Brazil

The Brazilian agricultural sector experienced a significant uptick in companies seeking judicial recovery during the third quarter of 2024. This trend reflects broader economic challenges affecting various industries across the country, the Rio Times reported. According to the RGF Judicial Recovery Monitor, 264 agricultural companies were undergoing judicial recovery by the end of the third quarter, a 20.5% increase from the previous period. The surge stems from falling commodity prices, rising production costs, and high debt levels among rural producers.

Brazil’s central bank warned that additional deterioration of inflation expectations could lead to a more protracted tightening cycle, days after policymakers doubled the pace of their interest rate hikes, Bloomberg News reported. “A further deterioration in expectations could lead to a more prolonged monetary policy tightening cycle,” central bankers wrote in minutes to their Nov. 5-6 meeting, when they raised the benchmark Selic by 50 basis points to 11.25%.

Retail sales in Brazil rose less than expected in September but recovered from a fall in the previous month, as the strength of Latin America's largest economy keeps in focus amidst the central bank's fight against inflation, Reuters reported. Retail sales volumes rose 0.5% in September from August, statistics agency IBGE said on Tuesday, below the 1.10% increase forecast by economists in a Reuters poll, but above August's 0.2% decrease. Sales grew 2.1% from the year-earlier period.

A Brazilian government-backed credit line for struggling airlines should be ready by early 2025, helping the industry ride out a bumpy stretch for big carriers, Ports and Airports Minister Silvio Costa Filho told Reuters. Gol Linhas Aereas, which is negotiating its exit from bankruptcy protection, and Azul , which recently renegotiated debts to raise fresh capital, are both in talks with the government about the credit, Costa Filho said.

A boom in Brazil’s agriculture sector sparked a rush of investments, with the $7 billion market for agribusiness funds luring people from all walks of life in the past three years, Bloomberg News reported. But with bumper crops across the globe sending prices plunging and Brazilian farmers filing for bankruptcy at alarming rates, the retail investor is paying the price. It’s a sobering reminder of market risks to investors who have been bombarded with messages on national television promoting agriculture as hip and cool, and even music that celebrates the success of the sector.

Inflation smashed through the top of the central bank’s tolerance range in Brazil and accelerated much more than expected in Chile as surging energy costs give policymakers another reason to worry, Bloomberg News reported. Official data released Friday showed Brazil’s consumer prices rose 4.76% in October from the year prior, above the 4.5% tolerance ceiling of the central bank’s goal. Chile’s cost of living posted the biggest monthly rise since March of last year as annual inflation sped up to 4.7%.

Julius Baer Group Ltd. hired Goldman Sachs to seek buyers for its Brazilian unit, according to people familiar to the matter, a move that could help the Swiss bank right its footing after some high-profile setbacks, Bloomberg News reported. The unit has already been offered to some Brazilian banks and multifamily offices, the people said, asking not to be identified because the talks are private. Talks are ongoing and may not end up in a deal, the people said. Goldman Sachs and Julius Baer declined to comment.

Brazilian airline Gol said on Wednesday it has signed a deal with shareholder Abra to reinforce its current restructuring plan and raise credit to exit bankruptcy, including the conversion of $950 million in Abra's secured debt into Gol shares, Reuters reported. Abra is the main investor in airlines Gol and Avianca. The agreement is related to Gol's chapter 11 request, filed in January. According to the filing, Gol will present a restructuring plan that will allow a significant reduction of its leverage.

Azul SA’s credit score was cut one notch by S&P Global Ratings, which called the airline’s agreement with bondholders for additional financing a distressed transaction, Bloomberg News reported. S&P downgraded the Brazilian carrier to CC from CCC+ with a negative outlook, according to a statement released Wednesday. Azul inked a deal with its creditors this week for as much as $500 million in new senior secured debt, with $150 million to be provided initially and $250 million by the end of the year.