Brazil

Azul is not planning on filing for Chapter 11 bankruptcy protection, the Brazilian airline's CEO told Reuters, contradicting reports which caused the carrier's shares to nosedive on Thursday, Reuters reported. Bloomberg reported on Wednesday Azul was considering options ranging from an equity offering to filing for Chapter 11 in the United States in order to address its debt obligations. The report was "misinterpreted," the company responded in a filing, as its Brazil-listed shares sank 24%.

Brazil’s possible cycle of monetary tightening would be gradual, central bank chief Roberto Campos Neto said on Friday as he sought to temper investor bets on large interest rate hikes starting next month, Bloomberg News reported. “If and when there is a cycle of interest rate increases, it will be gradual,” Campos Neto said at an event organized by XP Investimentos. Still, the bank will remain data dependent and refrain from giving guidance on its next steps, he said.

The largest shareholder of ailing Brazilian airline Gol Linhas Aereas Inteligentes SA is nearing a deal to raise $1.3 billion of funds from investment firm Castlelake LP to stave off the risk of defaulting on its bonds, Bloomberg News reported. Abra Group Ltd., which also owns Colombian airline Avianca Holdings SA, outlined Castlelake’s proposal to its investors last week. Under the plan, the investment firm would refinance Abra’s secured bonds due 2028, which could default after Gol raised a bankruptcy loan as part of its chapter 11 procedure in the U.S.

Azul SA shares slumped to a record low Thursday as the Brazilian airline is weighing options from an equity offering to a U.S. chapter 11 filing to address approaching debt obligations, Bloomberg News reported. The troubled carrier is also actively working get a merger Gol Linhas Aereas Inteligentes SA over the line to convince creditors that a new combined entity would have lower debt levels and better growth prospects. But that approach is seen as less attractive given Azul’s imminent cash needs and weak financial results.

Brazilian lawmakers approved a long-awaited financial aid plan for the airline sector that is expected to provide 5 billion reais ($914 million) in credit for troubled carriers, Bloomberg News reported. The program, already passed by the Senate, was cleared in the lower house on Wednesday. It now needs to be signed by president Luiz Inacio Lula da Silva, who campaigned on a pledge to restore prosperity in Brazil and wants to cut fares enough to allow the poor to fly regularly.

A court decision in the Amazon rainforest city of Sinop that shielded a corn and soybean producer’s land from seizure by creditors is reverberating through Faria Lima Avenue, the Brazilian equivalent to Wall Street, Bloomberg News reported. The ruling is raising concerns among lenders that it may be harder than anticipated to take control of acreage pledged as backing for agribusiness receivables certificates, or CRAs, a class of relatively new fixed-income securities used to finance grain and oilseed growers.

Brazil's central bank chief said on Saturday that discussing monetary policy transmission will become increasingly difficult without addressing fiscal issues, citing the growing burden of public debt driven by expanded government spending, Reuters reported. Roberto Campos Neto stressed that income transfer programs implemented during the pandemic are now larger and have become permanent. In Brazil, 50 million people are "gaining money from the government compared to 43 million people who are employees and entrepreneurs," he added.

Brazil is sketching out a plan to provide mid-sized companies with better access to the country’s capital markets, part of an effort by President Luiz Inacio Lula da Silva to bolster growth, Bloomberg News reported. The goal is to make it easier for companies to tap debt or equity markets, according to Marcos Pinto, secretary for economic reforms. The ideas, which are still being hashed out, include lowering fees associated with issuances and simplifying audit requirements, he said in an interview.

Brazilian airlines, already struggling with high interest rates and volatile fuel costs, are being hit with more losses as currency woes and climate challenges test the sector’s operational resilience, Bloomberg News reported. Azul SA and Gol Linhas Aereas Inteligentes SA, two of the nation’s largest carriers, reported setbacks in the second quarter as a weakening Brazilian real and the closing of a key airport following torrential rains in country’s south dragged their earnings, quarterly reports showed this week.