Given it’s Monday, you may be looking through your weekend credit card transactions with a touch of regret. China is experiencing a similar feeling. But where you might’ve bought a few too many cocktails, China is dealing with $78 billion of loans related to its Belt and Road Initiative that have turned sour in the past three years alone. Your weekend spending looks quite responsible in comparison.

The lowdown

• 🛣️ China hit by a surge in bad loans related to the Belt and Road Initiative.

• 🦅 Sega in talks to buy Angry Birds mobile game creator Rovio for around $1 billion.

• 🧬 Merck to buy autoimmune disease treatment specialist Prometheus Biosciences in $11 billion deal.

Flex your finance muscle

Delayed draw term loan

A delayed draw term loan is a type of loan where the borrower can access the loan at a later time, rather than receiving the entire amount of the loan upfront. The borrower and the lender agree on a schedule of disbursements, with the borrower drawing down funds as needed.

This type of loan is commonly used by businesses that require funding for a project with a timeline that spans over a longer period. For example, a company may need to purchase equipment or complete a construction project that requires funds to be released over several stages.

Adobe will be using a $3.5 billion delayed draw term loan to help finance its planned purchase of Figma. The loan was agreed in January and is available for funding in a single drawing any time before September 15, if the purchase of Figma has closed by then — a big ‘if’ given the deal will be closely looked at by the DOJ.

Featured stories

KPMG Lower Gulf’s expensive audit failure

A Dubai court has ordered KPMG Lower Gulf to pay $231 million to a group of investors ($) due to poor audit work by the Big Four firm on an infrastructure fund. 

The award is one of the largest ever against an accounting firm and is highly problematic for the firm, given its revenue was only $210 million for the most recent financial year. KPMG Lower Gulf plans to appeal the ruling and it is unclear if insurance or KPMG's international network will cover the award.

The fine is large but is dwarfed by KPMG UK’s £1.3 billion settlement in relation to collapsed government contractor Carillion. It is also quite a lot less than the $600 million EY spent on its Project Everest own goal.

The content we're consuming today

• FT: A beginner’s guide to accounting fraud (and how to get away with it) ($).

• WSJ: Groupon Brings in New Finance Chief From Top Shareholder Pale Fire.

• The Economist: The lessons from America’s astonishing economic record ($).

Off-balance sheet items

• The 2023 London Marathon is this Sunday. Relive this highlight from the 2022 race where a man momentarily led the race after he made a bet with a friend years ago that he would, prompting six years of intense training.

The bottom line