South America

S&P Global Ratings raised its debt grade for Argentina on Tuesday, acknowledging the agency made a mistake when it changed the rating in late December for the crisis hit country, The Business Times reported. S&P bumped the rating on foreign long-term debt to 'CCC-' from 'CC,' taking it up two notches from 'SD' and back to where it was prior to December 20 when the country was declared in default. After bumping the rating up a notch on December 30, 2019, "we identified that we had misapplied our criteria," S&P said in a statement.

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Samarco Mineracao SA has rejected creditors’ formal request to resume talks to restructure its defaulted debt, signaling heightened risks for bond holders, according to people with direct knowledge of the situation, Bloomberg News reported. The Brazilian iron ore venture between BHP Group and Vale SA said it has yet to firm up its business plan. And without that, the company argues that it will be at a disadvantage if it were to resume talks that have been put on hold for almost a year on its $2.9 billion in defaulted debt, the people said.

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Sovereign debt’s bad boy is back. Argentina, the eight-time defaulter, is on the hook for around $100 billion of hard currency debt held in private hands, just part of its hefty borrowings, Reuters reported in a commentary. The International Monetary Fund may complicate new President Alberto Fernandez’s plans for a quick debt fix, with wonky new bond features making the outcome even chancier than usual. The dwindling liquid cash reported by the country’s treasury won’t even cover next year’s roughly $10 billion in private-lender interest, let alone principal.

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Argentina’s new government announced the issuance of $1.326 billion of dollar-denominated Treasury Bills, to be directly subscribed by the central bank, according to a decree in the official Gazette on Thursday. The issuance of the 10-year debt comes as the country’s new Peronist President Alberto Fernandez looks to pay off creditors and stave off a damaging default, Reuters reported.

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Argentina’s new President Alberto Fernandez said on Thursday that a social pact with businesses and trade unions sent a “strong message” to creditors including the IMF that the economy must be allowed to grow before the country can pay its debts, Reuters reported. The broad agreement struck last week, a core plank of the new Peronist administration’s plans to revive the economy and rein in inflation, gives Fernandez extra muscle in looming restructuring talks over around $100 billion in debt.

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Most countries have a historic villain. For Cuba, it is Uncle Sam. For some in the Middle East, it is Israel. Here in Argentina, many direct their rage at the International Monetary Fund, The Wall Street Journal reported in a commentary. Hating on the multilateral lender, which steps in to bail out indebted governments, is something close to a national sport in this country of 44 million.

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Brazilian telecoms company Oi SA said on Monday its mobile unit has signed an agreement to issue up to 2.5 billion reais ($609.40 million) in debenture bonds with a 24-month term to meet its cash needs, Reuters reported. The move comes as Brazil’s largest fixed-line carrier struggles to turn around its business since filing for bankruptcy protection in June 2016 and to restructure approximately 65 billion reais ($15.7 billion) of debt.

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Argentina appointed a government team to kick off talks with creditors to renegotiate about $100 billion in sovereign debt as the new center-left administration of President Alberto Fernandez postponed payments on some of its short-term debt, Reuters reported. The “external debt sustainability management unit” was created in the context of the government’s sweeping economic bill, expected to be passed by the Senate later on Friday, according to a statement by the Secretariat of Finance.

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Argentina’s credit rating was downgraded to near-default status by two of the biggest global ratings companies after the government said it would delay payments on its short term dollar-denominated local debt, Bloomberg News reported. Fitch Ratings cut Argentina’s long-term issuer rating two notches to “restricted default” from CC, the company said in a statement, after President Alberto Fernandez’s government announced by decree it would extend payments on $9.1 billion in dollar-denominated Treasury bills until Aug. 31 of next year.

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Argentina has delayed payment on roughly $9bn in dollar-denominated debt for the second time in five months, pushing off payment until August 31 while calling on bondholders to show “good faith” in talks to restructure the country’s massive debt pile, the Financial Times reported. The government was due to repay $67m on Friday and an additional $280m on Monday for the local notes, known as Letes, according to local newspaper Clarin. These short-term bonds are sold by the country’s Treasury to individuals and companies.

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