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Kem One’s bonds have cratered as some funds short them and others ply it with more debt

The debt of one of Europe’s largest chemicals companies has become a battleground for some of the world’s most aggressive credit hedge funds, as fears for the viability of the continent’s chemicals industry have almost wiped out the value of its bonds.

The financial decline of Kem One — a heavily indebted French chemicals producer owned by US private capital group Apollo — has pit credit funds in Europe and the US against each other, with some placing large bets against and some in favour of the company.

Credit funds betting on a recovery have scooped up the company’s bonds at deep discounts to their face value, while others have plied Kem One with even more debt in recent months. Some investors could be on the hook for steep losses as the company’s fortunes have worsened. Others who shorted Kem One’s debt have reaped large windfalls.

Among the company’s largest backers are London-based Arini Capital, one of the most active distressed credit investors in Europe, and New York-based Monarch Alternative Capital. The two funds teamed up to provide Kem One with an extra €200mn of financing early last year.

At the time, Kem One’s other €450mn of publicly traded bonds were changing hands at about 70 cents on the euro. They have since sunk to trade at 2 cents on the euro, with investors anticipating near 100 per cent losses for lenders to what is one of the worst affected constituents of Europe’s ailing chemicals industry.

Arini and Monarch’s debt facility ranks senior to those bonds, meaning they would be repaid first in the event of a default. The two funds doubled down last month, lending the company an additional €30mn that has the same collateral as, and ranks alongside, their previous $200mn loan.

On the other side of the trade, hedge funds including London-based Sona Asset Management and Polus Capital Management have shorted the company’s debt, booking profits as its bonds cratered in value, according to people familiar with the matter.

Diameter Capital Partners — a New York-based credit hedge fund in which Kem One-owner Apollo holds a stake — also built a small short position against Kem One’s bonds as part of a wider bet against the global chemicals industry, according to people familiar with the matter.

“We had success in the fourth quarter in shorts of global chemicals companies bedevilled not so much by sudden drops in demand (RECESSION!) than by the evolution of supply,” Diameter, which oversees $25bn in assets, said in its most recent investor letter. “The problem is China, which seems determined to add capacity up and down the chemicals chain.”

It added: “We have shorts in the most impacted names and believe that 2026 will be a watershed inflection for chemicals.”

One high yield credit investor who used to own Kem One bonds said they expected investors to get a “First Brands-esque recovery — soon to be zero”, a reference to the collapse of the Ohio-based car-parts supplier that sent shockwaves through Wall Street last year, wiping out creditors owed billions of dollars.

Kem One’s difficulties are part of a broader slowdown that has plagued Europe’s chemicals sector in the past 12 months, as it has battled a combination of high production costs, driven by rising energy prices and carbon tariffs, and a huge influx of cheap supply from China.

Industry peer Ineos has also taken a hit in credit markets in recent months, as investors have sold out of its more than $20bn debt pile.

Jim Ratcliffe’s group previously warned that time was “running out” to rescue Europe’s chemicals industry and last year filed anti-dumping cases against imports of cheap chemicals products to the EU.

Apollo, Arini, Monarch, Sona, Diameter and Polus declined to comment.

The plane maker expects to make between 70 and 75 of the aircraft a month by the end of next year, compared with a prior target of 75

Airbus AIR 2.11%increase; green up pointing triangle said a persistent Pratt & Whitney engine shortage had forced it to slow down production of its best-selling A320, the latest setback for the company as it struggles to leave supply-chain snags behind.

The European plane maker expects to make between 70 and 75 A320 aircraft a month by the end of next year, compared with a prior target of 75.

“Pratt & Whitney’s failure to commit to the number of engines ordered by Airbus is negatively impacting this year’s guidance and the ramp-up trajectory,” Airbus said. Pratt & Whitney parent RTX didn’t immediately respond to a request for comment.

Airbus said revenue for the three months to the end of December grew 5% on year to 25.98 billion euros, equivalent to $30.61 billion.

Net profit increased 6% to 2.58 billion euros, while adjusted earnings before interest and taxes—Airbus’s preferred measure of profitability—climbed 17% to 2.98 billion euros.

Analysts had expected revenue of 26.51 billion euros, a net profit of 2.36 billion euros and adjusted EBIT of nearly 2.87 billion euros, according to market consensus provided by the company based on estimates from 20 analysts.

Airbus said it would propose a 2025 dividend of 3.20 euros a share at its shareholders’ meeting on Apr. 14, compared with a dividend of 2 euros a share and a special dividend of 1 euro a share for the previous year.

The company is forecasting roughly 870 commercial aircraft deliveries this year, more than the 793 planes it dispatched in 2025. Airbus has dispatched 19 aircraft so far this year.

For 2026, Airbus expects adjusted EBIT of around 7.5 billion euros. Free cash flow before customer financing—a closely watched metric by analysts and investors—is projected at around 4.5 billion euros.

Sun PhuQuoc Airways, Vietnam Airlines sign deals with Boeing totaling more than $30 billion

Boeing BA -2.09%decrease; red down pointing triangle signed deals to sell almost 100 jets to Vietnamese carriers valued at over $30 billion, signaling warming ties between the U.S. and Vietnam as trade talks continue.

The deals were signed during a ​visit to the U.S. by the head of Vietnam’s Communist Party, To Lam, for the inaugural meeting of President Trump’s Board of Peace. The meeting is set to debut Trump’s vision for a new international organization to cement Middle East peace and rebuild Gaza.

The aircraft maker struck a $22.5 billion deal to sell up to 40 787-9 Dreamliners to Vietnam-based carrier Sun PhuQuoc Airways. The order is the largest ever for wide-body aircraft by a Vietnamese airline, and the first direct aircraft purchase by Sun PhuQuoc Airways, parent company Sun Group said in a social-media statement Thursday.

The newly established, privately owned Sun PhuQuoc Airways plans to expand its fleet to 100 aircraft by 2030, Sun Group said.

“Our partnership with Boeing establishes a strong foundation for building a world-class airline that operates in sync with the tourism and resort ecosystem Sun Group has developed,” Sun Group Chairman Dang Minh Truong said in a separate statement.

The deal came as flag carrier Vietnam Airlines HVN 1.66%increase; green up pointing triangle signed an order for 50 Boeing 737 MAX jets, valued around $8 billion, as part of an earlier announced U.S.-Vietnam trade pact. The carrier also plans to invest more than $12 billion in 30 wide-body Boeing aircraft, it said.

Separately, budget airline VietJet signed a financing agreement with Griffin Global Asset Management for six Boeing 737-8 aircraft, valued around $965 million at list prices.

“The agreement marks a significant step in VietJet’s strategy to diversify international funding sources while strengthening its financial capacity and capital structure in line with global standards,” the airline said.

VietJet also signed an engine and maintenance services agreement with Pratt & Whitney, valued around $5.4 billion.

In October, the U.S. said it signed a framework agreement with Vietnam that could provide the foundation for a fuller trade deal. Vietnam agreed to purchase Boeing aircraft as part of the pact, and the U.S. agreed to identify goods it would exempt from its tariff, which otherwise remains at 20% for Vietnam. The two countries have yet to finalize an agreement.

US president says Diego Garcia military base may be needed for strikes on Iran

US President Donald Trump has renewed his attack on UK Prime Minister Keir Starmer’s plan to transfer ownership of the Chagos Islands to Mauritius, as he highlighted the potential use of the Diego Garcia military base in any strikes on Iran.

Trump and his administration have whipsawed between criticism and support for the British government’s deal to hand over sovereignty of the islands, where the joint US-UK military base is located.

Trump is considering taking military action against Iran as the US tries to strike a deal with Tehran that is aimed at curbing its nuclear programme. Diego Garcia is about 5,200km from Tehran and could serve as a launching point for any attack given its proximity to Iran and its long runways.

The US-UK military base is a key strategic asset for Washington in the Indo-Pacific region, with a deepwater port that can accommodate aircraft carriers and the runways necessary to launch warplanes such as stealth B-2 bombers.

“I have been telling Prime Minister Keir Starmer . . . that he is making a big mistake by entering a 100 Year Lease with whoever it is that is ‘claiming’ Right, Title, and Interest to Diego Garcia,” Trump wrote in a Truth Social post on Wednesday, adding that Starmer is “losing control” of the base.

“Should Iran decide not to make a Deal, it may be necessary for the United States to use Diego Garcia . . . in order to eradicate a potential attack by a highly unstable and dangerous Regime — An attack that would potentially be made on the United Kingdom, as well as other friendly Countries,” Trump said.

He added: “DO NOT GIVE AWAY DIEGO GARCIA!”

The US-UK military base is also important to Washington for surveillance and intelligence gathering.

The US has been building up its forces in the Middle East as Trump weighs his military options against Iran. Washington’s newest and largest aircraft carrier, the USS Gerald R Ford, is on its way to the region, alongside several destroyers. It will join 10 ships already in the Middle East, including the USS Abraham Lincoln aircraft carrier.

The US has dispatched thousands of additional troops in the region, as well as fighter jets and air defences.

In the run-up to US strikes against Iran’s nuclear facilities last June, Washington sent B-2 bombers to Diego Garcia as a decoy. B-2 bombers from an air force base in Missouri instead hit the facilities.

The UK’s agreement last year to transfer ownership of the Chagos Islands — officially known as the British Indian Ocean Territory — was initially praised by Washington, including US secretary of state Marco Rubio.

But last month Trump accused Britain of “great stupidity” and “weakness” over the deal with Mauritius, and cited the UK plan as a reason for the US to secure Greenland, though he has since backed down from his threats to seize the vast Arctic island by force.

Then earlier this month, Trump rowed back his criticism, saying he understood that Starmer had made “the best [deal] he could make”.

That was followed by an expression of support from the state department on Tuesday.

It said the US “supports the decision of the United Kingdom to proceed with its agreement with Mauritius concerning the Chagos archipelago”.

Asked about the conflicting statements by Trump and the state department on Wednesday, White House press secretary Karoline Leavitt said the president’s “post should be taken as the policy of the Trump administration. It’s coming straight from the horse’s mouth”.

The US is set to hold bilateral talks with Mauritius next week that will focus on security arrangements and co-operation for the Diego Garcia base.

A spokesperson for the UK Foreign, Commonwealth and Development Office said: “The deal to secure the joint UK-US military base on Diego Garcia is crucial to the security of the UK and our key allies, and to keeping the British people safe. The agreement we have reached is the only way to guarantee the long-term future of this vital military base.”

Tory shadow foreign secretary Dame Priti Patel said Trump had “once again publicly rebuked Keir Starmer and his government over their ill-judged, unnecessary and expensive Chagos surrender”.