Brazil

The perceived risk of Latin America’s largest economy has dropped to a five-year low as President Jair Bolsonaro’s proposed overhaul of the country’s pension system nears a key vote in Congress, Bloomberg News reported. The cost to insure Brazil’s debt against default for five years narrowed to as low as 138 basis points over comparable U.S. Treasuries Tuesday morning, the tightest since September 2014, three months before the onset of a crushing two-year recession in the country.

Brazil’s state-controlled bank Caixa Economica Federal SA is challenging a decision by corruption-ensnared conglomerate Odebrecht SA to include one of its units’ foreign bondholders in its bankruptcy protection filing, according to a document filed in the court case, Reuters reported. Among the 21 Odebrecht affiliates that filed for the bankruptcy proceeding two weeks ago was Odebrecht Finance, the issuer of $3 billion in bonds guaranteed by the group’s construction unit OEC.

Brazilian bank Itaú Unibanco Holding SA is questioning a decision by the judge in charge of Odebrecht bankruptcy related to a stake owned by the conglomerate in petrochemical producer Braskem SA, Brazilian newspaper Valor Economico reported on Tuesday. Itaú has not formally challenged the judge decision, but just asked the judge to reconsider it, Valor said, citing people with knowledge of the matter, Reuters reported. Odebrecht and Itau did not immediately reply to requests for comment. The case is under seal and not publicly available.

Brazil’s antitrust regulator wants new rules for allocating airplane landing and departure rights, known as slots, in Sao Paulo’s crowded domestic airport, saying they are too concentrated among two main airlines, Reuters reported. The recommendation comes as the country’s civil aviation regulator ANAC has announced it will take back the slots held by grounded airline Avianca Brasil in the airport, known as Congonhas, as part of a plan to redistribute them later.

Several insurers have reportedly begun taking action to avoid potential losses from the bankruptcy protection process for the holding company (ODB) of Brazilian construction conglomerate Odebrecht, BNamericas reported. Earlier in the week, ODB and 21 of its subsidiaries filed the bankruptcy protection request with 98.5bn reais (US$25.2bn) in debt. The request was accepted by a local court and became the country’s largest bankruptcy protection proceeding ever, surpassing Brazilian telecom operator Oi, which filed a request in 2016 with a debt pile of more than 64bn reais.

The Chief Executive Officer of state-controlled Banco do Brasil SA, Rubem Novaes, said on Wednesday that the bank has around 4 billion reais ($1.03 billion) in unsecured debt with construction conglomerate Odebrecht SA, which filed for bankruptcy this week, Reuters reported. “We have set aside provisions for most of the loans,” Novaes said, adding that Banco do Brasil will suffer losses if creditors’ debts are discounted at more than 50% in the restructuring.

A Brazilian judge on Tuesday granted bankruptcy protection to engineering group Odebrecht, beginning the process of restructuring 51 billion reais ($13 billion) of debt. Odebrecht, which was laid low by a corruption investigation that has rippled across Latin America, filed for bankruptcy protection on Monday, kicking off one of Latin America’s largest, in-court debt restructurings, Reuters reported.

A Brazilian appeals court ruled on Monday that airline Avianca Brasil should be allowed to hold a bankruptcy auction in which it is expected to sell its most coveted airport landing and departure rights, Reuters reported. The bankruptcy auction had been originally scheduled for early May, but was suspended at the last minute after an injunction was issued. Avianca Brasil filed for bankruptcy protection in December after falling behind on lease payments for its fleet and fell victim to high oil prices and a weak local currency.

Brazilian conglomerate Odebrecht SA filed on Monday for bankruptcy protection, aiming to restructure 51 billion reais ($13 billion) of debt in what would be one of Latin America’s largest-ever in-court debt restructurings, Reuters reported. The bankruptcy filing comes after years of struggles for Odebrecht, the biggest of the Brazilian engineering groups caught in a sweeping political corruption investigation that has rippled across Latin America.

Brazilian conglomerate Odebrecht SA’s construction unit expects to speed up talks with Petroleo Brasileiro SA to resume providing services to the state-run oil company and participate in its public auctions in the second half of 2019, an Odebrecht executive said on Thursday, Reuters reported. Olga Pontes, Odebrecht’s compliance director, says Odebrecht Engenharia e Construcao (OEC) should be able to resume its relationship with Petrobras because of steps taken by the conglomerate to improve governance and compliance in the wake of a 2016 leniency deal tied to a corruption scandal.