Brazil

Brazil sugar and ethanol producer Tonon Bioenergia SA, which operates three mills with a total capacity to process 8.2 million tonnes of cane per year, has sought court protection against creditors, the company said late on Wednesday, Reuters reported. Tonon said its debt, largely denominated in dollars, soared following the recent weakening of Brazil's currency. The sugar group's debt in Brazilian reais jumped by 69 percent by the end of September to 2.66 billion ($707 million) compared to the same time a year earlier.

Brazil’s woes deepened on Wednesday as Moody’s Investors Service downgraded all ratings for embattled oil group Petrobras, and the country faced the threat of losing its investment grade credit rating from the agency, the Financial Times reported. Moody’s downgraded all ratings for Petrobras to Ba3 from Ba2, and placed them on review for possible further downgrade. “These rating actions reflect Petrobras’ elevated refinancing risks in the face of deteriorating industry conditions that make it more difficult to raise cash through asset sales,” the agency said.

Spanish conglomerate Abengoa, teetering on the verge of bankruptcy, has halted construction of power transmission lines in Brazil, a potential setback for the South America nation's bid to emerge from its worst energy crisis in 14 years, Reuters reported. Unions representing construction workers, a wind power industry group and Abengoa's sub-contractor on the new power lines said the Spanish company informed them of the interruption in recent days.

Some of Grupo BTG Pactual SA’s fixed-income funds have lost about half of their net assets in the week that followed the arrest of the firm’s billionaire founder, Andre Esteves. Clients pulled a net 6.7 billion reais ($1.8 billion) in the week after Esteves was jailed as part of a corruption probe in Brazil, according to the latest available data compiled by Bloomberg. That represents more than half of the combined net assets of the 10 fixed-income funds listed on the bank’s website, which totaled 12.7 billion reais the day before the arrest.

Brazil’s recession deepened in the third quarter into what economists say is the country’s worst crisis since the Great Depression, as political gridlock and a giant corruption scandal have halted investment and forced consumers to pare spending to the bone, The Wall Street Journal reported. Gross domestic product shrank 4.5% in the third quarter from a year earlier, the biggest contraction since Brazil started measuring GDP by the current system in 1996, Brazil’s statistics agency said Tuesday.

A spiraling economic crisis has pushed Brazil’s emerging middle class to the brink, The Wall Street Journal reported. Urban unemployment rose to 7.6% in September, tied with August for the highest rate in more than five years. Inflation approaching 10% has forced the poor to stop buying meat and the central bank to ratchet up interest rates. A disorganized effort by the government to stem a widening budget deficit has resulted in painful tax increases, further crimping family budgets.

In Brazil, many captains of finance are unwilling to risk upsetting the government by expressing their concerns publicly about the country’s economic crisis. Don’t put Jose Olympio Pereira in that group. Just seconds into an interview in Sao Paulo last week, the CEO of Credit Suisse Group AG’s Brazil unit made his views crystal clear when, in response to a question about the state of affairs in the country, he replied: "we are very bad." And when he says "very bad," he means it.

Brazilian President Dilma Rousseff, who is struggling to get the country’s Congress to pass legislation meant to curb a widening budget gap, faces more resistance from members of her own party than almost any other grouping, according to a recent survey of lawmakers, The Wall Street Journal reported. Ms. Rousseff’s left-wing Workers’ Party is reluctant to embrace spending cuts and tax increases and favors stimulus policies instead, according to the poll of members of the lower house of Brazil’s Congress by political consultancy firm Mosaico.

Embattled Brazilian President Dilma Rousseff has long been criticized by business interests for her economic policy as growth sputtered, budget deficits ballooned and inflation and interest rates soared. But now she facing increasingly strident calls for the ouster of her finance minister from an unusual source: her own left-wing party, The Wall Street Journal reported.

In the smog-filled, run-down industrial hubs that ring the southern end of Sao Paulo, Brazil’s next big crisis is taking root, Bloomberg News reported. The labor market, long the country’s lone economic bright spot as growth stagnated, is suddenly deteriorating rapidly, driving unemployment all the way up to 7.6 percent from a record-low 4.3 percent at the end of 2014. Nowhere are the layoffs that are fueling that surge more acute than here, in this gritty complex of steel, auto and auto-parts factories built decades ago by the likes of Ford Motor Co. and Volkswagen AG.