Brazil

LATAM Airlines reported a fourth-quarter net profit of $2.538 billion, the company said on Thursday, and said that the results reflected all financial renegotiations stemming from its bankruptcy proceedings, Reuters reported. The quarterly profit of South America's leading airline compares to a loss of $2.755 billion during the same three-month period a year earlier. However the company will propose not to pay out dividends and instead use its 2022 profits to offset accumulated losses, it said in a securities filing later on Thursday.

The turmoil in Brazil’s credit market has put several local bond sales on hold as banks and investors become more cautious with corporate borrowers in the aftermath of the sudden collapse of Americanas SA, Bloomberg News reported. Power company Coelba, a unit of Neoenergia SA, has pulled a planned debt sale after underwriters tapped the so-called “market flex” clause that allows for changes in conditions, according to people familiar with the matter. The firm had announced an issuance of 1.5 billion reais ($290 million) in local notes on Jan.

Brazil’s battered airlines got some relief on Monday after striking agreements that eased investors’ concern over their liquidity amid deteriorating credit conditions in their home market, Bloomberg News reported. Azul SA’s American depositary receipts closed 41% higher at $5.85 in New York, the most on record, and bonds due in 2026 climbed 16 cents to 67.5 cents on the dollar. The moves follow an agreement the company struck with most lessors allowing it to reduce its payments in exchange for a mix of stocks and bonds, according to a filing published Sunday.

The billionaire shareholders behind troubled Brazilian retailer Americanas SA are informally offering to boost a capital injection to 10 billion reais ($1.9 billion) which is being well received by bank creditors and could unlock talks, Bloomberg News reported. The last official offer of 7 billion reais was considered too low by creditors, but negotiations could begin in earnest if Jorge Paulo Lemann and his partners are willing to put 10 billion reais as a starting point.

Brazil’s development bank plans to issue tax-free bonds to double credit operations to nearly $40 billion without the Treasury’s help, according to its planning and project structuring director, Bloomberg News reported. Nelson Barbosa, who served as finance minister under Dilma Rousseff and has now joined the ranks of the bank known as BNDES, said the bonds will be linked to development projects in areas where the institution wants to invest, such as energy transition, innovation and infrastructure. They will also be available to individual investors, sweetened by the exemption of income tax.

The management of troubled Brazilian retailer Americanas SA denied the existence of the financial operations that led to an accounting scandal early this year, a report by local newspaper O Globo showed on Wednesday, citing internal investigation documents, Reuters reported.

Brazil's Secretariat of Economic Policy (SPE) said on Thursday that the sharp 2022 economic slowdown is mainly due to reduced liquidity in the external environment and the contractionary cycle of monetary policy in the country, Reuters reported. In a statement about the GDP performance, which rose 2.9% last year compared to 5% in 2021, SPE said that the country's high benchmark interest rate worsens the conditions of both bank and non-bank credit, posing a risk to activity this year by making it difficult for companies to roll over debt.

Brazilian corporate bonds got hammered in February after the implosion of Americanas SA, further weakening the outlook for firms already wrestling with high borrowing costs, Bloomberg News reported. Six of the 10 worst-performing issuers in Latin America this month are Brazilian companies, data compiled by Bloomberg show. Dollar-denominated notes from Gol, Atento and Light lost at least a quarter of their value, while Azul, Stone and BRF bonds delivered losses of between 10% and 15%.

Outstanding loans in Brazil decreased by 0.3% in January, according to central bank data on Monday, marking the first decline in a year, Reuters reported. The result suggests a slowdown that is likely to gain momentum in a scenario of high borrowing costs following the aggressive monetary tightening implemented by the central bank to curb inflation. Outstanding loans fell to 5.3 trillion reais ($1 trillion) in January, with loans to companies decreasing by 2.4%, while credit to families rose by 1.1%.