Argentine executives and graduates shocked by President Mauricio Macri’s drubbing in elections this month have begun calling and emailing in droves in search of work in Brazil, Chile and Colombia, head hunters and visa advisers told Reuters. Executive search specialists say the resumes that have deluged their offices in those countries reached a peaked after Macri lost ground to a centre-left Peronist challenger in the Aug. 11 primary elections, causing the peso to plummet in value, Reuters reported. Leftist Alberto Fernandez is now the front-runner ahead of an Oct.
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The International Monetary Fund’s record loan to Argentina last year was supposed to turn the page on a troubled history, Bloomberg News reported. It’s looking more like a case of déjà vu. Less than two decades ago, Argentina crashed out of an IMF program, defaulted on debt and plunged into depression. As Fund officials arrived in Buenos Aires over the weekend to assess the country’s current $56 billion bailout –- and decide whether to keep doling out cash -- some of the same warning signals are flashing.
Brazilian conglomerate Odebrecht SA, which has been in bankruptcy protection since June, has proposed to creditors a swap of their debt for instruments similar to equity, according to a statement issued on Monday, Reuters reported. The instruments would give creditors the rights to receive proceeds of the asset sales and future profits of the companies controlled by the conglomerate. The plan, which the statement said Odebrecht filed with the court late on Monday, has no explicit discount on the 51 billion reais ($12.4 billion) debt that is being restructured.
Trading Argentine bonds has become a test of endurance as the prospect of a possible default triggers wild price swings and volume dries up, Bloomberg News reported. The Liquidity Assessment Scale of 1 to 100 (100 being the most liquid) slumped to 12 on Wednesday for the South American nation’s bonds from 68 just three weeks ago. “There is a lot of hysteria in the market and it is causing a lot of uncertainty on valuations,” said Jason Devito, a Pittsburg-based money manager at Federated Investment Mgmt Co., which has $502 billion under management.
A Brazilian judge on Wednesday ruled that Imcopa, one of the country’s largest processors of non-genetically modified soybeans, will no longer be able to enforce early termination of a lease agreement related to two soy crushing plants, Reuters reported. Imcopa has been going through a bankruptcy reorganization since 2014 and wants to sell the plants to pay back creditors. Last week, Imcopa terminated a 10-year lease on the two plants with brewer Cervejaria Petropolis SA, prompting the beer maker to seek legal remedies.
Less than two years after Argentina made a splash in markets by selling a $2.75 billion, 100-year bond, another debt restructuring is a real possibility after President Mauricio Macri was routed in a primary election, Bloomberg News reported. Money managers and analysts from firms including Citigroup Inc. and Bank of America Corp. say investors are likely to recoup less than 40 cents on the dollar on its notes if Argentina reneges on its debt for the third time in two decades.
The cost of insuring against an Argentine sovereign default climbed on Tuesday as Hernan Lacunza was sworn in as the new treasury minister of the crisis-hit country, Reuters reported. Argentine 5-year credit default swaps (CDS) were quoted by IHS Markit at 2,990 basis points (bps), up 77 bps from Monday’s closing level of 2,913 bps. Markit calculations, based on Monday’s closing prices, estimate a 82% probability of a sovereign default within the next five years.
Shares in Brazilian telecoms carrier Oi SA posted heavy losses on Tuesday, after media reports that its largest shareholder, GoldenTree Asset Management, is seeking to replace Oi’s Chief Executive Officer Eurico Teles, Reuters reported. Brazilian newspaper O Estado de S. Paulo reported earlier on Tuesday that GoldenTree, which holds a 14.5% stake in the company, sent a letter to the board saying Oi needs a CEO “that may execute the operational restructuring recently proposed,” the paper said, mentioning the letter was dated Aug. 16.
The slump in the Argentine peso last week made the country’s pile of debt much harder to repay, signaling a renegotiation may again be in the cards for the South American nation, Bloomberg News reported. As of March 31, Argentina had $33.7 billion in foreign-currency debt payments due by year-end, the majority in short-term Treasury bills, or Letes, according to the latest debt report by the Finance Ministry. Most of that still needs to be repaid.