Argentina published a new debt offer that shortens its payment moratorium to two years and delays principal payments for half a decade. Under the revised proposal, the South American nation wouldn’t pay coupons until 2022, Bloomberg News reported. Its initial offer called for a three-year delay. Principal repayments would begin in May 2025, according to a statement from the Economy Ministry. President Alberto Fernandez’s administration entered talks with its largest creditors on Saturday after formally defaulting for the ninth time in the nation’s history.
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LATAM Airlines Group’s U.S. bankruptcy filing this week will delay its potential bailout in Brazil to at least July and also push back aid to its rivals at least through the end of June, two sources said on Thursday, Reuters reported. The delays will add further strain to Brazil’s airlines, which were already in weak shape before the pandemic. Rivals Azul SA and Gol Linhas Aereas Inteligentes SA are also negotiating bailouts. “The bailout will happen; what could happen is that it may be staggered due to LATAM’s situation,” said one source.
Argentina’s former nemesis Paul Singer is standing judgment over the nation’s bond market once more, Bloomberg News reported. Four years after cutting a deal with the hedge fund billionaire to end a lengthy legal dispute over its defaulted debt, the South American country can’t pay its debts again and Singer is back for a brief encore. His investment firm Elliott Management Corp. is one of 14 companies that will decide whether credit-default swaps were triggered by last week’s failure to meet a payment deadline.
Argentina’s ninth default on its external debt is now official after some of its bonds were cut to default status by two rating companies, Bloomberg News reported. Fitch Ratings reduced the South American nation to restricted default Tuesday, while S&P Global downgraded four of its dollar-denominated bonds to default from CC following a missed $500 million payment last week.
LATAM Airlines Group, the continent’s largest carrier, filed for U.S. bankruptcy protection on Tuesday, becoming the world’s largest carrier so far to seek an emergency reorganization due to the coronavirus pandemic, Reuters reported. The filing highlights the financial weakness of Latin America’s carriers, following a similar bankruptcy earlier this month by the region’s No. 2 airline, Avianca Holdings. But unlike Avianca, which experienced management turmoil and losses, Chile’s LATAM posted profits for the last four consecutive years totaling more than $700 million.
Chile’s Latam Airlines Group SA has hired U.S. investment boutique PJT Partners to explore debt restructuring options that may include bankruptcy protection filings in three countries, Brazilian newspaper O Estado de S. Paulo reported late on Monday, Reuters reported. According to the paper, which cites sources with knowledge of the matter, Latam is considering filing for Chapter 11 in the U.S. and equivalent bankruptcy protection in Chile and Brazil, where are the company’s largest operations.
Argentina missed a bond payment on Friday and inched closer to another crushing default, which would plunge it into a new period of economic isolation and deepen a recession that has been exacerbated by the coronavirus pandemic. The missed deadline means Argentina has technically entered default for the ninth time in its history, the International New York Times reported. But the government signaled that it was making progress toward a deal with creditors to restructure $66 billion in foreign debt and announced that negotiations would continue until June 2.
Creditors of Odebrecht’s ethanol unit Atvos have approved a restructuring plan, the Brazilian firm said in a statement late on Wednesday, Reuters reported. Under the plan, Atvos expects to reduce its net debt to three times its earnings before interest, tax, depreciation and amortization, a gauge of operational profit known as EBITDA, from the current six times, as it will transfer 46% of its debt to a new vehicle. It will start paying small suppliers in 90 days. Remaining creditors will start receiving partial payments in 2022.
Even if Argentina defaults for the ninth time in its history, creditors say the issue could be cured quickly as the two sides work to restructure $65 billion in overseas bonds, Bloomberg News reported. Although an event of default will be hard to avoid for Argentina, there is willingness to resolve the negotiations, said Greylock Capital Management LLC’s Chief Executive Officer Hans Humes at an online event.