Brazil's government said on Friday it has reached deals with two of the country's largest airlines, Gol and Azul, to settle some pending tax obligations totaling 7.5 billion reais ($1.22 billion), Reuters reported. The government has provided the carriers with significant discounts and allowed them to make installment payments. The deal may provide financial relief to the companies. Latin American airlines have been facing financial hurdles in the wake of the COVID-19 pandemic and were forced to restructure obligations as they struggle with high debt loads.
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South America
Argentina's state airline, Aerolineas Argentinas, is slimming down for a potential sale, shedding 13% of its staff, cutting money-losing domestic routes and even removing snacks formerly available to passengers, according to sources and documents seen by Reuters. The cutbacks, many of whose details were previously unreported, are part of a backdoor attempt to trim the airline's burden on the state and lure private investment. The drive is progressing, even though libertarian President Javier Milei's plans to privatize the firm have generated pushback.
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Argentina unveiled a $1 billion repurchase agreement with five international lenders that will help replenish foreign reserves at its central bank, a key victory for President Javier Milei as he works to stabilize South America’s second-largest economy, Bloomberg News reported. The deal, commonly known as a repo, will be in place for two years and four months, the monetary authority said Friday in a statement, without naming the banks. Citigroup Inc. participated in the repo, according to two people with direct knowledge of the matter.
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Lawsuits by three firms seeking to improve their chances of obtaining proceeds in an auction of shares in Citgo Petroleum's parent can go ahead, a U.S. judge ruled in an order issued on Monday, Reuters reported. The decision could reduce the proceeds of any sale, the court officer overseeing the auction in federal court in Delaware had said in a motion seeking to block the parallel lawsuits. Shares in Citgo parent PDV Holding are being auctioned to repay $21 billion in claims for debt defaults and expropriations by Venezuela and state oil firm PDVSA. PDV is a U.S.
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Brazilian assets finished the year lagging all major peers, with the real posting its biggest slump since the pandemic shock of 2020 amid mounting skepticism over President Luiz Inacio Lula da Silva’s commitment to fix a ballooning budget deficit, Bloomberg News reported. The real weakened 21% against the US dollar this year, the worst among 31 major currencies alongside Argentina’s tightly controlled peso. Losses accelerated in November after a long-awaited fiscal package underwhelmed investors.
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The International Monetary Fund’s executive board is set to review Argentina’s current $44 billion aid program next month, according to people familiar with the matter, a crucial step as President Javier Milei negotiates for a new loan, Bloomberg News reported. The board is tentatively set to meet in early January to evaluate a staff report on the agreement Argentina struck with the IMF in 2022, said the people, who spoke on the condition of anonymity as the details haven’t been made public.
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After months of rancor, ties between President Luiz Inacio Lula da Silva and Brazil's central bank look poised for an era of sweetness and light - which is precisely what worries some investors, Reuters reported. Gabriel Galipolo, 42, is set to take the reins at the bank on Wednesday. The former deputy finance minister has earned a reputation for economic views that sometimes stray from his predecessor's embrace of free markets but warm the hearts of left-leaning politicians.
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Chile’s WOM won court approval to exit bankruptcy proceedings after it agreed to a takeover and restructuring bid from a group of creditors, eight months after filing for chapter 11, Bloomberg News reported. A U.S. bankruptcy judge rejected an objection to the takeover bid by a rival group of creditors, according to a statement from the company. The offer represented the only viable option for WOM to exit chapter 11 proceedings, the tribunal said.
Argentina’s economy expanded more than expected in October, continuing to show signs of recovery after surpassing growth forecasts in the third quarter too, Bloomberg News reported. Economic activity rose 0.6% from September, more than the 0.2% median estimate of economists surveyed by Bloomberg. From a year ago, activity fell 0.7%, according to government data published Friday. Wages in Argentina also grew 4.6% in October from September, surpassing monthly inflation for the seventh straight month after price increases wiped out paychecks earlier in the year.
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Colombia’s central bank unexpectedly slowed its monetary easing campaign as fiscal concerns are weakening the nation’s currency and adding to inflation risks, Bloomberg News reported. The seven-member board voted to lower the benchmark rate to 9.5%, Governor Leonardo Villar said after their meeting Friday. The move was forecast by only one of 30 analysts surveyed by Bloomberg. All the others predicted a cut to 9.25%. The decision was split, with five board members backing the cut of 25 basis points, one voting for 50 basis points and another for 75 basis points.
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