North America

Canada is still one of the only developed countries that U.S. politicians can look to for guidance on how to go fully legal. Official data shows that four years after opening up on Oct. 17, 2018, one-third of Canada’s cannabis sales still happen in the black market, the Wall Street Journal reported. That’s hardly ideal, but the situation is improving as legal sellers do a better job at attracting customers. In Ontario, cannabis costs just 2% more than what is available in the illegal market, according to an EY report. Investors have been razed, though.

Business sentiment has softened in Canada and most firms now think a recession is likely, a Bank of Canada survey showed on Monday, but inflation expectations remain high, leaving the central bank little choice but to continue raising rates, Reuters reported. The bank's Business Outlook Survey showed 77% of firms see price growth staying above 3% for the next two years. A separate survey showed near-term consumer inflation expectations at record highs, though longer term expectations have eased, providing some relief.

Mexico's biggest non-bank lenders may need to become licensed banks, analysts said, as they maneuver through growing market turmoil to avoid the fate of three big peers who defaulted in the past year, Reuters reported. "Any fintech with serious, long-term ambitions will likely have to find a way to become a bank," says Mike Packer, an investor at QED, a venture capital fund which has backed several lending fintechs. During the pandemic, the non-bank institutions grew to represent 20% of Mexico's private credit market.

LATAM Airlines, the biggest carrier in Latin America, said it plans to conclude its exit from bankruptcy on Nov. 3, Reuters reported. "This process will allow the group to emerge more agile, with a more competitive cost structure, adequate liquidity to face the future, with approximately $10.3 billion in equity, and close to $6.9 billion in debt," the company said in a statement late on Friday. LATAM filed for chapter 11 in 2020 after airline travel was hammered during the pandemic, and it won court approval that June.

A federal appeals court deferred ruling on whether U.S. bondholders have valid claims over Venezuela’s prized oil refiner Citgo Petroleum Corp., instead asking New York state’s highest court to decide on the disputed $1.7 billion debt, WSJ Pro Bankruptcy reported. The Second Circuit Court of Appeals in New York asked for guidance on whether bondholders are entitled to seize the controlling stake in Citgo they hold as collateral after Venezuela’s opposition movement stopped making payments on bonds secured by the Houston-based refiner.

LATAM Airlines detailed a financing plan on Wednesday that the company hopes will finalize its exit from bankruptcy in the first week of November, Reuters reported. The company filed for chapter 11 in 2020 after airline travel plummeted during the pandemic and won court approval that June. The reorganization plan would inject about $8 billion into the airline through a combination of capital increase, issue of convertible bonds and new debt.

An auction schedule to sell shares in Citgo Petroleum's parent company, which could force a breakup of the Venezuela-owned U.S. oil refiner, was approved by a U.S. federal judge and filed on Tuesday, Reuters reported. U.S. District Judge Leonard P. Stark's order sets bidding and sales procedures, hiring of investment banker Evercore Group and directs an approach to the U.S. Treasury Department to seek a decision on any share sale. The Treasury has protected Citgo from creditors by previously not allowing transactions.

Mexico is considering changes to its stock market law to entice family-controlled companies to go public in a bid to end a years-long drought in public listings and help attract more investors to Latin America’s second largest economy, Bloomberg News reported. The reforms being reviewed by regulators and government officials would both allow dual-class share listings and make it easier to block hostile takeovers, according to people with knowledge of the discussions and a draft proposal seen by Bloomberg News.

Venezuela’s creditors welcomed its potential rapprochement with the U.S. but still face risks and uncertainties in collecting from the South American country’s bankrupt government as its relations with Washington, D.C.'s thaw, WSJ Pro Bankruptcy reported. A rollback of U.S. sanctions on Venezuelan oil points a way to resolving the country’s huge foreign debt obligations, but offers no immediate fix for its longstanding default, according to sanctions experts and other people close to its top external creditors.

The Canadian government’s purchase of the Trans Mountain Corp. pipeline will end up sticking the country’s taxpayers with a large debt that won’t be repaid, an environmental law group warned, Bloomberg News reported. A 70% rise in the cost to expand the sole oil pipeline running from Alberta to the Pacific Coast increased the project’s debt to C$25.8 billion ($18.9 billion), West Coast Environmental Law said in a report written by economist Robyn Allan and released on Thursday.