Because of that complexity, the corporate minimum tax has faced substantial skepticism. It is less efficient than simply eliminating deductions or raising the corporate tax rate and could open the door for companies to find new ways to make their income appear lower to reduce their tax bills.

Similar versions of the idea have been floated by Mr. Biden during his presidential campaign and by Senator Elizabeth Warren, Democrat of Massachusetts. They have been promoted as a way to restore fairness to a tax system that has allowed major corporations to dramatically lower their tax bills through deductions and other accounting measures.

According to an early estimate from the nonpartisan Joint Committee on Taxation, the tax would most likely apply to about 150 companies annually, and the bulk of them would be manufacturers. That spurred an outcry from manufacturing companies and Republicans, who have been opposed to any policies that scale back the tax cuts that they enacted five years ago.

Although many Democrats acknowledge that the corporate minimum tax was not their first choice of tax hikes, they have embraced it as a political winner. Senator Ron Wyden of Oregon, the chairman of the Senate Finance Committee, shared Joint Committee on Taxation data on Thursday indicating that in 2019, about 100 to 125 corporations reported financial statement income greater than $1 billion, yet their effective tax rates were lower than 5 percent. The average income reported on financial statements to shareholders was nearly $9 billion, but they paid an average effective tax rate of just 1.1 percent.

“Companies are paying rock-bottom rates while reporting record profits to their shareholders,” Mr. Wyden said.

told the Senate Finance Committee last year. “This behavioral response poses serious risks for financial accounting and the capital markets.”

Other opponents of the new tax have expressed concerns that it would give more control over the U.S. tax base to the Financial Accounting Standards Board, an independent organization that sets accounting rules.

“The potential politicization of the F.A.S.B. will likely lead to lower-quality financial accounting standards and lower-quality financial accounting earnings,” Ms. Hanlon and Jeffrey L. Hoopes, a University of North Carolina professor, wrote in a letter to members of Congress last year that was signed by more than 260 accounting academics.

the chief economist of the manufacturing association. “Arizona’s manufacturing voters are clearly saying that this tax will hurt our economy.”

Ms. Sinema has expressed opposition to increasing tax rates and had reservations about a proposal to scale back the special tax treatment that hedge fund managers and private equity executives receive for “carried interest.” Democrats scrapped the proposal at her urging.

When an earlier version of a corporate minimum tax was proposed last October, Ms. Sinema issued an approving statement.

“This proposal represents a common sense step toward ensuring that highly profitable corporations — which sometimes can avoid the current corporate tax rate — pay a reasonable minimum corporate tax on their profits, just as everyday Arizonans and Arizona small businesses do,” she said. In announcing that she would back an amended version of the climate and tax bill on Thursday, Ms. Sinema noted that it would “protect advanced manufacturing.”

That won plaudits from business groups on Friday.

“Taxing capital expenditures — investments in new buildings, factories, equipment, etc. — is one of the most economically destructive ways you can raise taxes,” Neil Bradley, chief policy officer of the U.S. Chamber of Commerce, said in a statement. He added, “While we look forward to reviewing the new proposed bill, Senator Sinema deserves credit for recognizing this and fighting for changes.”

Emily Cochrane contributed reporting.

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Biden Administration’s Bid to Cap Russia Oil Prices Faces Resistance

WASHINGTON — The Biden administration’s push to form an international buyers’ cartel to cap the price of Russian oil is facing resistance amid private sector concerns that it cannot be reliably enforced, posing a challenge for the U.S.-led effort to drain President Vladimir V. Putin’s war chest and stabilize global energy prices.

The price cap has been a top priority of Treasury Secretary Janet L. Yellen, who has been trying to head off another spike in global oil costs at the end of the year. The Biden administration fears that the combination of a European Union embargo on Russian oil imports and a ban on the insurance and financing of Russian oil shipments will send prices soaring by taking millions of barrels of that oil off the market.

But the untested concept has drawn skepticism from energy experts and, in particular, the maritime insurance sector, which facilitates global oil shipments and is key to making the proposal work. Under the plan, it would be legal for them to grant insurance for oil cargo only if it was being sold at or below a certain price.

Mike Salthouse, global claims director at The North of England P&I Association Limited, a leading global marine insurer. “If you have sophisticated state actors wanting to deceive people, it’s very easy to do.”

He added: “We’ve said it won’t work. We’ve explained to everybody why.”

That has not deterred Ms. Yellen and her top aides, who have been crisscrossing the globe to make their case with international counterparts, banks and insurers that an oil price cap can — and must — work at a moment of rapid inflation and the risk of recession.

“At a time of global anxiety over high prices, a price cap on Russian oil is one of the most powerful tools we have to address inflation by preventing future spikes in energy costs,” Ms. Yellen said in July.

The Biden administration is trying to mitigate fallout from sanctions adopted by the European Union in June, which would ban imports of Russian oil and the financing and insuring of Russian oil exports by year’s end. Britain was expected to enact a similar ban but has not yet done so.

not solve the world’s oil supply problems. European officials, who have been skeptical, continue to say they are analyzing its viability.

restricted natural gas flows to parts of Europe in retaliation for sanctions, would curb oil exports because of their importance to its economy.

senior fellow at the Atlantic Council who works in the financial services industry, said of Russia’s cooperation with a price cap. “If that were the case, he wouldn’t have invaded Ukraine in the first place.”

But proponents believe that if the European Union bans insurance transactions, an oil price cap may be the best chance to mitigate the economic fallout.

John E. Smith, former director of the foreign assets control unit, said the key was ensuring that financial services firms and maritime insurers were not responsible for vetting every oil transaction, as well as providing guidance on complying with the sanctions.

“The question is will enough jurisdictions agree on the details to move this forward,” said Mr. Smith, who is now co-head of Morrison & Foerster’s national security practice. “If they do, it could be a win for everyone but Russia.”

Matina Stevis-Gridneff contributed reporting from Brussels.

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Emerson Marks ENERGY STAR® Award with Smart Thermostat Promotion to Ameren Missouri Customers

ST. LOUIS–(BUSINESS WIRE)–In celebration of Emerson’s Sensi™ smart thermostat being named the first smart thermostat to receive the ENERGY STAR Partner of the Year – Sustained Excellence Award, St. Louis companies Emerson and Ameren Missouri are teaming up to offer consumers special, energy-saving technology.

Through this latest collaboration, Ameren Missouri customers can receive an energy savings bundle that includes both a Sensi smart thermostat and an Emporia smart plug for only $1 plus required sales tax.

“Sensi is the first thermostat to win this recognition from ENERGY STAR, and we’re proud to partner with Ameren Missouri to ensure customers across the state can benefit from this smart, sustainable technology at very little cost,” said Jamie Froedge, executive president of Emerson’s Commercial & Residential Solutions business. “We’re proud to help consumers use energy more efficiently while saving money and having even greater control over their personal comfort, no matter the temperature outside.”

Emerson’s Sensi smart thermostat helps customers save money and reduce their carbon footprint by heating and cooling homes more efficiently through features like flexible scheduling, remote access via the mobile app and geofencing to help automatically adjust their temperature when they’re away. The Sensi smart thermostat does not require a common wire, is easy to install and integrates with all major smart home platforms including Amazon Alexa, Google Assistant, Apple HomeKit and SmartThings.

“More and more customers are looking to smart thermostats as a way to conserve energy and save money on their bill,” said Tony Lozano, director of energy solutions Ameren Missouri. “We’re proud to partner with companies like Emerson that are committed to sustainability and reducing carbon emissions, and we’re excited to help our customers get an easy-to-install Sensi smart thermostat at such a reduced cost.”

The Sensi thermostat giveaway is just one component of Ameren Missouri’s residential energy efficiency program. Customers also have the power to save on heat pump water heaters, HVAC systems and other products that use less energy. Find more ways to save at AmerenMissouriSavings.com.

To request a Sensi smart thermostat, visit AmerenMissouri.com/Sensi. To learn more about Emerson’s Sensi smart thermostats, visit Sensi.Emerson.com or connect with Sensi thermostat on Facebook or Twitter.

About Emerson

Emerson (NYSE: EMR), headquartered in St. Louis, Missouri (USA), is a global technology and software company providing innovative solutions for customers in industrial, commercial and residential markets. Our Automation Solutions business helps process, hybrid and discrete manufacturers maximize production, protect personnel and the environment while optimizing their energy and operating costs. Our Commercial & Residential Solutions business helps ensure human comfort and health, protect food quality and safety, advance energy efficiency and create sustainable infrastructure. For more information visit Emerson.com.

About Ameren Missouri

Ameren Missouri has been providing electric and gas service for more than 100 years, and the company’s electric rates are among the lowest in the nation. Ameren Missouri’s mission is to power the quality of life for its 1.2 million electric and 132,000 natural gas customers in central and eastern Missouri. The company’s service area covers 64 counties and more than 500 communities, including the greater St. Louis area. For more information, visit Ameren.com/Missouri or follow us on Twitter at @AmerenMissouri or Facebook.com/AmerenMissouri.

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As Latin America Shifts Left, Leaders Face a Bleak Reality.

BOGOTÁ, Colombia — In Chile, a tattooed former student activist won the presidency with a pledge to oversee the most profound transformation of Chilean society in decades, widening the social safety net and shifting the tax burden to the wealthy.

In Peru, the son of poor farmers was propelled to victory on a vow to prioritize struggling families, feed the hungry and correct longstanding disparities in access to health care and education.

In Colombia, a former rebel and longtime legislator was elected the country’s first leftist president, promising to champion the rights of Indigenous, Black and poor Colombians, while building an economy that works for everyone.

election of Andrés Manuel López Obrador in Mexico and could culminate with a victory later this year by a leftist candidate in Brazil, leaving the region’s six largest economies run by leaders elected on leftist platforms.

A combination of forces have thrust this new group into power, including an anti-incumbent fervor driven by anger over chronic poverty and inequality, which have only been exacerbated by the pandemic and have deepened frustration among voters who have taken out their indignation on establishment candidates.

sliding backward, and instead of a boom, governments face pandemic-battered budgets, galloping inflation fed by the war in Ukraine, rising migration and increasingly dire economic and social consequences of climate change.

In Argentina, where the leftist Alberto Fernández took the reins from a right-wing president in late 2019, protesters have taken to the streets amid rising prices. Even larger protests erupted recently in Ecuador, threatening the government of one of the region’s few newly elected right-wing presidents, Guillermo Lasso.

“I don’t want to be apocalyptic about it,” said Cynthia Arnson, a distinguished fellow at the Woodrow Wilson International Center for Scholars. “But there are times when you look at this that it feels like the perfect storm, the number of things hitting the region at once.”

Chile and Colombia, have shown people the power of the streets.

five of the six largest economies in the region will be run by leaders who campaigned from the left.

focused on austerity, is reducing spending.

What does link these leaders, however, are promises for sweeping change that in many instances are running headlong into difficult and growing challenges.

have plummeted.

Ninety percent of poll respondents told the polling firm Cadem this month that they believed the country’s economy was stuck or going backward.

Like many neighbors in the region, Chile’s yearly inflation rate is the highest it’s been in more than a generation, at 11.5 percent, spurring a cost-of-living crisis.

In southern Chile, a land struggle between the Mapuche, the country’s largest Indigenous group, and the state has entered its deadliest phase in 20 years, leading Mr. Boric to reverse course on one of his campaign pledges and redeploy troops in the area.

Catalina Becerra, 37, a human resources manager from Antofagasta, in northern Chile, said that “like many people of my generation” she voted for Mr. Boric because Mr. Kast, “didn’t represent me in the slightest.”

according to the Institute of Peruvian Studies — is now subject to five criminal probes, has already faced two impeachment attempts and cycled through seven interior ministers.

40 percent of households now live on less than $100 a month, less than half of the monthly minimum wage — while inflation has hit nearly 10 percent.

Still, despite widespread financial anxiety, Mr. Petro’s actions as he prepares to assume office seem to have earned him some support.

He has made repeated calls for national consensus, met with his biggest political foe, the right-wing former president Álvaro Uribe and appointed a widely respected, relatively conservative and Yale-educated finance minister.

The moves may allow Mr. Petro to govern more successfully than say Mr. Boric, said Daniel García-Peña, a political scientist, and have calmed down some fears about how he will try to revive the economy.

But given how quickly the honeymoon period ended for others, Mr. Petro will have precious little time to start delivering relief.

“Petro must come through for his voters,” said Hernan Morantes, 30, a Petro supporter and environmental activist. “Social movements must be ready, so that when the government does not come through, or does not want to come through, we’re ready.”

Julie Turkewitz reported from Bogotá, Colombia, Mitra Taj from Lima, Peru and John Bartlett from Santiago, Chile. Genevieve Glatsky contributed reporting from Bogotá.

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Corvias Invests $92M to Improve Military Housing at Fort Polk U.S. Army Installation

FORT POLK, La.–(BUSINESS WIRE)–Corvias will deliver more than $92M worth of housing upgrades to U.S. Army military housing at Fort Polk by 2025 to continue to enhance the living experience for military families. Approximately 140 homes will undergo a complete home renovation, roughly 1,000 homes will benefit from exterior renovations and 153 homes already received geothermal heat pumps on behalf Corvias’ Polk Communities partnership with the U.S. Army.

Corvias recently completed a Phase I, $15M development plan at Fort Polk that repaired or replaced more than 2,300 roofs, painted approximately 1,000 homes and replaced nearly 1,000 gutters in the Dogwood Terrace and Maple Terrace neighborhoods. Fort Polk will benefit from an additional $77M investment by Corvias as part of Phase II of the project, which has already begun.

“The continued re-investment into our Fort Polk community remains a priority,” said Pete Sims, managing director at Corvias. “We believe that having a steady focus on investing in back-to-back development plans allows us to consistently improve the on-post housing experience and remain the top choice for housing when families receive a Permanent Change of Station to Fort Polk.”

In Phase II, 140 homes undergoing a renovation will receive updated kitchens that will feature new flooring, energy-efficient appliances, modern countertops, soft-close cabinets, under-cabinet lighting and new light fixtures. Corvias will renovate these Palmetto and Maple Terrace homes as they become available and final materials used in the renovations may vary based on availability.

The investment also includes the final 153 on-post homes that received new geothermal heat pumps, completing the 2019 effort to replace geothermal heat pumps in all Fort Polk homes. The savings from the energy-efficient geothermal heat pumps will be reinvested into Fort Polk housing for additional capital, home and roadway improvements.

The scope for this second phase of development work also includes demolishing more than 45 homes; renovating the exterior of nearly 1,000 homes, including exterior paint, trim and gutters; incorporating grading improvements to enhance drainage; and repairing carports on approximately 100 homes. These combined changes are part of the overall modernization of on-post housing.

Corvias’ 50-year partnership with Fort Polk is part of the Military Housing Privatization Initiative (MHPI), which leverages private-sector capital and expertise to reverse the military’s housing shortage. This is done by expanding and modernizing housing with predictable, stable, long-term operating costs and performance. Corvias’ partnership with Fort Polk includes the management of more than 3,600 homes, supporting an average of 732 direct annual jobs, and generating approximately $133M in total tax revenues for the state of Louisiana.

About Corvias and the Military Housing Privatization Initiative

Corvias is a partner to the U.S. Army as part of the U.S. Department of Defense Military Housing Privatization Initiative (MHPI) to revitalize, operate and maintain on-base military family housing. MHPI has enabled renovations, new construction and water and energy-saving initiatives, including the largest solar project in Kansas at the Fort Riley military housing community, which is part of Corvias’ partnership with the Army. In 2019, Corvias developed a $325 million Solutions Investment for its Department of Defense portfolio to fund strategic modernization and resiliency improvements to its U.S. Army base housing infrastructure.

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Loans Could Burn Start-Up Workers in Downturn

SAN FRANCISCO — Last year, Bolt Financial, a payments start-up, began a new program for its employees. They owned stock options in the company, some worth millions of dollars on paper, but couldn’t touch that money until Bolt sold or went public. So Bolt began providing them with loans — some reaching hundreds of thousands of dollars — against the value of their stock.

In May, Bolt laid off 200 workers. That set off a 90-day period for those who had taken out the loans to pay the money back. The company tried to help them figure out options for repayment, said a person with knowledge of the situation who spoke anonymously because the person was not authorized to speak publicly.

Bolt’s program was the most extreme example of a burgeoning ecosystem of loans for workers at privately held tech start-ups. In recent years, companies such as Quid and Secfi have sprung up to offer loans or other forms of financing to start-up employees, using the value of their private company shares as a sort of collateral. These providers estimate that start-up employees around the world hold at least $1 trillion in equity to lend against.

start-up economy now deflates, buffeted by economic uncertainty, soaring inflation and rising interest rates, Bolt’s situation serves as a warning about the precariousness of these loans. While most of them are structured to be forgiven if a start-up fails, employees could still face a tax bill because the loan forgiveness is treated as taxable income. And in situations like Bolt’s, the loans may be difficult to repay on short notice.

badly burned by loans related to their stock options.

Ted Wang, a former start-up lawyer and an investor at Cowboy Ventures, was so alarmed by the loans that he published a blog post in 2014, “Playing With Fire,” advising against them for most people. Mr. Wang said he got a fresh round of calls about the loans anytime the market overheated and always felt obligated to explain the risks.

“I’ve seen this go wrong, bad wrong,” he wrote in his blog post.

Start-up loans stem from the way workers are typically paid. As part of their compensation, most employees at privately held tech companies receive stock options. The options must eventually be exercised, or bought at a set price, to own the stock. Once someone owns the shares, he or she cannot usually cash them out until the start-up goes public or sells.

Uber and Airbnb put off initial public offerings of stock as long as they could, hitting private market valuations in the tens of billions of dollars.

That meant many of their workers were bound by “golden handcuffs,” unable to leave their jobs because their stock options had become so valuable that they could not afford to pay the taxes, based on the current market value, on exercising them. Others became tired of sitting on the options while they waited for their companies to go public.

The loans have given start-up employees cash to use in the meantime, including money to cover the costs of buying their stock options. Even so, many tech workers do not always understand the intricacies of equity compensation.

“We work with supersmart Stanford computer science A.I. graduates, but no one explains it to them,” said Oren Barzilai, chief executive of Equitybee, a site that helps start-up workers find investors for their stock.

Secfi, a provider of financing and other services, has now issued $700 million of cash financing to start-up workers since it opened in 2017. Quid has issued hundreds of millions’ worth of loans and other financing to hundreds of people since 2016. Its latest $320 million fund is backed by institutions, including Oaktree Capital Management, and it charges those who take out loans the origination fees and interest.

So far, less than 2 percent of Quid’s loans have been underwater, meaning the market value of the stock has fallen below that of the loan, said Josh Berman, a founder of the company. Secfi said that 35 percent of its loans and financing had been fully paid back, and that its loss rate was 2 to 3 percent.

congratulatory flourish on Twitter in February, writing that it showed “we simply CARE more about our employees than most.”

The company’s program was meant to help employees afford exercising their shares and cut down on taxes, he said.

Bolt declined to comment on how many laid-off employees had been affected by the loan paybacks. It offered employees the choice of giving their start-up shares back to the company to repay their loans. Business Insider reported earlier on the offer.

Mr. Breslow, who stepped down as Bolt’s chief executive in February, did not respond to a request for comment on the layoffs and loans.

In recent months, he has helped found Prysm, a provider of nonrecourse loans for start-up equity. In pitch materials sent to investors that were viewed by The New York Times, Prysm, which did not respond to a request for comment, advertised Mr. Breslow as its first customer. Borrowing against the value of his stock in Bolt, the presentation said, Mr. Breslow took a loan for $100 million.

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Prime Minister Race in Britain Remains Unsettled in Wake of Johnson’s Downfall

Not only did Ms. Mordaunt urge Britons to vote for Brexit, but she also played a minor, though memorable, part in the campaign by warning that Turkish migrants would flock to Britain when their own country joined the European Union, something she claimed Britain would be unable to block. The statement was erroneous: Britain, like other members, had a right to veto Turkey’s membership.

Brexit supporters regard her with suspicion for another reason: She voted for an ill-fated withdrawal agreement with the European Union negotiated by Prime Minister Theresa May.

Ms. Mordaunt combines an interest in security and a military background with views on social issues that are mildly progressive by Tory party standards. She has spoken up in favor of the rights of transgender people, for example, a position that has gotten her into trouble with the culture warriors on the party’s right.

Seeking to defuse the issue, Ms. Mordaunt said last week that transgender women “are not biological women like me, but the law recognizes them in their new gender and that’s very simple and straightforward.”

In the cut-and-thrust of Tory politics, of course, it is neither.

During a televised debate on Friday evening, Mr. Mordaunt came under renewed pressure on the issue, with one of her opponents, Kemi Badenoch, questioning whether she had backtracked on her earlier position. Critics said Ms. Mordaunt’s performance was wobbly and unfocused.

Analysts said the unsettled nature of the contest had made it especially vicious. Mr. Sunak, the early front-runner, has come under attack by Mr. Johnson’s allies, who view his resignation less than two weeks ago, which set the stage for the prime minister’s downfall, as a betrayal. Mr. Sunak’s tax policy as chancellor was criticized by Jacob Rees-Mogg, with whom he sat in cabinet just days ago. Mr. Rees-Mogg refused to deny reports that he had described the policy, which included tax increases, as “socialist.”

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The big default? The dozen countries in the danger zone

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LONDON, July 15 (Reuters) – Traditional debt crisis signs of crashing currencies, 1,000 basis point bond spreads and burned FX reserves point to a record number of developing nations now in trouble.

Lebanon, Sri Lanka, Russia, Suriname and Zambia are already in default, Belarus is on the brink and at least another dozen are in the danger zone as rising borrowing costs, inflation and debt all stoke fears of economic collapse.

Totting up the cost is eyewatering. Using 1,000 basis point bond spreads as a pain threshold, analysts calculate $400 billion of debt is in play. Argentina has by far the most at over $150 billion, while the next in line are Ecuador and Egypt with $40 billion-$45 billion.

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Crisis veterans hope many can still dodge default, especially if global markets calm and the IMF rows in with support, but these are the countries at risk.

ARGENTINA

The sovereign default world record holder looks likely to add to its tally. The peso now trades at a near 50% discount in the black market, reserves are critically low and bonds trade at just 20 cents in the dollar – less than half of what they were after the country’s 2020 debt restructuring.

The government doesn’t have any substantial debt to service until 2024, but it ramps up after that and concerns have crept in that powerful vice president Cristina Fernandez de Kirchner may push to renege on the International Monetary Fund. read more

Reuters Graphics

UKRAINE

Russia’s invasion means Ukraine will almost certainly have to restructure its $20 billion plus of debt, heavyweight investors such as Morgan Stanley and Amundi warn.

The crunch comes in September when $1.2 billion of bond payments are due. Aid money and reserves mean Kyiv could potentially pay. But with state-run Naftogaz this week asking for a two-year debt freeze, investors suspect the government will follow suit. read more

Ukraine bonds brace for default

TUNISIA

Africa has a cluster of countries going to the IMF but Tunisia looks one of the most at risk. read more

A near 10% budget deficit, one of the highest public sector wage bills in the world and there are concerns that securing, or a least sticking to, an IMF programme may be tough due to President Kais Saied’s push to strengthen his grip on power and the country’s powerful, incalcitrant labour union.

Tunisian bond spreads – the premium investors demand to buy the debt rather than U.S. bonds – have risen to over 2,800 basis points and along with Ukraine and El Salvador, Tunisia is on Morgan Stanley’s top three list of likely defaulters. “A deal with the International Monetary Fund becomes imperative,” Tunisia’s central bank chief Marouan Abassi has said. read more

African bonds suffering

GHANA

Furious borrowing has seen Ghana’s debt-to-GDP ratio soar to almost 85%. Its currency, the cedi, has lost nearly a quarter of its value this year and it was already spending over half of tax revenues on debt interest payments. Inflation is also getting close to 30%.

Reuters Graphics

EGYPT

Egypt has a near 95% debt-to-GDP ratio and has seen one of the biggest exoduses of international cash this year – some $11 billion according to JPMorgan.

Fund firm FIM Partners estimates Egypt has $100 billion of hard currency debt to pay over the next five years, including a meaty $3.3 billion bond in 2024.

Cairo devalued the pound 15% and asked the IMF for help in March but bond spreads are now over 1,200 basis points and credit default swaps (CDS) – an investor tool to hedge risk – price in a 55% chance it fails on a payment. read more

Francesc Balcells, CIO of EM debt at FIM Partners, estimates though that roughly half the $100 billion Egypt needs to pay by 2027 is to the IMF or bilateral, mainly in the Gulf. “Under normal conditions, Egypt should be able to pay,” Balcells said.

Egypt’s falling foreign exchange reserves

KENYA

Kenya spends roughly 30% of revenues on interest payments. Its bonds have lost almost half their value and it currently has no access to capital markets – a problem with a $2 billion dollar bond coming due in 2024.

On Kenya, Egypt, Tunisia and Ghana, Moody’s David Rogovic said: “These countries are the most vulnerable just because of the amount of debt coming due relative to reserves, and the fiscal challenges in terms of stabilising debt burdens.”

Kenya’s concerns

ETHIOPIA

Addis Ababa plans to be one of the first countries to get debt relief under the G20 Common Framework programme. Progress has been held up by the country’s ongoing civil war though in the meantime it continues to service its sole $1 billion international bond. read more

Africa’s debt problems

EL SALVADOR

Making bitcoin legal tender all but closed the door to IMF hopes. Trust has fallen to the point where an $800 million bond maturing in six months trades at a 30% discount and longer-term ones at a 70% discount.

PAKISTAN

Pakistan struck a crucial IMF deal this week. read more The breakthrough could not be more timely, with high energy import prices pushing the country to the brink of a balance of payments crisis.

Foreign currency reserves have fallen to as low as $9.8 billion, hardly enough for five weeks of imports. The Pakistani rupee has weakened to record lows. The new government needs to cut spending rapidly now as it spends 40% of its revenues on interest payments.

Countries in debt distress at record high

BELARUS

Western sanctions wrestled Russia into default last month read more and Belarus now facing the same tough treatment having stood with Moscow in the Ukraine campaign.

Belarus bonds

ECUADOR

The Latin American country only defaulted two years ago but it has been rocked back into crisis by violent protests and an attempt to oust President Guillermo Lasso. read more

It has lots of debt and with the government subsidising fuel and food JPMorgan has ratcheted up its public sector fiscal deficit forecast to 2.4% of GDP this year and 2.1% next year. Bond spreads have topped 1,500 bps.

NIGERIA

Bond spreads are just over 1,000 bps but Nigeria’s next $500 million bond payment in a year’s time should easily be covered by reserves which have been steadily improving since June. It does though spend almost 30% of government revenues paying interest on its debt.

“I think the market is overpricing a lot of these risks,” investment firm abrdn’s head of emerging market debt, Brett Diment, said.

Currency markets in 2022
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Reporting by Marc Jones; Additional Reporting by Rachel Savage in London and Rodrigo Campos in New York; Editing by Susan Fenton

Our Standards: The Thomson Reuters Trust Principles.

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Factbox: Now UK’s Boris Johnson has quit, who could replace him?

LONDON, July 13 (Reuters) – Boris Johnson is stepping down as British prime minister, with several of his Conservative lawmakers now taking part in a leadership contest to replace him. read more

There is no clear favourite and the candidates are not listed in order of likely prospects.

Eight candidates were formally nominated in the leadership contest, with two of those knocked out in the first round of voting on Wednesday. The second round of voting will take place on Thursday.

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REMAINING IN THE CONTEST:

KEMI BADENOCH

Elected to parliament for the first time in 2017, Badenoch has held junior ministerial jobs, including most recently minister for equalities, but has never served in Cabinet.

A former Conservative member of the London Assembly, she has also served as vice-chair of the Conservative Party. Badenoch, 42, supported leaving the European Union in the 2016 referendum.

SUELLA BRAVERMAN

As attorney general, Braverman, 42, was heavily criticised by lawyers after the government sought to break international law over post-Brexit trade rules in Northern Ireland.

She campaigned to leave the EU and served as a junior minister in the Brexit department under previous Prime Minister Theresa May, but resigned in protest at her proposed Brexit deal, saying it did not go far enough in breaking ties with the bloc.

PENNY MORDAUNT

The former defence secretary was sacked by Johnson when he became prime minister after she endorsed his rival, Jeremy Hunt, during the 2019 leadership contest.

Mordaunt, 49, was a passionate supporter of leaving the EU and said that she would aim to deliver the benefits of Brexit and recover from recent economic shocks such as the pandemic.

Currently a junior trade minister, Mordaunt called the COVID-19 lockdown-breaking parties in government “shameful” and has said that if she is prime minister, leadership has to change to be less about the leader.

RISHI SUNAK

Sunak announced his leadership bid with a campaign video in which he promised to confront the difficult economic backdrop with “honesty, seriousness and determination”, rather than piling the burden on future generations. read more

Sunak, 42, became finance minister in early 2020 and was praised for a COVID economic rescue package, including a costly jobs retention programme that averted mass unemployment.

But he later faced criticism for not giving enough cost-of-living support to households. Revelations this year about his wealthy wife’s non-domiciled tax status, and a fine he received for breaking COVID lockdown rules, have damaged his standing.

His tax-and-spend budget last year put Britain on course for its biggest tax burden since the 1950s, undermining his claims to favour lower taxes.

Sunak voted to leave the EU in the 2016 referendum.

LIZ TRUSS

The foreign secretary has been the darling of the Conservative Party’s grassroots and has regularly topped polls of party members carried out by the website Conservative Home.

Truss has a carefully cultivated public image and was photographed in a tank last year, echoing a famous 1986 photo of Thatcher.

She spent the first two years of Johnson’s premiership as international trade secretary and is now in charge of dealing with the EU over post-Brexit trade rules for Northern Ireland, where she has taken an increasingly tough line in negotiations.

Truss, 46, initially campaigned against Brexit but after the 2016 referendum said she had changed her mind.

TOM TUGENDHAT

The chair of parliament’s foreign affairs committee, and a former soldier who fought in Iraq and Afghanistan. However, he is relatively untested because he has never served in Cabinet.

Tugendhat, 49, has been a regular critic of Johnson and would offer his party a clean break with previous governments.

He says he is a low tax Conservative who did not support the rise in National Insurance, and has said fuel tax is “crippling” for many people.

He voted to remain in the EU.

($1 = 0.7971 pound)

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Additional reporting by Alistair Smout
Editing by Angus MacSwan, David Evans and Jonathan Oatis

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In Buffalo, New Apartments Sprout Up in Vacant Warehouses

BUFFALO — Buffalo was riding a decade-long economic turnaround when a racially motivated attack by a gunman killed 10 people in May, overshadowing the progress. While the city grieved, it also had to reckon with unflattering portrayals of the East Side, the impoverished neighborhood where the massacre took place.

Those harsh takes tell only part of the story, say residents, business owners and city officials. Now, they are determined to put the focus back on the recovery.

Major efforts to improve the East Side have been afoot for years, like new job-training facilities and the overhaul of a deserted train station. And citywide initiatives to pour billions into parks, public art projects and apartment complexes have made Buffalo a more desirable place to live, advocates say.

Those efforts may have even reversed a chronic population decline: The latest census figures show Buffalo’s population has increased for the first time in 70 years.

“The other story about Buffalo needs to be told, that investments are being made,” said Brandye Merriweather, the president of the Buffalo Urban Development Corporation, a nonprofit group that works to repurpose empty city-owned lots.

“I am very sensitive to the issues that the shooting has raised,” said Ms. Merriweather, who grew up across the street from where the shooting took place and still has family in the neighborhood.

The wave of progress began in 2012 when New York’s governor at the time, Andrew M. Cuomo, pledged $1 billion in grants and tax credits as part of a revitalization effort, and it has been fueled by a mix of taxpayer funds and private investments in the years since.

Perhaps the most visible sign of Buffalo’s changing fortunes are its new apartments, which turn up in empty warehouses, former municipal buildings and longtime parking lots converted into much-needed housing. In the last decade, 224 multifamily projects — encompassing 10,150 apartments, most of them rentals, the equivalent of about $3 billion in investment — have opened or are underway, according to the office of Mayor Byron W. Brown.

And the pace of new housing appears to be quickening: A third of the total, or 78 projects, were unveiled just in 2020 and 2021, the mayor’s office said.

Among them is Seneca One Tower, the city’s tallest building and one of Buffalo’s most prominent projects. Completed in 1972 as a home for a bank, it sat vacant in recent years. Now, the 40-story downtown spire features a variety of uses after a $100 million renovation.

Douglas Development, which bought the tower six years ago, added 115 apartments while also installing a food hall, a large gym and a craft brewery. It also raised walls around a plaza to curb Lake Erie winds.

Barbara Foy, 64, who began renting a two-bedroom apartment at Seneca One this spring with her husband, Jack, 65, said she enjoyed sleeping with her blinds cracked to enjoy the glitter of the skyline. For almost three decades, Ms. Foy worked around the corner as a social worker, though she never really stuck around at night, instead driving back to her home in the suburbs.

But revitalization has helped her see Buffalo in a whole new light. “There seems to be something going on every weekend,” Ms. Foy said, adding that she enjoyed the city’s Pride parade in June. “Buffalo has really come alive, and I’m so proud of it.”

Office leasing has been slow. About 70 percent of the spaces at Seneca One are rented, most of them to M&T Bank, which is based in Buffalo, as well as a dozen small tech firms. The vacancy rate for top office buildings downtown was 13 percent at the end of last year, according to the brokerage firm CBRE, down from 14 percent in 2020.

Residential leasing, on the other hand, has been robust. It took just nine months to rent all of the apartments at Seneca One after they hit the market in fall 2020 for up to $3,000 a month, said Greg Baker, a director of development at Douglas. Buffalo’s median rent is $800 a month, according to census figures.

Since its Seneca One purchase, Douglas has acquired about 20 properties in the region, including former hotels and hospitals that will be converted to housing.

“People are selling houses in the suburbs to move back into the city, versus when I was younger, when they would live in the suburbs and commute to the city,” said Mr. Baker, a Buffalo native.

In a spread-out city that’s sliced up by highways, improving infrastructure has been a priority, too, though efforts so far have mostly come to fruition on the West Side. For instance, a stretch of Niagara Street near a bridge to Canada that was once lined with auto dealerships now gleams with new sidewalks, streetlights and a protected bike lane. Bike shops and restaurants have revived dilapidated storefronts there, too.

Nearby, workers are about to begin a $110 million overhaul of LaSalle Park, a 77-acre waterfront green space that’s hemmed in by Interstate 190. Plans call for a wide pedestrian bridge over the highway.

Softening the rough edges of Buffalo’s commercial past is also a focus downtown, at Canalside, a neighborhood-in-progress that hugs a short remnant of the original Erie Canal. On a recent afternoon, school groups milled around signs explaining how Midwest wheat and pine once flowed through Buffalo en route to Europe. Movie nights and yoga classes take place on lawns nearby.

“Buffalo may have a ways to go, but it still has come a long way,” Stephanie Surowiec, 32, said as she sat in the sun sipping a hard cider bought from a nearby stand. A nurse who grew up in Buffalo’s suburbs, Ms. Surowiec lives in the city limits today.

If there’s a model for how Buffalo can wring new uses from its industrial hulks, it might be Larkinville, a former soap- and box-making enclave in the city that developers reinvented as a business district about a decade ago. Blocklong factories that now hold offices huddle around a plaza dotted with colorful Adirondack chairs. Wednesday night concerts are a summer staple.

Makeovers of a similar scale are fewer on the East Side, but that could soon change.

This spring, officials announced an infusion of $225 million for the neighborhood, including $185 million from the state. Among the funding is $30 million for an African American heritage corridor along Michigan Avenue and $61 million to redevelop Central Terminal, a 17-story Art Deco train station that had its last passengers in 1979.

In June, Gov. Kathy Hochul announced an investment of $50 million for the East Side to help homeowners with repairs and unpaid utility bills.

Some projects have already produced tangible results, like the redevelopment of a 35-acre portion of factory-lined Northland Avenue. Though many of the neighborhood’s properties remain derelict, one, which made machines for metalworking, was reborn in 2018 as 237,000-square-foot Northland Central, an office and educational complex. It includes the Northland Workforce Training Center, which teaches job skills to area residents.

“The impact of the place has been phenomenal,” said Derek Frank, 41, who enrolled in classes after serving an eight-year prison sentence for dealing drugs. Today, Mr. Frank is employed as an electrician, as is his son, Derek Jr., 21, who attended classes alongside his father.

“Them putting that building right here in the heart of the city makes it accessible and convenient,” he added.

But East Side redevelopment plans have sometimes hit bumps. An effort to create a cluster of hospitals called the Buffalo Niagara Medical Campus has caused gentrification. But advocates point out that the hospitals, which employ 15,000, have picked up some of the economic slack after factories shut down.

Whether spurred on by public investment or other reasons, Buffalo has seen notable growth. Its population of 278,000 in the 2020 census was up 7 percent from 261,000 in 2010.

Buffalo enjoys a steady stream of immigrants, like the family of Muhammad Z. Zaman, which immigrated from Bangladesh in 2004 in part because Buffalo was one of the few places in the United States with an Islamic grade school, Mr. Zaman said.

Today, Mr. Zaman, 31, a working artist, is one of several muralists hired to add bright designs to walls of buildings left exposed by demolitions. One of his creations, which incorporates Arabic calligraphy that translates to “our colors make us beautiful,” jazzes up the side of a structure on Broadway.

“When we first moved here, I felt like we were the only Bangladeshi family,” said Mr. Zaman, who noted that there wasn’t a single halal-style restaurant in Buffalo in the mid-2000s, versus about 20 today. “Now, people are coming here from all over the place.”

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