Brazil

Azul SA’s efforts to raise $400 million in fresh debt have hit a snag, with the troubled Brazilian airline rushing to raise the cash it needs to meet a key condition of its deal with aircraft lessors, Bloomberg News reported. Jefferies Financial Group had been reaching out to potential investors to help Azul raise cash through the sale of new debt that can be converted to equity, the people said, asking not to be named discussing private details. But the bank has so far come up short of the full amount.

Brazil's central bank chief Roberto Campos Neto on Monday highlighted a "huge" de-anchoring of inflation expectations in the country, adding that it is "very important" to bring inflation back to the 3% target, and policymakers are committed to doing so, Reuters reported. Speaking at an event hosted by the 20-20 Investment Association, Campos Neto said tight labor market data indicates the need to closely monitor services inflation. He also reiterated that policymakers chose not to provide monetary guidance to allow time to assess the evolving scenario.

Light has filed for bankruptcy protection in the U.S., a step by the Brazilian electric utility company to complete a restructuring deal that creditors approved in May in its home country, WSJ Pro Bankruptcy reported. Light on Tuesday filed for chapter 15 in the U.S. Bankruptcy Court in Houston. Light, which provides energy for most of Rio de Janeiro, began a reorganization in Brazil in 2023, as well as in England in July. The company has assets of $582.1 million and carries more than $2.1 billion in debt, including two issuances of U.S. notes totaling $600 million.

Azul SA is rushing to raise cash as part of a deal it reached last week with its aircraft lessors, a key step in the Brazilian carrier’s attempt to again rework its debt, Bloomberg News reported. The company was able to strike an agreement with lessors and parts suppliers that reduces its debt by 3 billion reais ($540 million) in exchange for 100 million new preferred shares. The announcement sent shares rallying as much as 22%. But the boost proved short-lived.

Brazil's central bank chief Roberto Campos Neto said on Tuesday that stablecoins and asset tokenization should be regulated in the country next year, as he delivered remarks in a video recorded for market intelligence firm Uqbar, Reuters reported. Stablecoins are pegged to real-world assets, such as the U.S. dollar, and therefore fluctuate much less than other crypto assets like bitcoin.

Azul’s shares jumped 16% in Sao Paulo trading after the Brazilian air carrier reached an agreement with its lessors and parts suppliers that helps cut its debt load, Bloomberg News reported. The deal allows the airline to slash 3 billion reais ($547 million) of debt in exchange for 100 million new preferred shares, according to a regulatory filing. “This agreement with lessors should ease the negotiations with other creditors,” Bradesco BBI analyst Victor Mizusaki writes in a note.

Brazil’s annual inflation sped up roughly in line with estimates in September as a historic drought pressured electricity and food prices in Latin America’s largest economy, Bloomberg News reported. Official data released Wednesday showed prices rose 4.42% from a year earlier, just below the 4.44% median estimate of economists surveyed Bloomberg. On the month, they increased 0.44%. Policymakers are raising interest rates as price pressures build and investors grow uneasy about the stewardship of Brazil’s economy.

Root Capital, a Rio de Janeiro-based firm specializing in credit, is launching a distressed-debt fund as filings for bankruptcy protection reach record highs in Brazil, Bloomberg News reported. “We continue to see stress in Brazil’s credit markets, the companies continue to go broke, the agribusiness sector is horrible, and the interest rates that people thought would start to fall now are going up again,” said Rafael Fritsch, partner and chief investment officer at Root Capital.

Executives in Latin America’s largest economy are redrawing plans, reprofiling debt and holding back investment as interest rates climb and the currency remains under pressure, Bloomberg News reported. While companies the world over have been contending with higher borrowing costs, Brazilian firms have had an especially tough burden, hit with some of the steepest rates in the world after surviving the pandemic with little government aid. Now rates are going up again after a respite of just over a year.

Brazil’s annual inflation slowed much more than expected in early September despite a hike to utility bills, giving some respite to the central bank as it raises borrowing costs to tame prices, Bloomberg News reported. Official data released Wednesday showed prices rose 4.12% from a year earlier, below all forecasts in a Bloomberg survey of economists that had a 4.29% median estimate. On the month, they increased 0.13%.