Economy

US Senate staves off default through last-minute debt deal; Ten posts $285 million loss: Midday Roundup

Yolanda Redrup /

The United States Senate has passed a bill raising the debt limit and reopening the federal government.

The bill, which received 81 votes with only 18 against, will now pass back to the House of Representatives for final approval. It is expected that house will also pass the bill.

Overnight, Republican and Democratic senators announced a plan that would stave off the impending debt crisis by extending the ability of the US Treasury to borrow until February 7, 2014.

“The compromise we reached will provide our economy with the stability it desperately needs,” Senate Majority Leader and Democrat Harry Reid said, a statement also endorsed by Reid’s Republican rival Senator Mitch McConnell.

As well as giving the Treasury the ability to borrow past its debt ceiling until February, the deal also reopens the American Government, which has been shut down for over two weeks.

The House and Senate are also bound to attend a budget conference, which must reach a deal on the budget by December 13.

Republicans had shut down the government in a bid to defund Obama’s healthcare reforms. As part of this deal, some of the subsidies will now be means-tested.

Ten posts $285 million loss

Free-to-air broadcaster Ten Network has posted a heavy loss on write-downs, reporting a net loss of $285 million for the full-year.

Despite this, the network’s net debt reduced by $235 million to $28 million as of August.

The result was driven by $336 million in one-off charges from continuing operations to do with a restructuring.

Ten chief executive Hamish McLennan said in a statement the company’s results reflected the extent of the turnaround needed in its core performance.

“The Board and management of Ten recognise time and financial investment are required to build rating and revenue, which is why a new financing facility is proposed,” he says.

“Ten’s management needs to focus on investing in its strategy to build ratings, while maintain cost disciplines in other departments.”

Markets relish US certainty

The Australian share market has enjoyed a healthy start to the day.

By 11am, S&P/ASX200 had gained 0.38% to 5283.1 points, while the broader All Ordinaries index rose 0.27% to 5238.8 points.

“With the debt hullabaloo in the US pushed back onto the to-do list for early next year, the local sharemarket has moved 0.5% higher in the early trading this morning,” said CMC Markets sales trader Niall King.

“Financial and Industrial sectors have led the way so far today, following overseas international equity markets which saw news of a debt deal filtering through.”

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