COVID-19 Daily Update: April 2, 2020

On only its second day, April has been the cruelest month of the coronavirus pandemic, with more than 1 million cases confirmed worldwide, just 18 weeks into this crisis. Asymptomatic people, lack of access to comprehensive testing, and doubts over the validity of official totals signal that the actual number of cases may be far greater than what has been reported. In response to the outbreak, mobile advertising and tech firms have provided geolocation data to track the spread of the virus and the adoption of social distancing, raising privacy concerns.

Roughly 24% of reported cases are in the U.S., where yesterday’s toll of 920 deaths was the highest since the outbreak began. While the U.S. has become the epicenter of the outbreak, five states—North Dakota, South Dakota, Iowa, Nebraska, and Arkansas—have yet to implement any shelter-in-place orders. Legal experts say authority for enacting public-health interventions on major scales lies with state and municipal governments. Other states, like Georgia, only implemented restrictions on movement yesterday.

Governor Gavin Newsom of California, who issued the first statewide stay-at-home order, has questioned the lack of response among some of his peers. “What are you waiting for? What more evidence do you need,” he asked. “If you think it’s not going to happen to you, there are proof points all over the United States, all over the world.”

President Donald Trump said a nationwide order wouldn’t be enforced because of differing infection rates across states. The federal government’s emergency stockpile of medical supplies is depleting rapidly, and states are bidding against one another for ventilators and essential supplies.

Global unemployment is rising to levels higher than during the Global Financial Crisis, as economic forecasts on the coronavirus’ long-term effects worsen. Data today showed 6.6 million Americans filed for unemployment benefits last week, doubling the record-setting 3.3 million from the previous week. This number could have been even higher, as overwhelmed phone lines may have prevented people from filing applications. France is giving €45 billion to businesses to keep employees on payrolls, and in the past two weeks 4 million French workers have applied for such temporary unemployment benefits. Spain, already bogged down by high unemployment levels, reported over 800,000 jobless claims last week. The European Commission will provide €100 billion to the bloc’s most afflicted countries to preserve jobs.

Farmers are being hit by falling commodity prices, labor shortages, and difficulties related to planting, harvesting, and transporting crops. Europe’s lockdowns have lowered demand for basic agricultural goods and forced seasonal laborers to stay at home. In the U.S., fewer seasonal workers are moving across the border from Mexico, disrupting farmers' plans for spring planting and harvesting.

Although uncertainty prevails over the economic outcome of the crisis, the effects on vulnerable countries and communities is clear. Default looms over nations like Ecuador and Zambia. South African bonds were further downgraded to speculative-grade due to the pandemic’s effect on the nation’s economic growth. India’s extreme lockdown propelled a mass migration of civilians from cities and left thousands stranded without safe places to shelter. In New York City, disadvantaged neighborhoods in the Bronx face higher rates of infection than wealthier Manhattan’s. At the beginning of March, the International Monetary Fund announced a $50 billion emergency financing package to support sovereign borrowers.

Low-income status is linked to higher health risks, and recent research by the Chinese Centers for Disease Control and Prevention shows at-risk individuals may be 10 times as likely to contract the coronavirus.

Demand for oil remains low due to the coronavirus, but markets rallied on the hopes of a new output deal. After Saudi Arabia called for an "urgent meeting" of the OPEC alliance and other producers to negotiate today, crude prices rose 25%. This came after President Trump tweeted about a conversation with Saudi Crown Prince Mohammed bin Salman, who then called Russian President Vladimir Putin. President Trump said he expects a production cut agreement of 10 million b/d to 15 million b/d. Trump is expected to meet with U.S. oil industry leaders tomorrow to discuss steps the government can take to help the sector.

Today is Thursday, April 2, 2020, and here is essential insight on COVID-19 and the markets.

GLOBAL ECONOMY

Credit FAQ: The Ratings Process And The COVID-19 Pandemic

Who develops S&P Global Ratings' macroeconomic forecasts, and how are they used by rating analysts? How does S&P Global Ratings support coordination across sectors and regions? How else does S&P Global Ratings support analytical consistency? How is the coronavirus pandemic affecting S&P Global Ratings' surveillance? The COVID-19 pandemic is affecting virtually all businesses globally—including ours. S&P Global analysts have answered these questions, and more, about the pandemic's effect on S&P Global Ratings and how our credit analysis and surveillance are proceeding during this time.

S&P Global Ratings acknowledges a high degree of uncertainty about the rate of spread and peak of the coronavirus outbreak. Some government authorities estimate the pandemic will peak about midyear, and we are using this assumption in assessing the economic and credit implications. S&P Global Ratings believes the measures adopted to contain COVID-19 have pushed the global economy into recession. As the situation evolves, S&P Global Ratings will update our assumptions and estimates accordingly.

—Read the full FAQ from S&P Global Ratings

CHART OF THE DAY

COVID-19: Coronavirus-Related Public Rating Actions On Corporations And Sovereigns To Date

In response to investors' growing interest in the COVID-19 coronavirus and its credit effects on companies, S&P Global Ratings is publishing a regularly updated list of rating actions we have taken globally on corporations and sovereigns as well as a summary table and support charts. These are public ratings where S&P Global Ratings mentions the COVID-19 coronavirus as one factor or in combination with others.

—Read the full report from S&P Global Ratings

Global Credit Conditions: March 2020

S&P Global Ratings expects companies rated 'B-' and below will likely suffer most from rapid rating transitions, while the investment-grade segment is showing some resilience. We estimate a surge in the corporate speculative-grade default rate to above 10% in the U.S. and into the high single digits in Europe. The massive policy response from central banks and governments around the world is likely to soften the blow, particularly with regard to financial market liquidity. Credit pressure is building up on emerging markets from U.S. dollar strength, massive capital outflows, commodity price falls, and the economic and health impact of COVID-19. A severe but relatively short economic contraction (our base case) will mostly affect weaker credits or those in the most directly exposed sectors. But a prolonged recession, beyond our base case, would have broader implications.

—Read the full report from S&P Global Ratings

Global farming suffers from falling prices, labor shortages as virus spreads

Farmers are being hit by falling commodity prices, labor shortages and difficulties related to planting, harvesting and transporting crops as the virus that causes the COVID-19 illness tightens its grip around the world.

In Europe, the closure of thousands of restaurants, resorts and hotels, as well as a plunge in catered meals at now-shuttered business offices and schools, has lowered demand for basic agricultural goods. Country-wide lockdowns have forced many seasonal laborers to stay at home, depriving their families of an income and farms of a much-needed workforce. In the U.S., fewer Mexican seasonal workers are moving across the border, disrupting farms' plans for spring planting and for bringing in crops ready for harvest, such as lettuce in California, berries in South Carolina and tomatoes in Florida.

Farmers in poorer places are especially vulnerable, including those who work in aquaculture and fisheries. At greatest risk are those in parts of sub-Saharan Africa, where chronic hunger and famine are everyday concerns.

—Read the full article from S&P Global Market Intelligence

A different kind of crisis: capital not a problem for PE now unlike during GFC

Private equity as an asset class has grown substantially since the Global Financial Crisis, or GFC, and firms have broader strategies and tools available to them than ever before. Just over a decade on, the industry faces another significant challenge. In the first of a two part series, S&P Global Market Intelligence looks at how the institutionalization of the asset class, record levels of dry powder and a more flexible approach to fund management will affect how the private equity industry is impacted by the coronavirus outbreak.

—Read the full article from S&P Global Market Intelligence

Saudi Arabia calls for 'urgent meeting' of OPEC+ after Trump calls crown prince on oil prices

In a sudden change of heart after intervention by US President Donald Trump, Saudi Arabia on Thursday called for an "urgent meeting" of the OPEC+ alliance and other producers to negotiate a deal on output cuts that could stem the coronavirus-induced freefall in oil prices. In a statement carried by the official Saudi Press Agency, the kingdom said it was "seeking a fair agreement that will restore the desired balance to the oil markets" and indicated that it wanted other countries outside the OPEC+ alliance to join the talks.

Trump had earlier tweeted that he had spoken by phone with Saudi Crown Prince Mohammed bin Salman, who in turn called Russian President Vladimir Putin to heal their oil market rift. The comments sent crude prices rallying more than 20%, after US benchmark NYMEX WTI had hit an 18-year low earlier this week. But there clearly is still much talking to be done. A Saudi energy ministry spokesman did not immediately respond to a request for comment. A Kremlin spokesman denied that Putin had spoken with MBS, Russian news agency RIA Novosti reported.

—Read the full article from S&P Global Platts

Factbox: Crude rallies as Saudis call for 'urgent' OPEC+ meeting on output

Crude prices rallied 25% Thursday after Saudi Arabia called for an "urgent meeting" of the OPEC+ alliance and other producers to negotiate an output cut deal. NYMEX front-month crude settled at $25.32/b, up $5.01. The market has been glutted with crude as Saudi Arabia and Russia have yet to back off their plans to expand market share despite the drop in demand, which has tumbled as coronavirus spread has slashed consumption of transportation fuels.

The statement followed comments from US President Donald Trump, who earlier in the day tweeted that he had spoken with Saudi Crown Prince Mohammed bin Salman, who had in turn called Russian President Vladimir Putin to heal their oil market rift. Trump said he expects a production cut agreement of 10 million b/d to 15 million b/d. Trump is expected to meet with US oil industry leaders on Friday to discuss steps the government can take to help the sector.

—Read the full article from S&P Global Platts

Coronavirus highlights new logistics risk in battery supply chains

The coronavirus pandemic is uncovering new risk in the global supply chain for lithium-ion batteries as countries that are pivotal in producing lithium and other metals needed for battery manufacturing roll out restrictions in a bid to control the spread of the virus.

Benchmark Mineral Intelligence, an information provider specializing in the lithium-ion battery sector, wrote in a recent report that the coronavirus outbreak has led to a logistical slowdown throughout the supply chain, stretching around the world. Thus far, no significant supply shortages of battery raw material or anode and cathode material have been reported, largely because of oversupply from 2019, according to Benchmark. However, transportation bans and delays in China are raising concerns about raw materials shipments and the ability to deliver finished products to customers.

In Australia, a major producer of lithium, the Association of Mining and Exploration Companies warned members of stringent interstate travel restrictions. In South America, Chile has implemented a national curfew, and parts of Santiago are in quarantine, while Argentina has a countrywide quarantine. In Africa, cobalt supply disruptions could occur due to border and port closures in South Africa in tandem with a lockdown in the cobalt-producing Democratic Republic of Congo.

—Read the full article from S&P Global Market Intelligence

Gas utilities tap Great Recession playbook, new tools to confront coronavirus

atural gas utilities are deploying some of the same strategies that helped them weather the Great Recession, but executives say the industry has also changed considerably over the past decade and the coronavirus presents a new set of challenges. Utilities are bracing for a drop in gas volumes and electric power load during the looming recession, just like they experienced in the 2007-2009 downturn. Once again, they are looking to take out costs, but new or expanded technologies and regulatory policies also give some utilities additional levers to pull.

To be sure, the pandemic is very different from the housing and financial market crashes, according to WEC Energy Group Inc., a multi-utility that generates about 38% of its pretax margin from gas utilities in Wisconsin, Minnesota, Michigan and Illinois. While the coronavirus crisis developed more abruptly than the recession earlier in the century, WEC's industrial customers remain more positive about the long-term economic outlook, the company recently told Guggenheim Partners.

—Read the full article from S&P Global Market Intelligence

UNITED STATES

The COVID-19 Outbreak Weakens U.S. State And Local Government Credit Conditions

The COVID-19 pandemic and the consequential global economic recession will affect U.S. state and local governments to varying degrees. During this period of pronounced economic volatility, S&P Global Ratings recognizes the public health crisis across the country and the strain on state governments coordinating a response across all levels of government. As economic forecasts change, implementation of federal relief efforts emerge, and other information becomes available, S&P Global Ratings will continually evaluate our U.S. state portfolio for potential credit implications. On April 1, S&P Global Ratings revised its sector outlook to negative for all U.S. public finance sectors, reflecting in part the precipitous decline in economic conditions to end the quarter, which is anticipated to continue at least through the second quarter.

Most U.S. states entered 2020 on a comparatively stable footing, benefiting from a decade-long national economic expansion. Ratings on issuers with narrower payment streams are more susceptible to immediate pressures than a state or local government's general credit quality. State and local governments with concentrated economic activities are more likely to see revenue declines.

—Read the full report from S&P Global Ratings

COVID-19: A Closer Look At How It Affects 10 Major U.S. Cities

COVID-19 will have a significant effect on major U.S. cities, increasing expenditures and reducing revenues. The projected hit to U.S. economic growth from the ensuing recession will exacerbate the situation, presenting even more challenges for cities as they struggle to maintain structural balance, especially for those reliant on economically sensitive revenues. While we expect the federal relief package to aid state and local governments in the near term, the timing and support remains unknown, placing more pressure on liquidity levels.

The COVID-19 pandemic continues to evolve rapidly and has already plunged the entire world—and the U.S. with it—into recession. Projections for GDP contraction start in the first quarter (negative 1.3%) and worsening substantially in the second (negative 12.7%). Over the course of 2020, S&P Global Ratings forecasts an annualized decline in real GDP of 2.1%. The forecast is predicated on a precipitous drop in tax collections on consumer spending, coupled with a surge in unemployment. As a result, all of S&P Global Ratings' sector outlooks in U.S. public finance are now negative.

—Read the full report from S&P Global Ratings

Update: Coronavirus-related corporate revolving credit drawdowns grow to $184B

The tally of U.S. corporate entities drawing upon existing revolving credit lines since March 5 grew by $8.3 billion yesterday as companies continue efforts to shore up liquidity amid the coronavirus crisis. The revolving credit drawdown total since March 5 — when LCD began tracking this info — is now $183.6 billion, via approximately 315 credit facilities. Historically, these revolving credit lines could go largely undrawn and might be used for working capital, as a backup line of credit or for corporate cash emergencies. Many of these debt issuers have cited in SEC filings the coronavirus as the reason for tapping these lines, along with an "abundance of caution."

—Read the full article from S&P Global Market Intelligence

US insurers have a reprieve from lower interest rates, but not for long

Widening credit spreads and yields from existing bonds are protecting U.S. life insurers' investment returns from the effects of coronavirus-fueled interest rate cuts, but analysts say this cushion will not last forever.

The Federal Reserve on March 16 cut interest rates to between zero percent and 0.25% from between 1% and 1.25% in response to the growing crisis from the new coronavirus pandemic. For insurers, which typically have bond-heavy investment portfolios, a fall in interest rates generally means lower reinvestment rates, because the new bonds they buy to replace maturing ones will pay less interest.Ten-year U.S. Treasury notes were yielding 0.60% as of early April 2, 2020, down from 1.92% at Dec. 31, 2019.

—Read the full article from S&P Global Market Intelligence

COVID-19 Containment Measures Put U.S. Timeshare Loan Payments To The Test

U.S. timeshare securitizations will likely see a short-term spike in delinquencies due to the impact of the COVID-19 containment measures. However, S&P Global Ratings believes the securitizations generally have sufficient liquidity to support senior fees and interest payments. Over the longer term, credit could also be negatively affected if unemployment rates continue to rise, bankruptcy filings continue to increase, consumers continue to limit travel, and timeshare borrowers' payment priorities shift to pay down nondiscretionary debt first. S&P Global Ratings is increasing our base-case assumption for defaults and testing additional sensitivity scenarios to incorporate the uncertain and weakened U.S. economic outlook.

The containment measures to slow the spread of COVID-19 is putting an enormous strain on global economic activity. The U.S. lodging sector is among those hardest hit with unprecedented declines in revenue, which S&P Global Ratings expects will continue as long as there are bans and restrictions on travel. Within lodging, S&P Global Ratings believes the performance of timeshare loan securitizations will likely deteriorate due to travel restraints (including the government-mandated closure of resorts), the projected increase in unemployment, the resulting increase in bankruptcy filings, and the potential shift in consumer behavior, including priority of payment on various loan obligations.

—Read the full report from S&P Global Ratings

US banks pump out cash to hoteliers reeling from COVID-19

Hotel companies battered by the coronavirus pandemic have leaned hard on their banking relationships in a bid to generate cash amid widespread property closures. Occupancy and revenue per available rooms have declined to an unprecedented degree in U.S. hotels since the crisis began, prompting some hotel owners and operators to draw more than $7 billion from their revolving credit facilities and others to renegotiate loans.

The credit facility drawdowns affect a host of lenders, including industry giants like Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co. and Goldman Sachs Group Inc. Smaller banks, meanwhile, have exposure to the hotel industry through commercial real estate loans backed by lodging properties,and through commercial and industrial loans to owners and operators.

—Read the full article from S&P Global Market Intelligence

Mobile location data tracking tools raise privacy questions amid COVID-19

Amid reports that the U.S. government is collaborating with tech companies to understand Americans' movement during the coronavirus pandemic, legal implications of the practice depend on how closely companies adhere to their stated privacy practices and on how anonymous anonymized data truly is.

In response to the ongoing outbreak, mobile advertising and tech firms are offering up their geolocation data to track the spread of the virus and the adoption of social distancing. Now, government officials at the federal, state and local level are hoping to use this data to better understand current public behavior, according to The Wall Street Journal. Companies note that the data is anonymous and thus protects user privacy, but privacy experts are divided on how the sharing of this data comports with privacy laws and consumer expectations.

—Read the full article from S&P Global Market Intelligence

US Energy Department offers 30 million barrels of SPR space to US producers

After Democrats in Congress blocked efforts to buy US crude for the Strategic Petroleum Reserve, the Department of Energy announced Thursday that it was making 30 million barrels of space available for US producers to store crude. The DOE said it would make an additional 47 million barrels of storage space, accounting for the remainder of its total capacity, available at a later date.

"The Department continues to work with Congress to find ways to make funding available for DOE to buy American oil," US Energy Secretary Dan Brouillette said in a statement. "However, we must move with a sense of urgency to support an industry that underpins the US economy and supports our national security. Making some of the SPR's storage capacity available to industry, without purchasing the oil, provides this immediate benefit to the industry and its hard-working employees."

In a request for proposals released Thursday, DOE said the initial, 30 million barrels of storage space would be made through an exchange of up to 22.8 million barrels of sweet crude and 7.2 million barrels of sour crude, both "produced in the United States by United States producers." The sweet crude barrels would be delivered to the SPR's Bayou Choctaw, Bryan Mound, and Big Hill sites and the sour crude would need to be delivered to the SPR's West Hackberry site. All deliveries would be made from May 1 through June 30 and would be scheduled for return between August 1, 2020, and March 31, 2021, for the Bryan Mound, Big Hill, and West Hackberry sites, and between October 1, 2020, and March 31, 2021, for the Bayou Choctaw site.

—Read the full article from S&P Global Platts

Analysis: Coronavirus response could limit gas demand upside from fuel-switching

As US natural gas prices continue to test new lows, rising power-sector demand for the fuel from coal-to-gas switching could be offset in the months ahead by anticipated demand destruction and a compressed nuclear refueling schedule – both factors linked to the growing coronavirus pandemic. Today, cash prices at the Henry Hub lost another 11 cents, tumbling to a preliminary 21-year low settlement price at just $1.48/MMBtu. Since November, the benchmark US gas index has given up more than $1.35, or nearly 48%, S&P Global Platts data shows.

Over the same five-month period, coal-vs-gas $/MWh fuel cost ratios have moved aggressively in favor of gas in nearly all of the competitive independent system operator territories, including SPP South, Into Southern, PJM West and MISO Indiana. Tumbling prices and favorable cost ratios for gas haven't gone unnoticed by power generators. Last month, thermal load share for gas in the US power sector climbed to an estimated 66%, up from 55% as recently as November, data compiled by S&P Global Platts Analytics shows.

—Read the full article from S&P Global Platts

PODCAST OF THE DAY

Commodities Focus: Shades of the Past: US natural gas prices plunge to levels last seen in March 2016

The US gas market has fallen to pricing levels last seen in March 2016 amid record-high US gas production, a weak demand outlook, and storage above the five-year average. S&P Global Platts natural gas pricing manager Ryan Ouwerkerk joins senior Gas Daily writer J Robinson and Platts Analytics natural gas analytics team lead Luke Jackson to discuss the current market conditions, the causes and market implications of the March 2016 price rout, and the outlook for US gas markets going forward.

—Listen and subscribe to the Commodities Focus podcast from S&P Global Platts

EUROPE AND THE MIDDLE EAST

COVID-19: Coronavirus-Related Public Rating Actions On Nonfinancial Corporations And Affected European CLOs

In response to investors' growing interest in the COVID-19 coronavirus and its credit effects on companies and European corporate loan obligations (CLOs), S&P Global Ratings is publishing a regularly updated list of rating actions we have taken globally on nonfinancial corporations, which have had an effect on European CLOs, and a summary table. These are public ratings where S&P Global Ratings mentions the COVID-19 coronavirus as one factor or in combination with others.

—Read the full report from S&P Global Ratings

Credit FAQ: A Deeper Dive Into The Potential Credit Effects Of COVID-19 On European CMBS

Which structural features are coming to the fore in light of COVID-19's effects on credit performance? How does S&P Global Ratings treat interest shortfalls and when might S&P Global Ratings lower ratings? How does sovereign downgrade risk affect European CMBS ratings? As the COVID-19-related economic dislocation unfolds, S&P Global Ratings has received numerous questions concerning the impact on European commercial mortgage backed securities (CMBS). This FAQ answers the most common questions we have received and gives S&P Global Ratings' views regarding the potential credit effects on this sector.

S&P Global Ratings acknowledges a high degree of uncertainty about the rate of spread and peak of the coronavirus outbreak. Some government authorities estimate the pandemic will peak about midyear, and S&P Global Ratings is using this assumption in assessing the economic and credit implications. S&P Global Ratings believes the measures adopted to contain COVID-19 have pushed the global economy into recession. As the situation evolves, we will update our assumptions and estimates accordingly.

—Read the full FAQ from S&P Global Ratings

Scenario Analysis: How Credit Distress Due To COVID-19 Could Affect European CLO Ratings

Even before the public health effects of the new coronavirus outbreak went global, with policy responses throwing economies and financial markets into turmoil, the European collateralized loan obligation (CLO) market was facing a challenging environment. A scarcity of collateral was putting transaction economics under pressure, while underlying corporate credit quality was deteriorating. The CLO market's role in supplying debt funding to leveraged corporates was raising questions over how the transactions might behave if the credit cycle were to turn.

Now, the twin shocks of the coronavirus pandemic and the collapse in oil prices have triggered a tightening in financing conditions and a potential wave of credit distress. While a raft of central bank and government counter-measures may provide short-term liquidity support for businesses, impaired operating performance could still pressure credit quality over time, with the duration and severity of the health emergency unknown. This could raise particular challenges for the low rated speculative-grade companies backing CLOs.

Applying a variety of hypothetical stress scenarios to a typical European CLO transaction shows that the rating changes, if any, would generally be greater further down the capital structure. Under 10 scenarios of varying severity, the 'AAA' tranche rating appears resilient and the 'BBB' rated tranche remains investment-grade in most cases. However, in the most severe scenarios—where all of the underlying obligors are downgraded or 10% of them default—CLO ratings throughout the capital structure could fall by one to three notches. This analysis may be broadly representative of how our European CLO ratings could move in certain downturn scenarios, but in reality the ratings migration would differ between transactions, depending on structure, portfolio, and manager.

—Read the full report from S&P Global Ratings

April petrochemicals prices drop as COVID-19 infection rate rises

With borders across Europe closing, supply-chain concerns continue to rise, with challenges heard across the petrochemical sector and prices plunging as new price levels for April were released.

"The market is caught between a rock and a hard place — demand destruction as a result of the coronavirus pandemic and the OPEC price war which could see crude oil prices below $20/b in the coming months," according to Rob Stier, senior manager at S&P Global Platts Analytics. "Supply chain and logistics constraints could result in producers having to cut rates regardless of margins. We are in unchartered territory, but the risks for the next three to six months are still to the downside," he added.

—Read the full article from S&P Global Platts

EMERGING MARKETS

Gold miners shutter Mexican operations on COVID-19 shutdown

Several gold-focused mining companies announced a wave of operation closures in Mexico Thursday after the government this week ordered all non-essential businesses to shut down in a bid to contain the spread of COVID-19. Newmont said Thursday that it was working with local governments, communities, employees, unions and contractors to ensure a safe and orderly ramp down at its Peñasquito gold mine in Mexico to comply with the government's directives.

"Whilst Newmont currently has no confirmed cases of COVID-19, we have proactively implemented rigorous and wide-ranging controls at all of our sites around the globe to protect our workforce and neighboring communities from contracting or transmitting the disease," said Newmont CEO Tom Palmer in a statement, adding: "We will ensure Peñasquito remains well-positioned to safely and efficiently ramp up operations in a timely manner once the government's directive is lifted."

Peñasquito produced 144,000 oz of gold in 2019. It is the third-largest gold-producing mine in Mexico, according to the most recent data provided via S&P Global Market Intelligence. Market Intelligence is a division of S&P Global. Similarly, Torex Gold halted operations at its El Limón Guajes mine, the company said Thursday.

—Read the full article from S&P Global Platts

Iraqi parliamentary committee recommends oil groups paid with crude not cash

Iraq's economic parliamentary committee has recommended paying oil companies operating in OPEC's second-largest oil producer with crude instead of cash and cutting unnecessary costs, the state-run Iraqi News Agency reported Thursday. The proposals were among 14 recommendations tabled to cope with the oil price crash, a member of the committee, Mazen el-Fili, said in a statement carried by INA.

The committee also recommend the semi-autonomous Kurdish region in northern Iraq supply the Baghdad government's oil ministry with its crude to be marketed federally, rather than by the Kurdish oil ministry. Revenue from the oil sales would be distributed among Iraq's governorates, according to the size of their population.

—Read the full article from S&P Global Platts

Saudi airlines seen suffering sharpest losses in Middle East on travel restrictions: IATA

Saudi airlines are forecast to suffer the most among their Middle East peers due to travel restrictions caused by the corona pandemic, but the biggest impact on GDP and jobs will be in the UAE, the International Air Transport Association said in a report Thursday. Saudi airlines' lost passenger revenue in 2020 is estimated at $5.61 billion due to a 39% drop in passenger demand that may lead to 217,570 job losses and a $13.6-billion impact on GDP, IATA said.

The UAE's airlines will lose $5.36 billion due to 40% slump in passenger demand, which may lead to 287,863 job losses and a $17.7-billion impact on GDP, it added. IATA represents 290 airlines, accounting for 82% of global air traffic. The Middle East as a whole is forecast to lose $19 billion in passenger revenue in 2020 out of the $252 billion in total projected for the global aviation industry as countries across the world suspend flights and impose various travel restrictions.

—Read the full article from S&P Global Platts

UAE banks face profit crunch, decline in asset quality due to coronavirus

Banks in the United Arab Emirates are facing lower profits due to a recent interest rate cut, expected lower credit demand, and higher cost of risk with a deterioration in asset quality due to the impact of the new coronavirus. At the same, policy measures from the country's central bank have boosted bank capital and should reduce insolvencies among borrowers.

The pandemic will likely generate "a broad-based shock to the economy," hurting tourism, transportation, trade and real estate, Moody's said in a research note. The economy was already slowing due to factors including slower population growth, regional geopolitical tensions, low oil prices and the strength of the United Arab Emirates dirham affecting tourism. Authorities in the UAE have announced strict stay at-home orders, ceased issuances of new tourist visas, closed down most international air travel and shuttered nonessential retailers. Organizers of Dubai Expo 2020, a major trade event that had been expected to contribute to an economic uplift this year, have requested a one-year delay.

—Read the full article from S&P Global Platts

Written and compiled by Molly Mintz.