Philippines launches new long-term U.S. dollar bonds issue

MANILA - The Philippine government launched an offering of 10.5-year and 25-year U.S. dollar-denominated bonds on Wednesday to raise funds needed to mitigate the economic damage of the coronavirus pandemic.

The long-term benchmark bonds would carry a yield of around 100 basis points above the 10-year U.S. Treasury benchmark, based on the government's initial guidance.

National Treasurer Rosalia De Leon could not say at this stage how much the government aimed to raise from the bond sale, which follows a similar U.S. dollar bond offering in April that raised $2.35 billion. 

The Philippines, one of Asia's most active issuers of sovereign debt, would use the proceeds from the bond sale to support its budget, the Bureau of the Treasury said.

Both chambers of congress have approved a record 4.5 trillion pesos ($93.7 billion) budget for 2021, part of which will be used to purchase COVID-19 vaccines as the government aims to immunize a third of its 108 million population.

Credit Suisse, Daiwa Capital Markets, Deutsche Bank, Morgan Stanley, Standard Chartered Bank and UBS are joint bookrunners, IFR reported. 

Fitch assigned a 'BBB' rating to the country's proposed USD bonds, while Moody's gave the Philippines' global dual-tranche bond offerings a 'Baa2' rating.

-reuters-

Airbnb aims for $35 billion valuation in long-awaited IPO

NEW YORK - Airbnb Inc said on Tuesday it is aiming for a valuation of up to $34.8 billion in its initial public offering (IPO), in what would cap a stunning recovery in its fortunes after the U.S. home rental firm's business was heavily damaged by the COVID-19 pandemic earlier this year.

In a regulatory filing, Airbnb set a target price range of between $44 and $50 apiece to sell 51.9 million shares, which would pull in $2.6 billion. Airbnb could end up selling $2.85 billion at the upper end of the range.

Of the shares being sold, Airbnb founders Brian Chesky, Joe Gebbia and Nathan Blecharczyk will together sell nearly $100 million worth of shares in the IPO launch. 

Airbnb struggled in the immediate aftermath of the pandemic as travel came to a grinding halt. It had to lay off a quarter of its workforce and seek $2 billion in emergency funding from investors, including private equity firms Silver Lake and Sixth Street Partners.

But as lockdowns eased, more travelers opted to book homes instead of hotels, helping Airbnb post a surprise profit for the third quarter. The San Francisco-based firm also gained from increased interest in renting homes away from major cities.

"Looking at Airbnb there's a lot to like. The company's third quarter has shown they've bounced back better than a lot of their travel rivals," said Matthew Kennedy, senior strategist at IPO research firm Renaissance Capital.

At the top of Airbnb's target range, the IPO will give Airbnb a fully diluted valuation, which includes securities such as options and restricted stock units, of $34.8 billion. This is nearly double the $18 billion Airbnb was worth in an April private fundraising round and above the $31 billion in its last pre-COVID-19 private fundraising in 2017.

Airbnb's market capitalization at $50 per share would total $29.8 billion. Chesky's stake would be valued at about $3.8 billion, while those of Gebbia and Blecharczyk would be worth about $3.5 billion each. Sequoia Capital, which first invested in Airbnb in 2009, would have a stake worth more than $4 billion.

Airbnb made its IPO registration public earlier this month. Reuters was the first to report in October that the startup was aiming to raise around $3 billion in its IPO that could value it at more than $30 billion. 

Airbnb plans to list on Dec. 10 under the symbol "ABNB" on Nasdaq.

LONG-AWAITED IPO

Airbnb's stock market debut will be one of the largest and most anticipated U.S. IPOs of 2020, which has already been a bumper year for flotations. Record label Warner Music Group, data analytics firm Palantir Technologies and data warehouse company Snowflake Inc have all gone public in the past few months.

Airbnb was launched by Chesky and Gebbia in 2008 as a website to take bookings for rooms during conferences, including the Democratic National Convention that year in Denver.

It has since expanded listings to include apartments, houses and vacation rentals, allowing millions of ordinary homeowners to make money by renting their flats and houses while on their own holidays.

Airbnb achieved "unicorn" status in 2011, with listed properties in 13,000 cities across more than 180 countries at the time, after being valued at more than $1 billion in a funding round led by Andreessen Horowitz.

Some of Airbnb's other investors include Hollywood actor Ashton Kutcher, buyout firms General Atlantic, TPG, Hillhouse Capital and investment management firms Vanguard Group and Fidelity Investments.

Morgan Stanley and Goldman Sachs are the lead underwriters for the IPO.

-reuters-

Philippine stocks see best week since June as virus slows, foreign buying up

MANILA - Philippine stocks surged 2.2 percent on Friday closing at 6,484.06 to end the week with their biggest gain since June, bolstered by the easing of restrictions as new coronavirus cases showed signs of slowing.

The Philippine stock exchange index saw a near 10 percent weekly gain, with shares of food and real-estate companies climbing most, as investors hoped for increased footfall in malls and hotels after curfew hours were trimmed earlier this week.

The rally was boosted further by foreign investors, as new daily coronavirus cases slowed in the last week and the government moved to reopen the economy, signalling better economic prospects, said Nicholas Mapa, ING's senior economist for the Philippines.

"This may be the reason for the recent rally, but we'll have to monitor the COVID-19 developments going forward," he cautioned.

Data from Refinitiv showed that foreigners, while still net sellers of Philippine equities so far in October, pumped in about 557.44 million pesos ($11.5 million) into Philippine equities across the last two sessions.

Yields on the Philippine ten-year benchmark bond, usually seen as a safer investment than stocks, have also climbed recently, signalling the return of optimism.

-reuters-  

Fed's appetite for further easing, higher inflation in focus

The U.S. Federal Reserve last month signaled that interest rates are likely to stay at zero through 2023, vowing to wait on rate hikes until inflation reaches 2 percent and is set to rise moderately above that level for a time.

How much above 2 percent, for how long, and how the central bank might speed the process forward - the new guidance doesn't say.

Minutes of the Fed's September meeting to be published Wednesday at 2 p.m. EDT (1800 GMT) should provide a window into the Fed's internal debate on those issues and, perhaps, some new answers on what it will mean in practice.

With an ongoing pandemic that's claimed more than 210,000 U.S. lives and a recession that has left millions without jobs, it's clear there is a lot at stake.

Fed Chair Jerome Powell warned Tuesday that the outlook for the U.S. economy is "highly uncertain," and that too little policy support could lead to more household and business insolvencies and "recessionary dynamics" where a weak recovery feeds on itself.

The minutes may show how widely shared that concern is.

In remarks since the September meeting, St. Louis Fed President James Bullard for one has said he expects the U.S. economy to notch a near-full recovery from the coronavirus recession by year's end.

On the other end of the spectrum is Boston Fed President Eric Rosengren, who has warned that a second wave of Covid-19 this fall and winter could set the recovery back and create a credit crunch.

With just a few weeks until Nov. 3 when Americans pick their next president, which way the economy develops could spell a very different policy environment for whoever wins at the ballot box.

The Fed's September decision drew two dissents. Dallas Fed President Robert Kaplan thought it tied the Fed's hands unnecessarily. Minneapolis Fed President Neel Kashkari wanted an even higher bar for future rate hikes.

But even among those who supported the decision, the minutes may show a range of views on how it should be carried out. Of particular interest will be any evidence of appetite for adding to the Fed's $7.1 trillion stash of bonds and other assets to ease policy further, either soon or once the recovery is further along.

Fed policymakers appear divided on how high the Fed should try to push inflation, which for years has failed to meet the Fed's 2 percent target and is expected to end this year well below that level.

Chicago Fed President Charles Evans wants to get core inflation up to 2.5 percent, and for it to stay there for a while. Kaplan, by contrast, said last week he would be uncomfortable with 2.5 percent inflation, and worries about excess risk-taking with rates at zero for too long

-reuters-

Cineworld shuts UK, U.S. theaters, impacting 45,000 jobs

Cineworld will close all of its UK and U.S. movie theaters later this week, leaving as many as 45,000 workers unemployed for the foreseeable future as it strives to survive the impact of the coronavirus crisis on the film industry.

Confirming weekend reports on the closures by Reuters and UK media, the company's statement on Monday spelt out the scale of the job losses, which take in ancillary staff including cleaners and security as well as its own employees.

The world's second-biggest cinema chain, which reiterated it was looking at all ways of raising additional funds, said it was suspending operations at all of its 536 Regal theatres in the U.S. and its 127 Cineworld and Picturehouse theatres in the UK from Oct. 8.

"Cineworld will continue to monitor the situation closely and will communicate any future plans to resume operations in these markets at the appropriate time, when key markets have more concrete guidance on their reopening status," the UK-listed company said.

It said its main commercial priorities now were to cut costs and hold onto the cash it has.

Cineworld began reopening in July after virus-related restrictions started to ease, but the further postponement of James Bond film "No Time To Die" and other releases including Marvel's "Black Widow" have left the months ahead looking bleak.

London brokerages estimated shares in the company, which have plummeted more than 80 percent this year, would drop another 30 percent from current levels when the market opens on Monday.

-reuters-

JPMorgan Chase asks some managers to return to the office

NEW YORK - JPMorgan Chase, the largest US bank, has asked the heads of its sales and trading units to return to the office by September 21, a person familiar with the plans said Thursday.

The announcement was made during a telephone conference call with the team leaders of those units, many of whom have already returned to the bank's downtown offices, the source told AFP.

JPMorgan Chase CEO Jamie Dimon has spent most of the summer in the New York City office.

The bank's request however is addressed to the heads of these divisions, not to all employees.

JPMorgan plans to be flexible with people who have to manage childcare problems, as many area schools have moved partially or entirely to online courses.

They also will be flexible with employees who are at high risk of exposure to the novel coronavirus, or live with someone at high risk.

JPMorgan plans to monitor the pandemic in each city and location where it operates and adjust to changing circumstances.

The bank believes that having these employees in the office strengthens culture, creates a more cohesive work environment and is important for training newcomers.

Contacted by AFP, JPMorgan Chase declined to comment on the changes, first reported by the Wall Street Journal.

The activities of JPMorgan, as well as all of Wall Street's major financial institutions, were seriously disrupted earlier in the year when the Covid-19 pandemic began to spread, especially affecting New York City.

Many employees opted for teleworking while others have been relocated to emergency sites.

This did not prevent the Wall Street giant from posting record profits in the second quarter of 2020 thanks especially to brokerage and investment banking activities.

Agence France-Presse

Unemployment claims in US show layoffs continue to batter economy

More than five months after the coronavirus pandemic began throttling the economy, layoffs remain widespread, the U.S. government reported Thursday, the latest sign of the labor market’s painstakingly slow recovery.

Last week, 833,000 workers filed new claims for state unemployment benefits, while 759,000 new claims were filed by freelancers, part-time workers and others under a federal program called Pandemic Unemployment Assistance. Both figures, which are not seasonally adjusted, were increases from the previous week.

“It’s pretty bad at this stage in the crisis,” said Gregory Daco, chief U.S. economist at the forecasting firm Oxford Economics. “I feel like this is a very fragile labor market at a critical juncture.”

There has been progress from the early days of the pandemic, when weekly tallies of new claims surged past 6 million. But recent improvements have been more arduous.

Of the 22 million jobs lost in March and April, more than 9 million have been regained. And most analysts expect that the monthly jobs report, scheduled for release Friday, will show a dip in August from double-digit unemployment rates.

But the damage to the economy has been wide and deep. As of mid-August, more than 29 million Americans were receiving some sort of unemployment insurance.

The report Thursday was the first to be affected by a change in the way the Labor Department accounts for predictable seasonal patterns, like temporary holiday workers who are laid off in January.

The seasonally adjusted figure for the week was 881,000. The number looks much lower than the previous week’s adjusted figure of just over 1 million, but the drop can be attributed to the altered methodology. Because the change means seasonally adjusted numbers cannot be compared with those tallied until now, The Times is emphasizing the unadjusted figures.

The unadjusted number of 833,000 last week was an increase from 826,000 the week before.

Daco said he was particularly concerned about the increase last week in new claims for Pandemic Unemployment Assistance, the program for those generally ineligible for state jobless benefits. The total of 759,000 was up from 608,000 a week earlier.

“It could reflect a weakening economy in some of the states worst impacted by the health crisis,” he said, “or it could be that some of the workers that had returned are finding that it’s not possible or sustainable to return to their primary economic activity in the current environment.”

Help wanted, depending on the industry.

Some businesses are hiring. Postings at the job search site Indeed rose slightly last week, although the total is still more than 20% below what it was this time last year.

The hospitality, tourism, and sports and fitness sectors are in the worst shape, with postings down more than 40% from where they were a year ago. Listings for higher-wage jobs in banking, finance and software development are also much more scarce.

Construction, driving and warehouse jobs seem to be the most plentiful.

The job site ZipRecruiter has seen a gradual increase in job listings over the past couple of months, but the pace of growth began to slow in mid-August, said Julia Pollak, the company’s economist.

Consumers pulled back on spending after a $600 weekly jobless benefit supplement ceased in July. At the same time, many small businesses are running out of the money they received through the federal Paycheck Protection Program.

A recent survey from the National Federation of Independent Business found that 1 out of 5 small-business owners said they would have to shut down if economic conditions did not improve in the next six months.

Congressional negotiations on a new relief package remain at a standstill.

The Labor Department report provided no fundamental change in the jobs picture that would resolve the stalemate between Republicans and Democrats in Congress over a new economic relief package.

With the end of the $600-a-week jobless benefit supplement, most states are moving ahead with plans to provide unemployed workers with a temporary replacement: a weekly $300 supplement paid out of federal disaster relief funds.

As of Wednesday, 45 states had applied for a grant from the Federal Emergency Management Agency. Six of those — Arizona, Louisiana, Missouri, Montana, Tennessee and Texas — have started paying out benefits, according to the Labor Department, but a vast majority have not.

Most will probably not be able to gear up to start payments until mid-September or later. The supplement is expected to last four or five weeks.

South Dakota is the only state that has confirmed it is not taking part. Gov. Kristi Noem says her state doesn’t need the money.

A handful of states, including Kentucky, Montana and West Virginia, have plans to boost the supplement with an additional $100.

-Patricia Cohen and Gillian Friedman, The New York Times-

Creditors take control of struggling Cirque du Soleil

MONTREAL, Canada - A group of Cirque du Soleil creditors has announced it will take control of the heavily indebted Canadian circus troupe.

Suitors had until Tuesday afternoon to better the proposal of the dozen lenders, led by the Canadian fund Catalyst Capital Group.

The world's most famous circus troupe, placed under the protection of the courts, later said that the proposal -- estimated at more than $1.2 billion -- had not been topped, according to Canadian media.

The creditors' offer will still have to be validated by the Quebec courts in the coming weeks.

According to the Globe and Mail, the creditors will inject $300 million to $375 million into the circus and also agree to reduce the circus's guaranteed debt from $1.1 billion to $300 million. 

Gabriel de Alba, managing director of Catalyst, welcomed the "great result for Cirque", its employees, artists and partners, in an email sent to AFP.

"Now with the company's recent missteps put behind, we are eager to close the transaction quickly and support the company as it rekindles the magic and artistry that have made Cirque du Soleil an iconic global brand and creative force," he said.

Founded in Quebec in 1984, the troupe of acrobats had to cancel 44 productions around the world in March, due to the coronavirus pandemic.

It has laid off 4,679 acrobats and technicians, 95 percent of its employees.

The agreement with the group of creditors, announced in mid-July, replaces the takeover offer that it concluded at the end of June with its current shareholders, the American TPG and Chinese Fosun, as well as the Caisse de deposit and placement of Quebec (CDPQ).

Agence France-Presse

Saudi Aramco profits dive 73 percent as virus batters oil demand

RIYADH - Energy giant Saudi Aramco said on Sunday its second-quarter profits plunged a massive 73 percent due to sharply lower oil prices as the coronavirus crisis undercuts global demand. 

The behemoth, recently dethroned by Apple as the world's most valuable listed company, posted a net profit of $6.6 billion for the three months to June 30 compared to $24.7 billion for the same period of 2019.

The results are in line with analysts' expectations but stand in contrast to the losses reported by its rival energy giants, which are reeling from a drop in oil demand since the start of the novel coronavirus pandemic.


"Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results," Aramco's chief executive Amin Nasser said in a statement.

"Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce and unrivalled financial and operational strength."

Aramco's net profit for the first half of the year also slumped by 50.5 percent to $23.2 billion, compared to $46.9 billion in the same period last year.

The results underscore a downbeat oil market as pandemic-driven economic shutdowns crush the global demand for crude.

Five other leading oil firms -- BP, Chevron, ExxonMobil, Royal Dutch Shell and Total -- recently reported combined losses of $53 billion for the second quarter.

By contrast, Aramco's results reflected its "financial resilience", Nasser said, as the company presses ahead with a plan to pay $75 billion in dividends this year.

Nasser also voiced optimism over what he called a "partial recovery in the energy market" amid an easing of virus restrictions in some countries.

But amid low crude prices, Aramco is looking at cutting its 2021 budget by between eight and 10 percent from this year's already reduced levels, the Energy Intelligence group reported last month.

Aramco has said it expects capital expenditure to be at the "lower end of the $25 billion to $30 billion range" this year.

That is significantly lower than its expenditure of $32.8 billion in 2019, according to Energy Intelligence.

"Cutbacks have already caused Aramco to delay plans to expand production from its offshore fields," Energy Intelligence said in a report.

"The offshore program was a core element of a push to raise the company's oil production capacity."

The company has also slashed hundreds of jobs as it seeks to reduce costs, Bloomberg News reported in June.

Saudi Arabia, the world's biggest crude oil exporter, has been hit hard by the double whammy of low prices and sharp cuts in production.

A sharp drop in oil income is expected to hinder Crown Prince Mohammed bin Salman's ambitious plans to overhaul the kingdom's energy-reliant economy.

Oil prices dropped to a two-decade low below $20 a barrel in April and May as the coronavirus dampened demand, before recovering to around $44 a barrel after the OPEC+ producers agreed to record output cuts.

Following the move, Saudi oil production dropped to 7.5 million barrels per day in June, compared to last year's average of 10 million bpd.

Aramco's profits were also impacted by the losses posted by the Saudi Basic Industries Co. (SABIC), the petrochemicals giant it acquired for $69 billion in a deal completed this year.

The energy giant is bracing for a possible further wave of coronavirus infections that could impact a tentative global economic recovery and erode the demand for crude worldwide, analysts say.

Aramco was listed on the Saudi bourse in December following the world's biggest IPO, generating $29.4 billion for 1.7 percent of its shares.

US technology firm Apple last week replaced it as the world's most valuable company after its capitalisation grew to $1.9 trillion, compared to $1.76 trillion for Aramco.

Nasser said Aramco would distribute $18.75 billion in dividends for the second quarter to keep its listing promise of distributing at least $75 billion in annual dividends for five years.

"We are committed to delivering sustainable dividends through market cycles, as we have demonstrated this quarter," Nasser said in a media call, according to Bloomberg News.

"Our intention is to pay $75 billion, subject to board approval, of course, and market conditions."

Agence France-Presse

HSBC profits hammered by pandemic, soaring US-China tensions

HONG KONG - HSBC on Monday said profits for the first half of 2020 plunged by 69 percent on year as the banking giant was hammered by the coronavirus pandemic and spiralling China-US tensions.

The lender reported post-tax profits of $3.1 billion while pre-tax profit was $4.3 billion, a 64 percent drop on the same period last year. Reported revenue was down nine percent at $26.7 billion.

Chief executive Noel Quinn described the first six months of the year as "some of the most challenging in living memory".

"Our first-half performance was impacted by the COVID-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility," he said in a statement to the Hong Kong stock exchange, 

Even by the standards of the current economic maelstrom engulfing global banks, HSBC has had a torrid year. 

Before the coronavirus crisis it was beset by disappointing profit growth, ground down by US-China trade war uncertainties and Britain's departure from the European Union.

The Asia-focused lender embarked on a huge cost-cutting initiative at the start of the year, including plans to slash some 35,000 jobs as well as trimming fat from less profitable divisions, primarily in the United States and Europe.

The coronavirus upended some of that cost-cutting drive with banks hammered by market volatility and the economic slowdown caused by the pandemic.

But HSBC has a further headache -- geopolitical tensions via its status as a major business conduit between China and the West.

HSBC makes 90 percent of its profit in Asia, with China and Hong Kong being the major drivers of growth.

Caught in crossfire

As a result it has found itself more vulnerable than most to the crossfire caused by the increasingly bellicose relationship between Beijing and Washington.

The bank has tried to stay in Beijing's good graces. 

It vocally backed a draconian national security law that Beijing imposed on Hong Kong in June to end a year of unrest and pro-democracy protests.

The move sparked criticism in Washington and London but analysts saw it as an attempt to protect its access to China, which has a track record of punishing businesses that do not toe Beijing's line.

But that has not shielded it from Beijing's wrath. 

Last month the bank was a subject of multiple reports in China's state-run media claiming that it had helped to provide the evidence that led to the arrest in Canada of Huawei executive Meng Wanzhou on a US arrest warrant.

HSBC released a statement on its Chinese Weibo accounts saying it had not "framed" telecom giant Huawei or "fabricated evidence" that led to the arrest of Meng.

China's internet censors blocked access to HSBC's statement within hours of publication, without offering an explanation.

Quinn referenced the bank's growing political vulnerability in Monday's statement.

"Current tensions between China and the US inevitably create challenging situations for an organization with HSBC's footprint," he said.

"However, the need for a bank capable of bridging the economies of East and West is acute, and we are well placed to fulfil this role," he added.

The bank's Asia operations continued to show "good resilience", Quinn said, with profit before tax of $7.4 billion.

Earlier this year Quinn put some of the job cuts on hold as the pandemic struck.

But in Monday's statement he vowed to press ahead with the cost-cutting.

"As we seek to accelerate our transformation in the second half of the year, I am mindful of the impact it will have for some of our people, particularly those leaving us," he said. 

Agence France-Presse

Lord & Taylor, Men’s Wearhouse owner file for bankruptcy

NEW YORK (AP) — Lord & Taylor, one of America’s oldest department stores, has filed for bankruptcy, joining a growing list of stores slammed by the coronavirus pandemic. Tailored Brands, the parent company of Men’s Wearhouse and Jos. A. Banks, filed for bankruptcy as well.

Many of the companies that have filed for Chapter 11 in recent weeks were already struggling, but the forced closure of non-essential stores in March pushed them to the brink.

Lord & Taylor, which was sold to the French rental clothing company Le Tote Inc. last year, filed Sunday for bankruptcy protection in the Eastern Court of Virginia.

In an announcement on its website the company, one of the oldest American department stores, said it was looking for a new owner.

Like many retailers, Lord & Taylor was already struggling with the shift to online shopping even before the pandemic struck this spring. Last year, it sold its flagship building on New York’s Fifth Avenue after more than a century in the 11-story building.

The company was founded as a dry goods store in 1826. There are several dozen Lord & Taylor stores across the country.

Tailored Brands, which filed for Chapter 11 Sunday in the Southern District of Texas, said it would continue to operate Men’s Wearhouse and Jos. A. Banks stores, along with K&G Fashion Superstore and Moores Clothing for Men, which it also owns. It said in a release that a restructuring plan is expected to reduce the company’s funded debt by at least $630 million and provide increased financial flexibility.

As many people have switched to working at home, brands that sell clothes targeted at offices workers have had a particularly hard time. Brooks Brothers and the parent company of Ann Taylor are among those that have also filed for bankruptcy.

As of July 23, roughly 40 retailers, including big and small companies, had filed for Chapter 11 bankruptcy so far this year. That exceeds the number of retail bankruptcies for all of last year. About two dozen of them have sought bankruptcy protection since the pandemic started.

Others include J. Crew, J.C. Penney, Neiman Marcus, Stage Stores, and Ascena Retail Group, which owns Lane Bryant in addition to Ann Taylor.

Associated Press

Kodak to launch new pharmaceuticals business using $765 million federal loan

WASHINGTON -- Erstwhile photo giant Eastman Kodak will launch a new business manufacturing pharmaceuticals amid the coronavirus pandemic, using a $765 million government loan, the company announced Tuesday.

The loan from the US International Development Finance Corporation (DFC) will fund the creation of Kodak Pharmaceuticals, which "will produce critical pharmaceutical components that have been identified as essential but have lapsed into chronic national shortage," the agency said in a statement.

The firm, which signed a "letter of interest" with the DFC on Tuesday, will produce "up to 25 percent of active pharmaceutical ingredients used in non-biologic, non-antibacterial, generic pharmaceuticals." 

Kodak, once a giant in the world of photography whose business has struggled in recent years as cell phones have replaced cameras and film, will expand its existing facilities in Rochester, New York and St. Paul, Minnesota.

The company said the new pharmaceutical business will support 360 direct jobs and 1,200 indirectly. 

"By leveraging our vast infrastructure, deep expertise in chemicals manufacturing and heritage of innovation and quality, Kodak will play a critical role in the return of a reliable American pharmaceutical supply chain," the company's Executive Chairman Jim Continenza said in the statement.

The DFC loan is the first to be made after President Donald Trump in May signed an executive order aimed at encouraging domestic production of materials needed to fight COVID-19.

While Americans consume about 40 percent of the components used to make generic pharmaceuticals worldwide, only about 10 percent of those are made in the country's borders, the DFC said.

"We are pleased to support Kodak in this bold new venture," DFC Chief Executive Adam Boehler said. "Our collaboration with this iconic American company will promote health and safety at home and around the world."

Agence France-Presse

Fitch cuts outlook for Japan credit rating on virus impact

TOKYO - International rating agency Fitch Ratings Inc. has revised down its outlook for Japan's credit rating from stable to negative, citing a sharp economic contraction triggered by the coronavirus pandemic.

"A downturn in consumer spending and business investment has been exacerbated by a steep decline in exports associated with weak external demand," the agency said in a news release Tuesday.

While maintaining the sovereign rating at A, Fitch warned that "sharply wider fiscal deficits in 2020 and 2021, as we project, will add significantly to the country's public debt, which even before the pandemic was the highest among Fitch-rated sovereigns as a share of GDP."

The Japanese parliament approved two supplementary budgets for fiscal 2020 in April and June to help cushion the impact of the coronavirus epidemic.

The rating agency said it projects the world's third-largest economy to contract by 5 percent in 2020, before rebounding to 3.2 percent growth in 2021.

Fitch revised its outlook for Japan's credit rating for the first time since April 2017, when it was raised to stable from negative.

Last month, S&P Global Ratings also downgraded its outlook for Japan's sovereign rating to stable from positive, citing a similar reason.

Kyodo News

Gold hits record high on haven demand as markets rally sputters

HONG KONG -- Gold hit a record high Monday as investors rushed into the safe-haven on concerns about China-US tensions, a spike in virus infections around the world and a lack of progress on a new stimulus bill in Washington.

After months of healthy rallies across equity markets -- fuelled by trillions of dollars in government and central bank support -- traders are beginning to step back as they weigh the long-term economic impact of the coronavirus.

With vast monetary easing measures put in place by the Federal Reserve pushing the dollar lower against most other currencies, gold is flying, hitting an all-time high of $1,944.71, well above its previous record of $1,921.18 seen in 2011. It later pulled back slightly.

Eyes are on the Fed's next policy meeting this week, with some predicting further measures to boost the economy -- possibly negative interest rates -- that could put more pressure on the dollar and send bullion above $2,000.

There are also concerns that a worse-than-forecast reading on second-quarter US gross domestic product could spark another dollar sell-off.

While the weak dollar has been a key catalyst for the metal's advance, gold has also been boosted by its attractiveness as a haven in times of turmoil with China-US relations souring by the day.

"Strong gains are inevitable as we enter a period much like the post-global financial crisis environment, where gold prices soared to record levels as a result of copious amounts of Fed money being pumped into the financial system," said Gavin Wendt, senior resource analyst at MineLife.

The greenback was down against most other currencies, with the euro at its highest since September 2018, while higher-yielding units such as the South Korean won and Indonesian rupiah were also up.

US stimulus struggle

Stock markets were mixed as investors fret over the impact of the virus on the economy.

Hong Kong, Tokyo, Singapore, Mumbai and Wellington were all in the red, while Shanghai, Sydney, Seoul and Jakarta were higher.

The tech-rich Taipei market ended at a record high thanks to a 10 percent surge in heavyweight Taiwan Semiconductor Manufactuirng Company, which has been riding a rally in the sector thanks to people working from home during the virus.

London, Paris opened with losses, but Frankfurt was up.

Investors are growing concerned about slow progress on a new US stimulus programme, with Republicans still to present proposals worth around $1 trillion, which is less than a third of the plan set out by Democrats.

There are concerns an agreement could take some time, hitting millions of Americans whose much-needed extra unemployment benefits are about to come to an end.

Meanwhile, Hong Kong's stock market launched a new index Monday tracking China's tech giants. The Hang Seng Tech Index tracks the top 30 tech firms listed in the city, including Alibaba, JD.com, Tencent, Xiaomi and Meituan Dianping.

Hong Kong has become an increasingly attractive place for Chinese tech companies to list, especially as they face greater scrutiny and restrictions in the United States.

Agence France-Presse

New US jobless claims rise to 1.42 million amid COVID-19 surge

WASHINGTON - Claims for government benefits by newly unemployed American workers rose to 1.42 million last week, the Labor Department said Thursday, reversing weeks of declines as coronavirus cases skyrocket nationwide.

The increase defied analysts' expectations of another weekly decrease in new claims, which spiked in March as US businesses shut down to stop the spread of coronavirus put have been dropping since.

Adding to the toll were the 974,999 people in 49 states who applied for benefits under a program for workers who would not normally be eligible -- an increase of nearly 20,000 from the week prior.

However, in the week ended July 11, the insured unemployment rate indicating people actually receiving benefits declined 0.7 points to 11.1 percent, an indication that some people are returning to work.

"The overall message is that an economy able to recover well is stalling due to health concerns," chief economic advisor at Allianz Mohamed A. El-Erian said on Twitter.

The world's largest economy has seen a surge in COVID-19 infections as states roll back reopening measures, with nearly 64,000 new cases reported in the 24 hours to Wednesday, Johns Hopkins University said.

Some of the states seeing the biggest jumps in joblessness were also among those with the highest number of coronavirus cases, including Florida, where claims jumped 65,890 in the week ended July 11, the Labor Department said.

Agence France-Presse

Simpler. Cheaper. Safer? Tokyo 2020's unanswered questions

TOKYO -- The year-long postponement of the Tokyo 2020 Olympics due to coronavirus has presented organisers with unprecedented challenges and questions over costs, sponsorship and safety.

With one year to go, many of these questions remain unanswered, with surveys suggesting Tokyo residents are beginning to cool on the idea of hosting the Games during a global pandemic.

- What will a post-COVID Games look like? -

In a word, "simpler" -- the new buzzword for Olympic officials.

Tokyo 2020 chief Yoshiro Mori put it best when he said the Olympics "used to be conducted in an extravagant, grand, splendour. But the point is that in the face of COVID, would that kind of Games be accepted?"

With millions around the world losing jobs and the global economy facing the worst downturn since the Great Depression, officials are at pains to dial down the razzmatazz.

"We are looking, together with our Japanese partners and friends, on ways to simplify the organisation of the Games, how we can reduce the complexity of the Games, how we can save costs for these postponed Games," International Olympic Committee boss Thomas Bach told AFP in an interview last month.

But exactly how remains unclear. Tokyo 2020 has said there are 200 possible cost-cutting measures under discussion, without revealing examples.

Plans said to be on the table include cutting the number of spectators and reducing participation in the opening and closing ceremonies.

- How much will it cost? -

Again, we don't really know.

According to the latest budget, the Games were due to cost $12.6 billion, shared between the organising committee, the government of Japan and Tokyo city.

But the postponement has thrown up a plethora of new costs -- from re-booking venues and transport to retaining a huge organising committee staff for an extra year.

The IOC has already set aside $800 million to help organisers and sports federations meet the extra costs of a postponed Olympics, $650 million of which is earmarked for the Games.

Tokyo 2020 officials have remained tight-lipped about additional costs, saying they need to finalise the organisational side of things before working out the bill.

- What are the main headaches? -

Almost every aspect of the Olympic Games, after seven years of preparation, needs to be unpicked and started again. Let's take two of the major problems: sponsorship and venues.

Just before the year-to-go landmark, Tokyo 2020 said it had secured 100 percent of the venues for next year, leaving the competition schedule broadly unchanged.

But it remains unclear how much rearranging the venues will cost -- including buying out organisations that had reserved them for 2021.

Another major problem is the athletes' village, with many units already sold off as luxury bayside apartments.

The postponement and continued uncertainty surrounding the Games is also making sponsors jittery, with doubts over the $3.3 billion they were expected to stump up -- more than half Tokyo's revenue.

A poll published last month by Japanese public broadcaster NHK suggested 65 percent of sponsors had not decided whether to extend their financial backing for another year.

- Will they even happen? -

Senior officials from Prime Minister Shinzo Abe downwards have conceded a second postponement would be virtually impossible and that if the Games are not held next year, they would have to be scrapped.

Bach said he understood Japan's view that 2021 was the "last option" for the Tokyo Games, stressing postponement cannot go on forever.

Even the biggest optimists admit no one can be certain the coronavirus situation will allow the Games to happen.

"To be honest with you I don't think the Olympics is likely to be held next year," said Kentaro Iwata, a professor of infectious diseases at Kobe University.

"Japan might be able to control this disease by next summer, I wish we could, but I don't think that will happen everywhere on Earth, so in this regard I'm very pessimistic," he said.

- Will it be safe? -

Tokyo governor Yuriko Koike told AFP last month that she would be making a "120 percent" effort to ensure the safety of everyone attending the Games, but this is no easy task.

Organisers have vowed to look at coronavirus countermeasures "from this autumn forward" but the scale of the challenge was encapsulated by John Coates, a top IOC official in charge of working with the Tokyo 2020 team.

"Do we quarantine the Olympic village? Do all athletes when they get there go into quarantine? Do we restrict having spectators at the venues? Do we separate the athletes from the mixed zone where the media are?"

"We've got real problems because we've got athletes having to come from 206 different nations," said Coates.

"There's a lot of people."

Agence France-Presse

LinkedIn to cut 960 jobs amid sales slump

WASHINGTON - Professional social network LinkedIn said Tuesday it was cutting 960 jobs, or six percent of its workforce, as the global pandemic has hit demand for its paid recruitment services.

The COVID-19 outbreak "is having a sustained impact on the demand for hiring," said Ryan Roslansky, chief executive of the Microsoft-owned platform.

As a result, "there are roles that are no longer needed as we adjust to the reduced demand in our internal hiring and for our talent products globally."

The move comes amid surging joblessness during the pandemic-induced economic slump, even though many technology firms have weathered the crisis and even boosted employment.

LinkedIn said it added new features to help job seekers and businesses during the pandemic, and made recruitment tools free for those fighting the pandemic.

It also pledged to help 25 million people worldwide acquire new skills.

But LinkedIn's Talent Solutions business, aimed at helping companies recruit, "continues to be impacted as fewer companies, including ours, need to hire at the same volume they did previously."

LinkedIn will offer a minimum of 10 weeks severance pay and other benefits fot employees being laid off, and assistance in finding new jobs. 

Agence France-Presse

World facing bankruptcy time bomb: study

PARIS - Governments around the world are scrambling to save companies battered by coronavirus lockdowns but the world is nevertheless facing a massive surge in bankruptcies by a third, a study conducted by a trade insurance firm said Monday.

"COVID-19 is creating an insolvency time bomb," said the report by Euler Hermes, predicting a 35-percent cumulative jump in the number of companies that go bust between 2019 and 2021.

The firm, which provides insurance for trade deals, said this would be a record for its global insolvency index -- and that about half of the countries worldwide would be setting new highs since the 2009 financial crisis.

The biggest increase among the world's economic powerhouses will be in the United States, with a 57 percent jump in insolvencies in 2021 compared to 2019, before the coronavirus struck.

Bankruptcies are expected to soar by 45 percent in Brazil, 43 percent in Britain, and 41 percent in Spain.

China is forecast to see a 20 percent surge in bankruptcies.

In the United States, "the rapid spread of the virus is amplifying the trough in activity and generating a liquidity crisis for a larger set of companies", said the report.

"We do not expect the U-shaped recovery in the US to be sufficient to offset all the legacies of the crisis on financial metrics, nor to prevent the rise in insolvencies from continuing into 2021," it added.

The insolvencies are disruptive as other firms are left unpaid or forced to scramble to find new, often more expensive suppliers.

"The larger the company filing for bankruptcy, the higher the risk of a domino effect," said the report.

Euler Hermes also warned of two scenarios in which bankruptcies could jump even higher.

A premature withdrawal of supportive economic and policy measures could push the rise in insolvencies to 40-45 percent.

"And if the global economic recovery takes longer than expected, the surge" in insolvencies could rise to as high as 85 to 95 percent, it added.

Agence France-Presse

Facing a crisis, New York hopes to reinvent itself again

NEW YORK -- People fleeing town, widespread joblessness, a rising crime rate: the coronavirus pandemic has plunged New York into crisis, deeply concerning for many, but for others a chance for this famously dynamic city to reinvent itself.

"We may be going through one of the most painful and exceptional moments in our history," Mayor Bill de Blasio said Friday. "We may be going through profound social dislocation." 

The epidemic has claimed more than 23,000 lives in America's economic capital, making it the hardest-hit Western metropolis. 

Despite a sharp drop in the number of cases since May, the city has limited its reopening amid fears that a surge of infections felling southern and western states could strike New York.

With tourism evaporating, office towers nearly deserted, many stores shuttered, unemployment at 20 percent, and city services trimmed: this metropolis of 8.5 million people, synonymous with crowds and consumerism, has become a muted version of its former self.

For the reopening of schools in September, city officials are planning on a maximum of three days of in-class time a week, frustrating parents desperate to return to normal work schedules. 

And the crime rate, in decline since the mid-1990s, is surging: police have tallied 634 shootings and 203 murders since January, respective rises of 60 percent and 23 percent from the same 2019 period.

Against that background, many New Yorkers have fled the city, leaving thousands of vacant apartments behind. Manhattan real estate rental prices declined slightly in this year's second quarter for the first time in 10 years, according to the StreetEasy real estate website. 

- 'A perfect storm' -

"This is a perfect storm, in some ways, of bad events," said Kenneth Jackson, a Columbia University professor who specializes in the city's history. 

For Jackson, who left Manhattan for the countryside as the pandemic struck, today's situation is reminiscent of the dark period in the 1970s and 1980s when New York, facing financial bankruptcy, was ravaged by crime and an exodus to the suburbs. 

But like many New Yorkers, Jackson tries to keep matters in perspective. New York, after all, survived the cholera epidemics of the 19th century and the terror attacks of September 11, 2001, after which some predicted that people would no longer want "to work in a tall building."

And people are not fleeing urban hubs as they were in the 1970s. 

"There's been a rebirth of central cities," Jackson said, as US crime rates have fallen sharply and the quality of urban life has improved, with more personal, professional and entertainment opportunities.

- 'Adjusting to the realities' -

Thirty-year-old Kyle Scott, an online real estate specialist, agreed. 

He and his wife, a pediatrician, had left New York two years ago for a pleasant suburb, before growing disillusioned. 

While in the suburbs "there's so much more space, you have such a better family life and much better sort of quality of living," he said, "you don't have the same benefits that the city has to offer."

Now back in New York, and parents of a seven-month-old baby, they plan to stay in the city that "always reinvents itself" -- hoping a decline in real estate prices will allow them to own their first apartment.

Eva Kassen-Noor, an urban planning professor at Michigan State University, believes New York "will adjust to the realities that the epidemic is here."

Already, certain changes which environmentalists once thought unattainable have become reality: the number of cyclists, already on the rise in New York for years, has exploded. More than 100 miles (160 kilometers) of roads have been, or will soon be, closed to cars. 

Meanwhile, nearly 9,000 restaurants opened outdoor terraces in recent weeks, after city authorities streamlined the approval process to help compensate for the loss of indoor dining.

Scott Ellard, who owns the well-known 55 Bar jazz club in Greenwich Village, is currently negotiating to have his street converted to a pedestrian zone. He hopes to use the outdoor space for the club's reopening after a painful four-month closure. 

"We are doing whatever we can," he said. "Who the hell wants to close?" 

"You spend time building a reputation for a place; it would be a shame to let all that history go."

Jackson, the Columbia University professor, said he is sure the city will come back and will gladly return to his Upper East Side apartment.

"No later than the summer of 2021," he said, "...there will be clear signs that the city is recovering."

Agence France-Presse

Muji's US unit files for bankruptcy due to COVID-19 pandemic

TOKYO - Ryohin Keikaku Co., the operator of the Muji-brand goods store chain, said Friday its US unit filed for bankruptcy protection after the coronavirus pandemic caused store closures and hit sales hard.

Total liabilities left by the subsidiary Muji USA Ltd. were $64 million, the Tokyo-based company said.

The Japanese retailer, which entered the US market in 2006, said the subsidiary suspended operations at all of its 18 outlets across the United States in March due to the outbreak.

The subsidiary is considering closing some unprofitable stores but plans to continue business in the United States while proceeding with restructuring efforts, the parent said.

It also said the filing for Chapter 11 bankruptcy protection by the subsidiary will not affect the bottom line of Ryohin Keikaku, which has already written down the value of its shareholdings in the U.S. arm to zero.

Also Friday, Ryohin Keikaku reported a group net loss of 4.12 billion yen ($38.6 million) for the first quarter through May, a turnaround from the 6.59 billion yen in profit a year earlier. Sales dropped 29.9 percent to 78.75 billion yen.

The company recently changed its settlement period from the end of February to the end of August. Still in transition, its current fiscal period ends in six months.

kyodo News