North America

Brazilian airline Gol said on Wednesday it has signed a deal with shareholder Abra to reinforce its current restructuring plan and raise credit to exit bankruptcy, including the conversion of $950 million in Abra's secured debt into Gol shares, Reuters reported. Abra is the main investor in airlines Gol and Avianca. The agreement is related to Gol's chapter 11 request, filed in January. According to the filing, Gol will present a restructuring plan that will allow a significant reduction of its leverage.

A threat by Donald Trump, who has been elected as the next U.S. president, to impose 60% tariffs on U.S. imports of Chinese goods poses major growth risks for the world's second-largest economy, Reuters reported. Not only are the tariff rates much higher than the 7.5%-25% levied on China during his first term, the economy is also in a much more vulnerable position. In 2018, the property market was strong, driving about a quarter of China's economic activity. That meant local government finances, heavily reliant on auctioning land for residential projects, were not questioned so forcefully.

China's push to shift its food import sources since 2018 has put it in a better position to impose tit-for-tat tariffs on U.S. farm goods with less harm to its food security if trade friction with Washington flares after the U.S. presidential election, Reuters reported. The threat of a trade war looms for China, the world's top importer of farm products such as soybeans and corn, with Republican candidate Donald Trump floating blanket 60% tariffs on Chinese goods in a bid to boost U.S. manufacturing. His opponent Kamala Harris, a Democrat, is also expected to confront China on trade.

Esprit Holdings Limited announced the bankruptcy of its two U.S. subsidiaries, adding to insolvency filings in Europe and Asia as the brand struggles to stay afloat, RetailDive.com reported. Both Esprit U.S. Distributions Limited and Esprit U.S.Retail Inc. filed notices of chapter 7 bankruptcy on Monday, according to a company announcement. Esprit U.S. Distributions, an indirect wholly-owned subsidiary of Esprit Holdings, and Esprit U.S. Retail, a direct wholly-owned subsidiary of Esprit U.S.

Mexico’s economic growth accelerated more than expected in the third quarter on solid domestic demand and a recovery of the agriculture sector, marking a pace that’s unlikely to be sustained going forward, Bloomberg News reported. Gross domestic product expanded 1% in the three months through September, above the 0.65% median estimate of economists surveyed by Bloomberg. From a year ago, GDP grew 1.5% in the quarter, more than the 1.3% median estimate, but less than the 2.1% the previous period, according to preliminary data published Wednesday by Mexico’s national statistics institute.

Grupo Aeromexico SAB sold $1.1 billion of bonds via international markets Monday that the air carrier will use to refinance debt due in the coming years, Bloomberg News reported. Aeromexico issued $500 million of five-year notes and $610 million of seven-year securities, according to data compiled by Bloomberg. Proceeds will be used in part to pay down $663 million in senior secured notes due in 2027, the company said in a statement. The 2029 notes priced to yield 8.25%, while the 2031 bonds yielded 8.625%, tighter than initial guidance. Barclays was the sole bookrunner for the deal.

Treasury Secretary Janet Yellen warned that the West Bank’s economy could collapse if Israel doesn’t preserve its banking relationship with Palestinian financial institutions in the territory it occupies, highlighting another potential source of instability as Israel also fights foes in Gaza, Lebanon and Iran, the Wall Street Journal reported. In a letter to Prime Minister Benjamin Netanyahu, Yellen and several of her global counterparts urged the Israeli leader’s government to approve a waiver that would continue to allow Palestinian and Israeli banks to correspond.

The Bank of Canada on Wednesday reduced its key benchmark rate by 50 basis points to 3.75%, its first bigger-than-usual move in more than four years, and hailed signs the country has returned to an era of low inflation, Reuters reported. The central bank, which hiked rates to a 20-year high to fight soaring prices, has now cut four times in a row since June. Inflation in September sank to 1.6%, below the 2% target. "Canadians can breathe a sigh of relief. It's a good news story," Governor Tiff Macklem said during a press conference after the rate announcement.