge, even once the debt has been fully repaid. The loan was worth £171m in 2012, but annual interest and additional borrowing has meant the debt has now risen to almost £1.2bn. Nest's latest annual report shows that it made a profit for the first time this year, and made its first £6m repayment towards the loan. It said that it was on track to fully repay the loan by 2038. However, George Sweeney of Finder, said the initial repayment was 'a drop in the ocean' compared to the remaining balance, and that the 2038 repayment date was 'highly optimistic'. He added: 'Even assuming the loan doesn't grow further – which it will, due to accruing market-rate interest – Nest would need to repay around £92m per year for 13 years. That's over 15 times the amount it repaid this year. 'The scheme is banking on continued growth in member numbers and assets under management to speed up its loan repayments. 'While Nest may experience continued growth, the scale up required to hit the 2038 repayment goal seems somewhat unrealistic. 'If Nest falls short, it's the members who will lose out, continuing to pay the fees that were supposed to help pay back this loan.' Tom Selby, of wealth management firm AJ Bell, said: 'Nest's 1.8pc contribution charge was always an awkward compromise designed to help pay off its massive set-up loan, adding extra cost and complexity for members. 'While Nest eventually becomes a low-cost pension scheme for most people, the contribution charge clearly eats into that value and continues to be a running sore for the scheme. 'From the perspective of millions of hard-working pension savers, the sooner the loan is paid off and the contribution charge consigned to the dustbin, the better.' Nest was approached for comment.
ABC News
21 hours ago
- Business
- ABC News
Dartbrook Hunter Valley coal mine cuts workforce as debt snowballs
A New South Wales coal mine on the brink of collapse has terminated more than half its staff while its debts appear to have soared to more than $800 million. Dartbrook Mine, an underground thermal coal joint-venture by Australian Pacific Coal and Tetra Resources, had sat empty for 19 years until it was revived at the end of 2024. But the Hunter Valley mine went into external administration and receivership earlier this month, after failing to meet its obligations for a $174 million loan to Singaporean commodities giant Vitol. The receivers, who are operating the mine, terminated more than 100 miners or more than two-thirds of Dartbrook's workforce, on Monday. Do you know more about this or have a similar story? Email FTI Consulting, the firm acting as the receiver that is operating the site, said in a statement making the mass terminations "wasn't an easy decision" but it was "necessary for Dartbrook's long-term future". Previously, FTI Consulting said it had been appointed as receivers to support the "long-term future" of the Dartbrook coal mine. "We intend to continue operations onsite and work with relevant stakeholders while an urgent assessment of options is undertaken," receiver Ben Campbell said previously in the statement. Mining and Energy Union (MEU) president Robin Williams said the mass terminations were "disgraceful". "Over the weekend, operations were wound down while workers were left in the dark, waiting to hear if they would be required," he said. "Many of them have now been unceremoniously notified by email that they no longer have a job. "It's hurting families and the local community." Mr Williams said that while employees had been cut, labour hire contractors at the site had been kept on and claimed that the decision was made without proper consultation with workers, breaching the enterprise agreement. The MEU said it would fight for workers and has already filed a case with the Fair Work Commission. It comes as Dartbrook's debt and number of creditors continue to climb. Minutes from a creditor's meeting held earlier this month showed that at least 51 companies claimed they were owed money. The total debts exceed $820 million, not including its $174 million loan to Vitol. The largest creditor was UK-based non-bank loan agency, Global Loan Agency Services (GLAS), which claimed it was owed more than $800 million. The ABC understands that they have claimed $202 million from four different entities. The ABC has contacted GLAS for comment. Administrators from Deloitte were appointed to another entity, Tetra Dartbrook, at the end of last week. The Deloitte administrators have applied for a six-month extension to push back the next time creditors will meet until February next year. The matter is being heard at the Federal Court on Wednesday. Deloitte was already acting as the administrator of several entities relating to Tetra Resources, while insolvency firm McGrath Nicol is administering entities involved with Australian Pacific Coal. Local businesses owed money have voiced their concerns about those debts ever being paid, especially in the wake of the job cuts. Hunter Valley business EMF Group is subcontracted to work at Dartbrook's coal washery and is owed $282,000. Director Jason Anderson said after hearing news of the mass redundancies, it was "not looking good". Jim Eastley, a Hunter Valley local, said his business, CE Mining, was owed more than $500,000. "It's pretty tough to swallow," Mr Eastley previously said. "We're hoping that things can turn around and the mine will become productive … but that's a long way off at the moment." Muswellbrook Shire Mayor Jeff Drayton previously said the debts Dartbrook owed local businesses were "enough that it might be enough to break some of these smaller companies". He said half a dozen local businesses with debts exceeding $3 million between them had contacted him. Cr Drayton said Dartbrook also owed the Muswellbrook Shire Council unpaid rates.
