South America

Argentina will make a partial payment to the group of wealthy government creditors known as the Paris Club of an outstanding debt of $2.4 billion, Bloomberg News reported. The club will spare Argentina from default in the understanding that the country can rework a $45 billion credit with the International Monetary Fund. The South American nation has used a 60-day grace period to try to reach an agreement with the group after failing to make the payment by May 31. Argentina’s global bonds due in 2030 pared an intra-day decline to trade at 37.23 cents on the dollar on the news.

The International Monetary Fund privately estimates that a deal allowing Argentina to reschedule payments on $45 billion owed to the lender will be pushed into 2022 as President Alberto Fernandez has little incentive to quickly agree on the basis of a new program, Bloomberg News reported.

President Joe Biden’s administration rejected Nicolas Maduro’s call for relief from U.S. sanctions, saying the Venezuelan leader needs to do more toward restoring democracy before penalties would be lifted, Bloomberg News reported. Maduro, a target of crippling U.S. sanctions under former President Donald Trump, reached out to Biden in an exclusive Bloomberg interview last week, calling on him to lift sanctions, normalize relations and end the “demonization of Venezuela.” Responding to Maduro’s comments, a State Department spokesman said a U.S.

Bankrupt miner Samarco Mineracao SA plans to receive a 1.2 billion reais ($238 million) debtor-in-possession loan extended by its controlling shareholders, Vale SA and BHP Group Ltd, to maintain its activity, according to court documents reviewed by Reuters. But a group representing 80% of Samarco’s debt excluding Vale and BHP oppose the move, saying the DIP financing goal would be to protect Vale and BHP assets. Among these creditors are York Global Finance, Ashmor, Solus and City National.

Samarco Mineracao SA, a bankrupt joint venture between Brazilian miner Vale SA and BHP Group Ltd, proposed on Thursday a plan to restructure 50 billion reais ($10 billion) in debt with an offer of preferred shares or a cash payout in 2041 equal to 15% of the current value of holdings, Reuters reported. Samarco filed for bankruptcy protection in April to prevent creditors' claims from affecting operations that restarted at the end of 2020, more than five years after a tailings dam collapsed causing one of Brazil's worst environmental accidents.

LATAM Airlines Group, the region’s largest carrier, said on Wednesday that it had sought to extend until September the deadline to present its restructuring plan as part of the bankruptcy protection process initiated in 2020, Reuters reported. LATAM filed for bankruptcy protection in the U.S. in May of last year, hammered by the world travel crisis generated by the coronavirus pandemic. At the time, it was the world’s largest airline to take such action due to COVID-19.

Brazilian metropolitan rail company Supervia filed for bankruptcy protection on Monday, the company said, as traffic was sharply hit by the COVID-19 pandemic, Reuters reported. The company, controlled by a Japanese group that includes a subsidiary of Mitsui & Co 8031.T and West Japan Railway Co 9021.T, will restructure 1.2 billion reais ($237.4 million) in debt. Before the pandemic, Supervia, which operates in Rio de Janeiro metropolitan area, had around 600,000 passengers a day but now the number has dropped to 300,000.

Peru’s currency and stocks tumbled after incomplete results of Sunday’s presidential runoff showed the leftist candidate gaining momentum even as he trailed by a thin margin in the count, Bloomberg News reported. The sol headed to its biggest drop in more than a decade at one point and the S&P/BVL Peru General Index fell as much as 6.8%, the most since November, with mining companies and financial firms among the hardest hit. Overseas bonds edged lower in light trading while the cost to insure against a default climbed.

Latam Airlines Group SA Chief Executive Roberto Alvo, seeking to stave off an overture from rival Azul SA, said the bankrupt air carrier’s Brazilian operations aren’t for sale, Bloomberg News reported. Santiago-based Latam, which has now been in U.S. bankruptcy for more than a year, has its sights set on a strong chapter 11 exit -- not a piecemeal sale of the business, Alvo said in an interview Wednesday. The carrier’s shares briefly slumped last week after it denied reports that Azul SA planned to buy Latam’s Brazilian subsidiary.