South America

The International Chamber of Commerce, a global trade union and civil society groups urged the Group of 20 major economies to extend and expand a freeze in debt service payments to help not just the poorest, but also middle-income countries, weather the coronavirus pandemic and its economic fallout, the International New York Times reported on a Reuters story. The ICC, International Trade Union Confederation, and Global Citizen, a group pushing to end extreme poverty by 2030, also called on G20 finance ministers, who will meet online on July 18, to take additional steps to boost th

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LATAM Airlines, the largest airline group in Latin America, said today that it had secured an additional $1.3 billion for its financing proposal before a New York bankruptcy court, while adding its unit in Brazil to the debt restructuring process, Reuters reported. LATAM filed for U.S. bankruptcy protection in May, aiming to reorder $18 billion in debt. It was the world’s largest airline to date to seek an emergency reorganization due to the coronavirus pandemic. Today it said it had secured an additional $1.3 billion in funding from Oaktree Capital Management L.P.

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Argentina’s bondholders shouldn’t expect any more improvements or changes to the country’s debt restructuring proposal, Economy Minister Martin Guzman said, according to a Bloomberg News report. The government sees no room for further modifications on an amended offer released Sunday night, part of Argentina’s bid to restructure $65 billion of debt. The proposal gives bondholders about $13 billion more than its initial plan announced in April. “Clearly not,” Guzman said Wednesday, responding to a question about modifying the deal in any way.

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Ecuador reached a preliminary agreement with some of its largest bondholders to restructure $17.4 billion in outstanding debt, Bloomberg News reported. The nation intends to exchange 10 existing bonds maturing between 2022 and 2030 for three new notes due in 2030, 2035, and 2040, reducing the average coupon rate to 5.3 percent, according to a government statement. The plan still needs to be approved by a share of the remaining bondholders.

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Banks are asking a New York judge to subpoena more documents from bankrupt soy-export giant Vicentin SAIC, saying they may have been the victims of “major international financial impropriety,” Bloomberg News reported. Lenders including Rabobank, Credit Agricole, ING and the International Finance Corp., the private-lending arm of the World Bank, want copies of wire transfers by Argentina’s Vicentin and several related companies that include a meatpacker and a vineyard.

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The World Bank projects the recession in Latin America and the Caribbean will be the worst downturn since reliable data began in 1901, setting back progress on fighting inequality and poverty, Bloomberg News reported. The development institution expects a gross domestic product contraction of more than 7% for 2020, making it worse than any crisis of the past century, including the Great Depression, the 1980s debt crisis and the global financial of 2008-2009, President David Malpass said.

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Ratings agency S&P Global on Wednesday slashed seven Argentine foreign-currency bonds to default, triggered by non-payment of interest, as the government remains entangled in debt negotiations with its foreign creditors, Reuters reported. S&P said it downgraded to “D” from “CC” three foreign-law foreign-currency bonds that had about $582 million in interest due at the end of June. It also downgraded four Argentine-law, U.S. dollar-denominated bonds with $837 million interest due at the end of June.

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Two major Argentine creditor groups said on Tuesday that there had been “no meaningful engagement” with the country’s government since mid-June, flagging concerns about a deal after talks to restructure $65 billion in debts stalled this month, Reuters reported. Argentina, which defaulted on foreign bond payments in May, is racing to restructure its debts, which have become unsustainable after two straight years of recession, to avoid a messy and protracted legal standoff with creditors.

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Argentina’s economic activity plunged 26.4% in April, the country’s official statistics agency said on Monday, the worst monthly fall on record as the country reeled from the impact of the novel coronavirus pandemic and a nationwide lockdown, Reuters reported. The April drop, after the South American grains producer imposed the lockdown in mid-March, was worse than the 21% decline predicted by analysts polled by Reuters, underscoring how badly the pandemic has battered local industry.

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Bankrupt LATAM Airlines and Avianca Holdings are dramatically retrenching their once grand ambitions amid the COVID-19 pandemic, reducing competition in Latin America as they mull once-unthinkable cooperation with rivals, Reuters reported. Since May, LATAM has exited Argentina, partnered with rival Azul SA in Brazil and cut back domestic operations in Chile, while Avianca has departed Peru. LATAM is now open to a deeper alliance with Azul, even as the two airlines usually control a combined 60% of Brazil’s domestic market.

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