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Cost of insuring Europe’s riskiest companies against debt defaults surges

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Cost of insuring Europe’s riskiest companies against debt defaults surges

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The cost of insuring the debt of Europe’s riskiest companies against default has soared to the highest levels in 18 months as investor alarm rises in response to Donald Trump’s tariffs.

The spread on the iTraxx Crossover index, which measures the cost to insure junk-rated companies against defaults, has surged 93 basis points to 421bp since April 2. This means it costs €421,000 a year to insure €10mn of debt over five years.

The widely followed index, which tracks the credit-default swaps of 75 companies in Europe such as carmaker Jaguar Land Rover and French telecoms group Iliad, reflects growing fears about their health.

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Fund managers said that the sharp rise in the index, used to hedge against market moves in lower-rated debt, had not translated to disorderly or large sales of junk bonds.

“The weaker structures are struggling,” said one high-yield bond investor, who added that the selling “isn’t panicked . . . it’s more of a steady repricing”.

However, higher-rated companies are coming under pressure, too. The spread of the iTraxx Europe index, which tracks 125 investment grade groups such as Heineken and UK retailer Marks and Spencer, has also risen to its highest levels in 18 months, although at a slower pace. It has risen by 20bp to 83bp since April 2.

The market for new debt issuance by riskier European companies has stalled as investors sit on the sidelines in volatile conditions.

New issuance in the space had “ground to a halt”, said one high-yield bond investor, while another credit investor said that “primary bond land is closed”.

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A number of credit investors described the €2.2bn loan deal backing Bain Capital’s acquisition of facility management company Apleona as the only live leveraged finance deal in Europe.

A group of banks running the debt deal — Citigroup, Deutsche Bank and UBS — on Wednesday had to offer higher interest rates to potential investors to compensate for the market turmoil.

The three banks began marketing the junk-rated loan deal on March 31, before US President Donald Trump unveiled steep tariffs on imports that roiled global markets.

Bain announced it had agreed to acquire Apleona from rival private equity firm PAI in February.

Fitch said on Wednesday that adding “blanket US tariffs on imports . . . will increase pressure on corporate issuers without leverage headroom”.

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The rating agency added that the impact on automotive, technology hardware and chemicals companies would be “particularly acute”.

The cost of insuring against debt defaults in Europe’s car industry soared at the beginning of this week.

The cost of insuring Volkswagen’s debt against default in the next five years rose by 30bp to 154bp — the highest level since the Covid-19 pandemic — between Friday and Monday.

European companies exposed to a potential influx of cheap Chinese goods have also been hit particularly hard as investors anticipate retaliatory measures from the world’s second-largest economy.

Spreads on the bonds of Amara NZero, a supplier of renewable products used for solar, wind and hydro power, and PVC manufacturer Kem One continued to rise on Wednesday.

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Man Charged With Posting Bomb Instructions Used in New Orleans Attack

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Man Charged With Posting Bomb Instructions Used in New Orleans Attack

Federal prosecutors have filed charges against a former Army serviceman they accused of distributing instructions on how to build explosives that were used by a man who conducted a deadly attack in New Orleans on New Year’s Day last year.

The former serviceman, Jordan A. Derrick, a 40-year-old from Missouri, was charged with one count of engaging in the business of manufacturing explosive materials without a license; one count of unlawful possession of an unregistered destructive device; and one count of distributing information relating to manufacturing explosives, according to a criminal complaint unsealed on Wednesday. The three charges together carry a maximum sentence of 40 years in federal prison.

Starting in September 2023, the authorities said, Mr. Derrick was using various social media sites to share videos of himself making explosive materials, including detonators. His videos provided step-by-step instructions, and he often engaged with viewers in comments, sometimes answering their questions about the chemistry behind the explosives.

The authorities said that Mr. Derrick’s videos were downloaded by Shamsud-Din Bahar Jabbar, 42, who was accused of ramming a pickup truck into a crowd on Bourbon Street in New Orleans on Jan. 1, 2025, in a terrorist attack that killed 14 people and injured dozens. Mr. Jabbar was killed in a shootout with the police. Before the attack, Mr. Jabbar had placed two explosives on Bourbon Street, the authorities said, but they did not detonate.

The authorities later recovered two laptops and a USB drive in a house that Mr. Jabbar had rented. The USB drive contained several videos created by Mr. Derrick that provided instructions on making explosives. The authorities said the explosives they recovered were consistent with the ones Mr. Derrick had posted about.

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Mr. Derrick’s lawyers did not respond to requests for comment.

Mr. Derrick was a combat engineer in the Army, where he provided personnel and vehicle support, the authorities said. He also helped supervise safety personnel during demolitions and various operations. He was honorably discharged in February 2013.

The authorities did not say whether Mr. Derrick had any communication with Mr. Jabbar, or whether the men had known each other. In some of Mr. Derrick’s videos and comments, he indicated that he was aware that his videos could be misused.

“There are a plethora of uh, moral, you know, entanglements with topics, any topic of teaching explosives, right?” he asked in one video, according to the affidavit. “Of course, the wrong people could get it.”

The authorities also said that an explosion occurred at a private residence in Odessa, Mo., on May 4, and the occupant of the residence told investigators that he had manufactured explosives after watching online tutorials from Mr. Derrick.

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Mr. Derrick’s YouTube account had more than 15,000 subscribers and 20 published videos, the affidavit said. He had also posted content on other platforms, including Odysee and Patreon. Some videos were accessible to the public for free, while others required a paid subscription to view.

“My responsibility to my countrymen is to make sure that I serve the function of the Second Amendment to strengthen it,” Mr. Derrick said in one of his videos, according to the affidavit. “This is how I serve my country for real.”

Outside of the income he received through content creation, Mr. Derrick did not have any known employment. He did receive a monthly disability check from Veterans Affairs, the affidavit stated.

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The Girls: “This isn’t ringing alarms to y’all?” : Embedded

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The Girls: “This isn’t ringing alarms to y’all?” : Embedded
Allegations pile up, but Child Protective Services declines to investigate and the school district continues to promote Ronnie Stoner. We include an update at the end of the episode. “The Girls” is a 4-part series from the Louisville Public Media’s investigative podcast, Dig.
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Chud the Builder, Known for Racist Confrontations, Charged With Attempted Murder

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Chud the Builder, Known for Racist Confrontations, Charged With Attempted Murder

A streamer known for hurling racist slurs in public settings under the nickname “Chud the Builder” was charged with attempted murder after a shooting outside a Tennessee courthouse on Wednesday, the authorities said.

The streamer, Dalton Eatherly, 28, was involved in a confrontation with an unidentified man that escalated to gunfire outside the Montgomery County Court in Clarksville, about 50 miles northwest of Nashville, the Montgomery County Sheriff’s Office said in a statement. Both men sustained gunshot wounds and were in stable condition, the office said.

In addition to attempted murder, Mr. Eatherly was charged with employing a firearm during dangerous felony, aggravated assault and reckless endangerment with a deadly weapon, the sheriff’s office said.

Mr. Eatherly, who is white, has accumulated an online audience by livestreaming confrontations in which he uses racist language toward Black people in public.

Law enforcement did not provide any details about the second man involved in Wednesday’s shooting. Mr. Eatherly posted an audio recording online of paramedics treating his wounds in which he claims he shot the man in self-defense.

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A video posted by the website Clarksville Now shows Mr. Eatherly on a stretcher with a microphone attached to his lapel.

Mr. Eatherly is being held at the Montgomery County Jail, pending arraignment, the sheriff’s office said.

According to court records, Mr. Eatherly was scheduled to appear for a court hearing on Wednesday morning in an unrelated case brought by Midland Credit Management, a collections agency.

A lawyer listed in court records from a separate harassment case in which Mr. Eatherly was a defendant in November did not respond to a request for comment.

On Sunday, three days before the shooting in Clarksville, Mr. Eatherly was arrested in Nashville. According to a police affidavit, Mr. Eatherly live streamed his meal at a restaurant, Bob’s Steak and Chop House, on Saturday even though the restaurant had asked him ahead of time not to do so.

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When he was confronted, Mr. Eatherly “became disruptive and started making racial statements, yelling, screaming and otherwise creating a scene,” according to the affidavit.

He then refused to pay for his $370 meal. Mr. Eatherly was charged with theft of services, disorderly conduct and resisting arrest. He was released on $5,000 bond.

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