North America

The Mexico City Airport Trust – the financial backer of a new Mexico City airport project that President Andrés Manuel López Obrador has vowed to scrap– has boosted the terms of its bond buy-back offer to try to woo the approximately 50 per cent of bondholders who rejected the initial deal, the Financial Times reported. The new deal offers to buy back $1.8bn of the $6bn in bonds as before.

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Venezuela is facing the possible unraveling of a pair of billion-dollar settlements aimed at protecting the cash-strapped country’s U.S.-based Citgo Petroleum Corp from seizure by creditors. A lawyer for Canadian mining company Crystallex International Corp said on Tuesday Venezuela had breached the $1.4 billion November agreement that resolved a long-running fight over an expropriated gold mine. Separately, Venezuela’s $1.3 billion settlement in October with Rusoro Mining of Vancouver, also over expropriated mining assets, has been upended by U.S.

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Insolvencies filed by Canadian consumers jumped by the most in two years amid signs recent interest rate increases are filtering through to the economy, Bloomberg News reported. Insolvencies climbed to 11,641 in October, an increase of 9.2 percent from a year earlier, according to a report from the Office of the Superintendent of Bankruptcy Canada. Insolvencies surged 16 percent from September, and are 1.5 percent higher than 2017 on a year-to-date basis.

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Investors in Mexico City’s planned airport project want a lot more from the government before they agree to its buyback offer, Bloomberg News reported. An explicit federal guarantee to honor the debt would go a long way toward resolving concerns, according to chats with more than half a dozen bondholders who asked not to be identified before any formal talks are held.

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Canada kept interest rates on hold on Wednesday, as a recent spate of disappointing economic readings and the renewed sell-off in crude prompted policymakers to take a more cautious stance, the Financial Times reported. The Bank of Canada held its benchmark rate steady at a 10-year high of 1.75 per cent, as widely expected. However the Canadian dollar slumped to trade 1 per cent lower at C$1.3397 per dollar — the lowest since June 2017 — as policymakers warned that the economy could be heading for a slowdown in the fourth quarter.

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Holders of more than $1bn of the bonds issued to finance a new Mexico City airport that President Andrés Manuel López Obrador wants to scrap have rejected an offer by the government to buy back some of the debt, the Financial Times reported. The bondholder group said it could not support the plan, which would also alter the terms of the remaining debt — bonds that currently have a claim on revenues from the new airport.

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On the eve of the inauguration of Andrés Manuel López Obrador as Mexico’s next president, his administration is looking to restructure $6bn worth of bonds backing the partly completed Mexico City airport whose future was put in doubt in October, the Financial Times reported. “We will begin negotiations to seek a fair treatment with investors and to respect their rights as bondholders,” said an aide to Arturo Herrera, incoming deputy finance minister. A plan could be announced as soon as Monday, according to people familiar with the matter.

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Cash-strapped Venezuela settled a $1.2 billion arbitration claim that will prevent a creditor from stripping away its crown jewel foreign asset, the U.S.-based Citgo Petroleum Corp refining business, according to Canadian court documents, Reuters reported. The deal with Crystallex International Corp suspends the Canadian mining company’s push for a court-ordered auction of control of Citgo as a way of collecting on an arbitration award against Venezuela that has grown to more than $1.4 billion with interest. Citgo is based in Houston, Texas.

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