Banks, borrowers neglect Libor plans in coronavirus maelstrom

LONDON (Reuters) – Banks and the businesses they lend to are putting the brakes on preparations for the end of Libor, industry sources say, because they are too busy grappling with fallout from the coronavirus to deal with the complexities of interest rate benchmarks.

Global regulators have said they want to stick to the current end-2021 deadline for scrapping Libor, which is embedded in up to $340 trillion worth of financial contracts worldwide. Authorities decided to phase out the benchmark after finding some traders had manipulated it for profit.

But this timetable has put them at odds with banks which have diverted staff from Libor project teams because of the coronavirus and pared outreach initiatives to clients who were already struggling with the transition before the outbreak.

While derivatives markets are adapting to alternative benchmark rates efficiently, companies with Libor-linked debt are finding the changes more expensive and cumbersome.


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Coronavirus: Government loans not reaching businesses | Business News

Around one in three British businesses have furloughed at least 75% of their workforce due to the coronavirus crisis, according to a new survey.

The British Chamber of Commerce (BCC) found that two-thirds of businesses it spoke to said they had to put some staff on the furlough scheme, which covers 80% of salaries up to £2,500 a month.

But just 2% of the businesses questioned said they had successfully accessed the government’s Coronavirus Business Interruption Loan Scheme, and the BCC said many need cash, quickly.

It comes after the chancellor’s announcement in the Downing Street briefing on Tuesday that we are in “tough times” economically and that he “can’t protect every business and every household” throughout the pandemic.

Chancellor says ‘tough times’ are ahead

Speaking to Sky News, the BCC’s Co-Executive Director Hannah Essex said: “If businesses don’t have the money in their accounts they’re going to have to

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US airlines agree $25bn rescue deal – with strings attached | Business News

Major US passenger airlines have agreed in principle to a $25bn (£20bn) rescue package that will keep workers in their jobs until October as the industry battles the coronavirus crisis.

Washington’s treasury department said the six biggest carriers – American Airlines, United, Delta, Southwest, JetBlue and Alaska Airlines had accepted the support.

But there are strings attached – including conditions restricting shareholder dividends and executive pay, and the government being given the right to buy certain levels of stock in the companies, at a set price.

Airlines hope US passenger traffic, which has slumped by 95% due to the pandemic, will begin to recover by the autumn but have warned the travel slowdown might extend into next year.

The government support for the industry will see major carriers receive cash to pay workers, with 30% eventually paid back.

In the case of smaller carriers receiving $100m or less in

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TomTom sees negative free cash flow as virus hits first-quarter sales

FILE PHOTO: TomTom navigation are seen in front of TomTom displayed logo in this illustration taken July 28, 2017. REUTERS/Dado Ruvic/File Photo

(Reuters) – Dutch navigation and digital mapping company TomTom (TOM2.AS) said on Wednesday it expected a negative free cash flow in 2020 with lower revenues from its automotive and consumer businesses, in light of the impact from the coronavirus pandemic.

The Amsterdam-based company, which withdrew its original outlook in late March, had initially said it expected its 2020 free cash flow to be a mid to high single digit percentage of the group’s revenue. TomTom said it was unable to provide specific forecasts for the year.

“Our Automotive revenue arises principally from customer vehicle sales, which are sharply impacted by factory closures,” said TomTom’s chief executive officer, Harold Goddijn.

He added that consumer revenue would be hit by a steep decline in demand arising from retail

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