Senate passes extension of Paycheck Protection Program until August 8, hours ahead of deadline [CNN]
Tuesday's extension came as a surprise, even to Democrats who forced the action on the floor. While there had been discussions about moving the deadline, there were no substantive moves towards agreement on one until shortly before it actually reached the floor…. The bill, proposed by Senate Democrats, was passed by unanimous consent.
The Democratic-led House would still need to act on the extension.
Mnuchin, Powell Pledge Additional Relief to Prevent Lasting Damage to Economy [WSJ]
“We have a lot of important features that all come to an end in July,” Mr. Mnuchin told lawmakers at the House Financial Services Committee on Tuesday. He said the administration wanted any additional relief to be “targeted to certain industries that have been especially hard-hit by the pandemic….”
“Hypothetically, a second outbreak would force governments and people to withdraw again from economic activity,” Mr. Powell said. While stating that he wasn’t forecasting another outbreak, he said, “The worst part of it would be to undermine public confidence, which is what we need to get back to lots of kinds of economic activity that involves crowds.”
USMCA Takes Effect but North American Trade Tensions Remain [WSJ]
“Trade agreements are by definition intended to provide order and certainty to the marketplace, but the USMCA is already stirring up controversy,” said Jessica Wasserman, a partner at Greenspoon Marder LLP in the international trade practice. “The Trump administration trade negotiation approach has been to keep everyone guessing and never reach closure, so maybe it is not surprising that there is so much left unresolved.”
Hedge Fund Liquidations Surged as Pandemic Rocked Markets [II]
The number of hedge fund liquidations soared in the first three months of this year to 304, the highest since the fourth quarter of 2015, according to a Hedge Fund Research report Tuesday. As coronavirus fears shook markets, the number of newly created hedge funds sank to a near-record low in the first quarter, with total industry assets dipping below $3 trillion.
Banks Face Increasing Compliance Risks, OCC Says [WSJ]
The pandemic could create challenges for financial institutions to abide by a host of policies, procedures and requirements ranging from data privacy and fair lending to efforts to combat money laundering, the OCC said…. The OCC, like other regulatory agencies, said it recognizes that there may be delays in banks’ compliance with anti-money-laundering and sanctions requirements due to the pandemic, and that it is taking these circumstances into consideration in compliance examinations.
Virgin Atlantic Favors U.S. Hedge Fund for Rescue Cash [Bloomberg]
[Davidson Kempner Capital Management] has emerged as the favored funding provider, ahead of an alliance of Elliott Management and U.K. investment firm Greybull Capital, according to the people, who asked not to be named as talks are private.
Davidson Kempner would provide more than half the money, with Richard Branson, the airline’s 69-year-old founder and majority shareholder, committing to inject around 200 million pounds, one person said. A final decision hasn’t been taken and Centerbridge Partners, which had dropped out earlier, has been back in touch and could seek to swing a deal with a late proposal, that person said.
Wave of Corporate Failures Stays at Bay—for Now [WSJ]
The companies that have succumbed were already heavily indebted and in industries that were declining before the pandemic. The loss of revenue during the economic shutdown tipped them over the edge.
The picture for healthier companies, on the other hand, has brightened considerably over the past couple of months, thanks in large part to the Federal Reserve’s corporate-bond-buying program, which includes the debt of investment-grade companies as well as those that had investment-grade credit ratings before March 22.
Federal government runs out of free face masks; TSA also faces shortage [Yahoo! News]
In recent days, political leaders from both parties have urged Americans to wear protective coverings, which can drastically reduce the rate of viral transmission, perhaps by as much as 85 percent…. Project: America Strong was initiated by the federal government to distribute “reusable cotton face coverings to critical infrastructure sectors, companies, healthcare facilities, and faith-based and community organizations across the country to help slow the spread of COVID-19,” according to the project’s website.
The project appears to have run out of face masks in recent days.