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Grifols SA, a Spanish pharmaceutical company, is expected to announce an accounting adjustment related to its stake in Shanghai RAAS. The adjustment, discovered by Grifols' new auditor Deloitte, involves a €400 million overvaluation of an asset owned by the Chinese firm. This discrepancy will not impact Grifols' profit and loss statement. Grifols has faced scrutiny since January when it was accused of manipulating its debt and earnings, leading to changes in management and a commitment to improve financial reporting. Grifols' second-quarter earnings will be reported on Tuesday. [Extracted from the article]

The South African Reserve Bank (SARB) will soon complete the transfer of 100 billion rand ($5.5 billion) of profits from the nation's gold and foreign-exchange reserves to the Treasury, according to Governor Lesetja Kganyago. This transfer is part of a plan announced by Finance Minister Enoch Godongwana to restructure reserves held at the central bank in order to reduce debt issuance. The country's Gold and Foreign Exchange Contingency Reserve Account (GFECRA) has shown significant paper profits, and the remaining funds will be used to protect against potential losses. [Extracted from the article]

According to Brad Setser, a senior fellow at the Council on Foreign Relations, the Japanese government stands to make significant profits if they intervened in currency markets by selling dollars and buying yen. This is because Japan holds a large amount of foreign currency-denominated assets that were purchased when the yen was stronger. Setser explains that the Japanese authorities followed a basic investment strategy of buying low and selling high. It is believed that Japan conducted its first currency intervention since 2022 to support the yen, and it is estimated that they spent around $35 billion on this intervention. [Extracted from the article]

Hong Kong's ZA Bank is in discussions with potential stablecoin issuers to provide accounts for the cash reserves that would back the tokens. The bank is in contact with five to eight corporate clients interested in creating stablecoins and would offer them fiat reserve accounts once they are admitted to the Hong Kong Monetary Authority regulatory sandbox. ZA Bank aims to explore the various use cases for stablecoins and is considering custodying virtual assets, including stablecoins. The bank has already facilitated over $1 billion in transfers from Web3 clients and plans to break even this year. [Extracted from the article]

New York Community Bancorp has stated that its disclosure of "material weaknesses" in risk tracking will not require additional reserves for future loan losses. The company's new CEO, Alessandro DiNello, expressed confidence in the company's liquidity and deposit base, and stated that the allowance for credit losses has already considered these weaknesses. The bank has also appointed George F. Buchanan as chief risk officer and Colleen McCullum as chief audit executive, both of whom have extensive experience in the financial services industry. [Extracted from the article]

South Africa's decision to tap into its gold and foreign-exchange reserves to reduce debt levels may have negative consequences for the independence of the central bank, according to S&P Global Ratings. The country's Finance Minister plans to restructure a contingency account held at the South African Reserve Bank to free up $7.8 billion and alleviate borrowing costs. S&P warns that this move could politicize the central bank and prioritize fiscal needs over monetary and economic stability. The central bank has previously faced challenges in maintaining its independence, with calls to expand its mandate beyond price stability. [Extracted from the article]

The National Treasury of South Africa has announced a reduction in the country's borrowing requirement by drawing down from the Gold and Foreign Exchange Contingency Reserve Account. The drawdown will be implemented in three tranches, with 100 billion rand in the 2024-25 fiscal year and 25 billion rand in each of the subsequent two years. The borrowing requirement for the 2024-25 fiscal year is now 457.7 billion rand, down from the previous estimate of 559.6 billion rand. The government also plans to raise funds from international institutions to support its developmental objectives, including the Just Energy Transition Investment Plan. The budget deficit is forecasted to be lower in the next three fiscal years compared to previous estimates, and debt-service costs are expected to increase. [Extracted from the article]

The South African government is considering accessing billions of dollars in paper profits from its reserves to fund its budget deficit and manage its debt. This would involve selling part or all of the underlying assets, which could potentially unsettle investors. The government has not made a final decision on how much it wants to access, but it is considering withdrawing up to half of the 497 billion rand ($26 billion) in the reserve account. The mechanics of accessing the funds are crucial, as it could have positive or negative effects depending on how it is done. The Treasury and central bank have been discussing the best way to utilize the funds, and international experts have been engaged to advise them. Other countries, such as Switzerland, Chile, and Poland, periodically transfer gains from valuation adjustments to their governments, but the frequency and mechanism of these transfers vary. [Extracted from the article]

Adani Green Energy Limited has announced its plan to redeem $750 million worth of 4.375% notes due in September 2024. The company intends to use cash balances from reserve accounts, as well as funds from a joint venture consideration and a promoter preferential allotment, to fully redeem the outstanding notes eight months before maturity. This redemption plan aligns with AGEL's goal of deleveraging and improving its net leverage. AGEL aims to achieve 45GW of capacity by 2030, while the Adani Group plans to invest Rs7 trillion over the next decade. [Extracted from the article]

South African Finance Minister Enoch Godongwana stated that there are no immediate plans to tap into a 497 billion-rand ($26.5 billion) contingency fund held by the central bank. The fund, overseen by the South African Reserve Bank, contains unrealized profits or losses on reserves due to exchange-rate fluctuations. While the Treasury has considered using the fund to cut debt or fund state expenses, there are concerns about the impact on foreign investors and the financial soundness of the Reserve Bank. The finance minister will present the annual budget next month, with pressure to increase social spending and support struggling state companies ahead of national elections. [Extracted from the article]

Adani Green Energy, a solar-energy unit of the Adani Group, has provided more details on how it plans to repay a $750 million bond due in September. The company will use $281 million from the sale of preferential shares to the founding family, $300 million from a joint-venture deal with TotalEnergies SE, and $169 million from various sources including a debt service reserve account. The announcement caused the value of the Adani Green note to increase. Adani Group's finances have been under scrutiny since being accused of fraud by US short seller Hindenburg Research, although the company has denied the allegations. [Extracted from the article]

Phoenix Aviation Capital has completed its first structured Enhanced Equipment Trust Certificate (EETC) financing, known as Phoenix Aviation Capital Series 2024-1 EETC (PAC 2024-1). The transaction is worth $242 million and will be used to finance a portfolio of seven new Boeing 737 Max 8 aircraft. The portfolio has an average age of one year and a remaining lease term of 10 years. The transaction includes two tranches of notes, with ratings of A+ and BBB, and features additional protections for investors. AIP will act as the servicer for the transaction, and Citigroup Global Markets and RBC are the placement agents. AIP manages a portfolio of 16 Max 8s on behalf of Phoenix, including aircraft leased to Flair Airlines, Eastar Jet, and LOT Polish Airlines. [Extracted from the article]

Kroll Bond Rating Agency (KBRA) has downgraded the ratings on two securities issued by Horizon 2019-1, an aviation asset-backed security (ABS) transaction serviced by BBAM. The downgrades were due to a decrease in debt service coverage ratio (DSCR) and income, as well as an increase in loan to value. The ABS is collateralized against 19 assets, including narrowbody aircraft and an engine, leased by 16 different lessees. The transaction experienced performance degradation following the pandemic, leading to a breach in the DSCR trigger. [Extracted from the article]

Numisma, a Connecticut-chartered uninsured bank, was granted a Federal Reserve master account last week — the first bank with a novel charter to do so since the Fed issued its master account guidelines in 2022. Whether others can do the same is an open question. [ABSTRACT FROM AUTHOR]

The state's comptroller of public accounts is one of several notable non-depositories with access to the Fed's payments system, along with the Chicago Mercantile Exchange and the Tennessee Valley Authority. So why do they have accounts while some neobanks don't? [ABSTRACT FROM AUTHOR]

The Narrow Bank — a pass-through bank that first applied for a Federal Reserve master account in 2017 — is appealing an "ill-founded" December decision by the Federal Reserve to deny its application for a master account. [ABSTRACT FROM AUTHOR]

The article discusses the challenging financial situation faced by businesses in the hospitality sector, highlighting that a quarter of businesses have no cash reserves left, and less than a third have less than three months' worth of reserves. Rising costs, including food and drink costs, wages, and energy costs, have contributed to this situation. The majority of businesses are pessimistic about their prospects for the next 12 months.

The carrier believes its existing reserves account for any liability relating to claims. [ABSTRACT FROM AUTHOR]