Brazil

Bonds of Unigel slipped into distressed territory on concern that poor results may put the chemical maker at risk of covenant violations, Bloomberg News reported. Dollar notes due in 2026 are down 34 cents since the firm posted its first-quarter earnings earlier this month, seen as weak by analysts. The plunge — the worst among Latin America’s corporate borrowers this quarter, according to data compiled by Bloomberg — sent yields jumping to more than 35%, from around 8% in January.

Brazil's Finance Minister Fernando Haddad emphasized on Wednesday that there is room for interest rate cuts in the country, contrasting the central bank chief's acknowledgment of ongoing challenges in achieving disinflation, Reuters reported. "My understanding that there is room for a cut cycle is no offense," he said during a hearing at the Lower House, adding that he is not questioning the central bank's power to set rates.

Brazil’s central bank chief said high levels of public debt are to blame for interest rates steady at a six-year high, countering President Luiz Inacio Lula da Silva’s criticism of monetary policy and appeals for a rate cut, Bloomberg News reported. If government debt were low, “the cost of money would be cheaper for everyone,” Roberto Campos Neto said during a TV interview with Brazil’s CNN. Campos Neto said it’s not the central bank’s fault when the government issues a bond and pays yields of 6% above inflation, like Brazil did recently.

Rio de Janeiro’s electric utility filed for protection from creditors after warning that it was struggling to pay its debts without government authorization to increase tariffs, Bloomberg News reported. Its bonds and shares sank. Light SA, as the holding company for Light is called, filed a request for protection from creditors of 11 billion reais ($2.23 billion) to a Rio de Janeiro court on Friday, according to a regulatory filing.

Rio de Janeiro’s electric company says so many people are stealing power in the city’s slums that it has been pushed into default, causing a massive selloff and attracting a veteran buyer of distressed Brazilian corporations, Bloomberg News reported. Light SA lost around $200 million last year from the illegal hookups, perched like a tangle of wire birds’ nests atop power poles across Rio’s favelas. That’s even after years of investment to prevent theft. The 120-year-old utility says it can’t keep absorbing the losses, which also include delinquencies and judicial costs.

Brazil’s central bank held its interest rate steady for the sixth straight meeting, sticking with its tough inflation warnings and tweaking its language only slightly even as President Luiz Inacio Lula da Silva calls for looser monetary policy, Bloomberg News reported. The bank’s board kept the Selic unchanged at 13.75% late on Wednesday as expected by almost all economists in a Bloomberg survey. In a statement, Copom, as the board is known, made a small concession by saying a new rate hike is less likely, softening language used since September.

Argentina is seeking new easing of targets in its $44 billion deal with the International Monetary Fund and faster payouts, and is pushing to get key IMF members the United States and Brazil to support it, Reuters reported. The country is expected to return to talks with the IMF on Thursday over amending the deal, which has come under strain amid a historic drought that has battered the country's key cash crops soy and corn, a senior economy ministry official said.

Shareholders of embattled Brazilian retailer Americanas SA voted to ratify most of the names proposed for its board of directors, after the firm sank into bankruptcy in January following the revelation of a massive accounting error, Bloomberg News reported. At a general meeting held Saturday, Carlos Sicupira, one of the billionaire founders of 3G Capital Inc. that’s also among Americanas’ largest shareholders, was reelected to the board. Minority shareholders managed to elect Pierre Moreau.

Ahead of Brazil's next monetary policy decision, the Finance Minister expressed apprehension on Thursday about the economic impact of high interest rates, while the central bank's chief continued to emphasize inflation concerns, Reuters reported. Speaking at a Senate debate session on interest rates, inflation, and economic growth, Finance Minister Fernando Haddad warned that failure to integrate the country's monetary and fiscal policies would create "a lot of difficulty" in achieving the Brazilian economy's needs.